Why do people get into debts?
Remember, I once said that, “making money is a choice while spending money to survive is inevitable. But how do you spend what you have not made?”.
People get into debts when their expenses exceed their income. If you’re spending more than you make, then it is obvious that you’re either borrowing to spend or buying on credit.
Debt is the modern form of economic slavery, a joy killer, a source of depression, fear, hatred, marital problems and social discord. It is something you should avoid at all cost.
Not all debts are bad, though. There are Good debts and Bad debts.
A Good Debt is one that you borrow create or service an income generating Asset. Such assets could be your Business or any venture that puts money in your account.
A Bad Debt, on the other hand, is one that you borrow to meet your expenses or service your liabilities. This includes cars, food, clothing, school fees, mortgage, school fees, shopping and entertainment.
While the former debt is used to create wealth, the later debt sucks you dry in the long run….unless it is being paid for by your assets.
The question now is “do you have assets”?
See also: Money has got Rules