It is not bad to borrow money if you can pay. Borrowing with a well-studied plan and a payment timetable ensures that you will have a good debt. It makes money that does not belong to you work for you. Borrowing assumes that you have completely understood all the responsibilities involved and you have analyzed your competence to pay.
Believe it or not that most income earners rush to buy homes just because they have enough money for the down payment. This general behavior appears to apply to almost all cases where people buy hard assets such as a house and lot, a car or just about any appliance they want to own. They forget the need to consider the cost of borrowing and of ownership.
I know a house is a home. All of us dream of owning a house. It is not to be taken strictly as a financial investment decision. Buying a house for you to live in is a long-term commitment. And for places where access to public transportation is difficult, it is also good to own a car. But very few can pay for it in cash. So to most, borrowing is necessary.
Buying and borrowing are two distinct decisions. You decide to buy if there is a need and it is time for you to do so. You decide to borrow if the terms are fair and economical. When you borrow, you must understand very clearly that you will be adhering yourself to a very certain and definite financial accountability which will require you to pay explicit amounts at specific dates in the future.
For that reason, it is important that you have an equally adequate, assured and ready source of funds to make these future payments. But buying when you are not yet financially ready will hurt your future financial condition. And you may believe that you have bought more liabilities. So it is important that when you borrow, understand the persuasive interest rate – the real cost of interest to you.
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My favorite Saying: “Dream big and don’t stop without giving it a chance to come true.” I am a father of 3 for 25 years +, OFW for 17 years , a Blogger, sometimes a Poet, Self-motivated and Professional by experience. You can call me Paul or Pruel. I am friendly animal but can kick you off when it is needed. LOL. I have no specific areas where my writing will focus on. I write any subject that interests me under the merciless sun.