How can we borrow wisely? Can debt create more wealth? Is debt good or bad? How can we really manage financial distress? Some of the webinar insights include:
Debt can be good or bad. A good debt is a debt taken for investment and should grow in value in long-term, the income earned should be able to repay the loan. A bad debt is loan taken for consumption purposes, they quickly lose their value and do not generate a long term income.
Causes of bad debt may result from; wrong financial planning, over ambition in financial matters, irregular income, multiple borrowing, unstable lifestyle and lack of financial literacy.
Recommended remedial actions that can be taken to manage bad debt include; saving, investing, purchase in cash, postponed gratification, debt consolidation, counselling and restructuring.
When acquiring debt one should assess their loan repayment ability, sustainability of the repayment plan, the tenure of the loan and available alternatives to fund raise.
Proper investment decisions should be taken into account by considering the risk, expected returns, liquidity of the investment, time horizon, objective of the investment, investment goals and different investment choices available.
The words of Robert Kiyosaki will best summarize the webinar, “It is not how much money you make but how much money you keep and how hard it works for you and how many generations you keep it for.”