Debt is sometimes necessary to get ahead in life and build wealth, but poorly managed can lead to severe financial difficulties!
Let's face it, even when the economy is booming most of us cannot afford to buy a new home, or pay for our dream car or holiday in cash and often a loan or credit card is the only way to fund what we desire!
With most business impacted by the pandemic, resulting in thousands of job losses and many having to shut, it is no surprise to read in the papers that borrowing five times more in 2020.
In most cases, the monies borrowed is not used to buy assets but merely to try and keep business operations and the economy going!
Normally, I advise my clients and friends to only leverage debt to invest in income-generating assets and not to use debt to buy depreciating assets, However, in these unpreceded times, it is no surprise and understandable that many are borrowing monies to try and survive.
However, paying back the debt and managing one credit rating is always the area of challenge, especially after all the money is spent!
In Episode 7 of my podcast, I deep dive into how debt can be used to build wealth, but sometimes the best choice may be avoiding debt altogether!
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