Real talk about having loans or debts | Why do they do it

"Do you know a person who wants to have debts?" I bet you don't. But if I asked you again if "Do you know any person who has debts?" I am certain that it will be the other way around, that you know a lot. But why do they do it? Have you thought of this deep enough? Let's briefly share our thoughts regarding this topic here in this article.

real talk about debts or loans
real talk about loans


Years ago, when people ask me how to get a personal loan online or even offline, I usually give them "the face" expressing "Why are you even thinking of having one?" because it has a negative connotation for me. Let's face it, often, people do it not because they want to but because they think they need to. And most of the time, the guarantee of it being paid back is low so there are such short-term financial solutions out there like creditloan.com where loans are still possible to people even with bad credit.

But recently, I heard somewhere (from a friend or someone on television, can't remember exactly) that wealthy people actually have more debts than the average people do. So, I searched the internet and Googled to find out a little bit more about this and found a legitimate "perspective" or situation that can support the idea.

Generally, it is called leveraged investment. It is basically getting a loan with low interest and then investing it somewhere that gains higher yields.

For example, You loaned 15K with 8% interest per year in a bank but then invested it in stocks you studied well that will earn you 13% in the same year.. In this given case, you actually get to keep the 5% profit at the end of the year without even spending a single centavo. Well, this is just to give you the idea because in reality, people put the money on businesses, houses, or basically anything that appreciates its value over time.

Feel free to check Chinkee Tan's site for more financial tips and advice who happens to be a popular wealth coach/advisor here in PH.

why do people take loans
why do people take loans


One of the basic questions that popped up in my mind though was "If they were really rich, why would they prefer loaning the money than paying it directly?" Some of the answers were aside that they will not use any of their current assets (which can be used for other things), lesser taxable income can be achieved. Such things that are actually worth to be contemplated, huh? I find it very smart and efficient that I am assuming that this strategy came from the actual experience of someone who is very frugal (in a good way). It's maximizing every opportunity to the dime!

Well, I personally can't relate to having debts because we were raised to avoid such things. But in the way the trend is going, it seems impossible to avoid especially since we are going towards the digital age where credit cards are the first option aside from using mobile wallets like GCASH and some online banking like BDO. So just to give my unsolicited advice:

Do not do loans for

- impulsive wants or luxury 
- temporary relief/answer to a problem or difficulty
- highly-priced things that are hard to pay back even if you think its "do-able"


Possible acceptable situations 

- for business/investment purposes only
- last resort for any emergency needs


loans advantages and disadvantages
on what situation will you consider doing a loan?


Another thing that I also remembered that person said was that she knows she will not get "that" rich because she doesn't have the guts to loan and risk the money.. Do you guys agree with that mentality? Well, all businesses have risks so in the end, I think, it will all boil down to risk management.

I don't have any loans right now (Thank God) or even plan to apply for one but the only possible exemption would be if I found something worth investing.. when that finally happens, maybe, maybe.. How about you, in what situation would you consider doing that loan? Let me know in the comment section below.



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Real talk about having loans or debts | Why do they do it Real talk about having loans or debts | Why do they do it Reviewed by Michael on September 05, 2022 Rating: 5

12 comments:

  1. Same here! Im loan and debt free! People who has a business or wants to put up a business usually loan to invest or like what you’ve said buy things that appreciate in time. Thanks for sharing your thoughts about this topic. 👍🏻

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  2. Thank you for sharing!!!
    Actually I also heard din po Yung na banggit nyo na Ang mga mayayaman Ang mas malaki Ang utang and I agree na ginagamit po Nila ito para I invest sa mga business nila

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  3. Thanks for sharing this . Agree ako dito and ako po buti nlng walang loan and debt . Ang my plano kming business pero pinag iipunan ❤️

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  4. First thank you po for sharing this with us,I actually heard most of the time that "rich" people are usually have a high debt because of maybe business or other things.I enjoy reading you blog po,it's very informative.I think not all rich has or experiencing that because I think some of company are usually have their own financial adviser,siguro po sa first when you started a businesss.my opinion is as much as we can,do not loan especially if you're an average person,mas magaan sa pakiramdam ang wala po lasing iniisip 😅♥️

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  5. First thank you po for sharing this with us,I actually heard most of the time that "rich" people are usually have a high debt because of maybe business or other things.I enjoy reading you blog po,it's very informative.I think not all rich has or experiencing that because I think some of company are usually have their own financial adviser,siguro po sa first when you started a businesss.my opinion is as much as we can do not loan especially if you're an average person,mas magaan sa pakiramdam ang wala po lasing iniisip 😅♥️

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  6. Informative!!thank you for sharing this!!

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  7. Hai there Mr. Michael!
    Thank you so much for also making our time to be productive as we get to read from your blog and get bright and great informations, just as you want to spare your time to be productive by doing and making this blog.
    Anyway, I really agree with the idea of as much as possible, no to do any loans. There are a lot of ways possible to make and to have a capital for something that is worth risking to invest for. Let us not be afraid to start with little, do savings. Be a wise risk taker!💕
    Kuddos to you Mr. Michael! Well spent purpose!
    God bless!

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  8. Interesting and helpful information. I’ve found loans to be a slippery slope and try hard not to apply for them. I would only consider applying in a desperate situation.

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  9. Great post! I totally agree with you! I definitely advocate for staying out of debt, but do understand people take out loans to make money, which in that case, make sure you know what you are doing! I'm happy to say, my hubby and I are debt-free! Thanks for the tips!!

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  10. Thank you for sharing. I just got a business loan through a small business program I did and it really helped me to purchase what I needed to take my business to the next level. This was a great post.

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  11. It would be nice to say I am totally debt-free but I'm not. But I am mortgage free! Yeah! Yes, if at all costs, I would avoid getting a loan for ANYTHING... Cash is king, right! Right!

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  12. Happy to see most of you are debt free!

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