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step 1: save some money from a job or inheritance or other source that did not involve debt
step 2: invest that money in a business or the market or other investment opportunity with good growth potentials
step 3: reinvest all profits into the same or other opportunities
step 4: once the investment or income grows to a good number take some profits in a liquidation event to lock in your gains
step 5: use proceeds and repeat with other businesses/investments/opportunities
Choose your investments/businesses/opportunities wisely and you get exponential growth. Of course not everyone achieves this but the skilled and intelligent can.
I didn't ask you how to do it but rather I asked you how many people had become wealthy without ever utilizing debt
I didn't ask you how to do it but rather I asked you how many people had become wealthy without ever utilizing debt
I don't know the overall percentage, just that I've learned of many people who did so.
John Templeton was a good example.
He invested a couple thousand in all of the blue chip stocks during the depression when they were going for pennies. Cleaned up huge when the economy came back.
I don't know the overall percentage, just that I've learned of many people who did so.
John Templeton was a good example.
He invested a couple thousand in all of the blue chip stocks during the depression when they were going for pennies. Cleaned up huge when the economy came back.
How do you know John Templeton never used any debt?
Well it looks like debt was key to his success so much for that
Quote:
When war began in Europe in 1939, he borrowed money to buy 100 shares each in 104 companies selling at one dollar per share or less, including 34 companies that were in bankruptcy. Only four turned out to be worthless, and he turned large profits on the others.
Ok, so he did. All I'm saying is that debt is by no means a necessity to achieving wealth.
However, it IS for many people a substantial barrier to achieving it. Surely you do not dispute this.
Debt is a tool and can be useful or harmful depending on your application. I would wager the vast majority of wealthy folks have utilized debt at some point.
Debt is a tool and can be useful or harmful depending on your application. I would wager the vast majority of wealthy folks have utilized debt at some point.
Then would you not also agree that the vast majority of the general public uses debt in a harmful way and that one of the first steps to becoming wealthy (if they wish to be) is getting rid of that harmful debt? That is really what I was originally saying.
Then would you not also agree that the vast majority of the general public uses debt in a harmful way and that one of the first steps to becoming wealthy (if they wish to be) is getting rid of that harmful debt? That is really what I was originally saying.
Yes the majority of people do not manage debt correctly but the first step is not to get rid of debt but rather become educated on how to manage your finances properly and understand that debt can be a useful tool.
You guys (or gals) are really quite hilarious. Please, keep it going. It is vastly entertaining!
To get right to the bottom line, borrowing to invest is a terrible idea, UNLESS you can be very sure that the ROI will exceed the interest to be paid on the debt. IMO, the ROI should exceed the interest by at least 10% to make it worth while. Of course, 25% would be better.
Given an interest rate of 9% on the loan, that means your ROI will have to be anywhere from 9.9% to 11.25 or 12%. That enters the realm of Dreaming!
Yes the majority of people do not manage debt correctly but the first step is not to get rid of debt but rather become educated on how to manage your finances properly and understand that debt can be a useful tool.
You're still splitting hairs.
When they become educated about finance they will learn that one of the first practical steps they need to be taking is getting out of debt and not getting into more debt.
When they become educated about finance they will learn that one of the first practical steps they need to be taking is getting out of debt and not getting into more debt.
No I'm not splitting hairs and your following statement is still incorrect. educated people are not afraid of debt
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