Why Do They Let You Pay The Bank First?
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- Опубліковано 20 вер 2024
- Vusi Thembekwayo explains why the government wants you to get more debt.
In government policies and financial regulations, there exists a curious paradox-a prioritization that seems to defy logic and common sense. It’s the practice of allowing individuals to pay banks before they pay their taxes-a subtle yet significant decision that has its roots in the aftermath of the 1929 Wall Street crash.
In the wake of the Great Depression, governments around the world were faced with the daunting task of rebuilding shattered economies and restoring public confidence. Among the measures implemented was a subtle shift in priorities-a decision to prioritize debt repayment to banks over tax obligations. While seemingly innocuous at the time, this decision would have far-reaching implications for the future of finance and economics.
The origins of this practice can be traced back to a desire to stimulate economic growth and incentivize borrowing. By allowing individuals to prioritize debt repayment, governments hoped to spur investment, drive consumption, and fuel economic expansion.
It’s essential to understand the origins of this practice and its implications for our financial well-being and economic stability. By shedding light on the legacy of government priorities, we can begin to unravel the complexities of the debt dilemma and chart a course toward a more sustainable and equitable financial future.
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The problem with that is that debt is financially unsustainable. Once it reaches past a certain threshold it can become so burdensome that it's extremely vulnerable to collapse.
Go ask China, how unsustainable debt caused their housing industry to collapse, you cannot simply accrue debt ad infinitum. It's like building your foundation on top of sand.
And that collapse could have a chain reaction downstream, causing an economic meltdown.
The problems starts when people use debts for things that don’t make them money.
He explained that as simple as you can
😂😂😂😂 to don't want to discourage but the guru smells like a copypaste of richpoor dad book
🤔 Orrrr he is the original author 😂😂😂😂
I believe u, but I'm too stupid to understand economics
@@leadingbelly To be frank,
He only said that you can make yourself fall into too much debt, but at the same time use that money to build a business to outgrow your liabilities (debt loan) and you're a millionaire! 😄
The first step is always hard, though... 😴
Yes, but he's wrong. Now we are forever in debt. Gvt does as banks say as gvt went bankrupt first.
@@Sulayman.786 Well.... I don't know... Is he though? 😕
You can calculate your gains by making products and selling them, that could work out, right?
The worst thing is that, people that take debt use it to buy things they don't really need, or they could buy them later without the need to get in debt.
Yeah debt is seen as this totally bad thing because everyone when they were taught about debt were told a story of one person who ended up in a bunch of student loan car credit card dept etc and they were never told it can be a tool for faster wealth gain and tax cuts
@@AlphaAbyss_in as much as your statement may be correct, the issue is most people take loans/debts to purchase liabilities.
@@AlphaAbyss_For the vast MAJORITY it's TRUE though.
That vast majority doesn't have the self control with credit that would allow them to benefit from using this method.
It takes a self discipline and forethought that most will never achieve.
For most Its better for them to use something more akin to Dave Ramsey.
Yes and then they owe the USA money so you are then a modern day slave until you go bankrupt and you get wages garnished but his changes with bitcoin and getting paid in cash cashless society is the end
Most people have to take debt to get good schooling a home and some way to get to and from those locations. Most don't grow up with a silver spoon with all expenses payed till you tell mommy and daddy you got it from here.
USA is not a country, it is a company. People are the employees and commodity.
Corporation
In another word it's an industrial complex.
To bad the CEO and CFO suck
USA is a corporation, Congress is the board of directors. Citizens are tax slaves.
You could literally argue that for most capitalistic countries. Yet the most capitalistic countries are also the most successful countries.
He taught me that I don't have a good mind for finance.
Well he doesn’t seem to have one either because he completely neglected the risks of this approach
@@arianbehnami1050hope you understand that this is just a short clip from probably hours worth of a lesson right?? First watch the full video then see if he didn't touch the risk factor of all this
@@arianbehnami1050 concluded that off a clip? genius... I wish you watched the whole thing
@arianbehnami1050
Do you have more money and assets than him.
@@arianbehnami1050He is right on the money because without debt the economy would collapse. The entire financial system is built on debt.
The scariest reality is realising at age 50 you are literally watching history repeat itself and the people you are trying to enlighten was you 30 years ago.
How?
Bro you got wisdom if you understood that
And you didn't listen....lol
Yeah. I see it. Wish I could have warned me.
It does not really matter how much debt you have.... It's all about accounting and dispersion of debt through the use of trust organisations or PTY LTD etc.
The "business" owes the debt.... You continue to disperse debt until it becomes profitable... It does not even matter if you or the "business" goes broke provided the ABN is separate from the other business dealings... It's legal robbery and political representatives use this type of legal sidestep to not pay debt, tax debt directly.
In essence they pay the debt with other people's money but never pay interest.
I refuse to take part in that system. I payed £40000 for my law degree from my own money, then came back home, took charge of my father's agricultural lands. My father now has 20 times the land he had before, value has added to each piece of land, not a single piece of land is barren, more than a 100 families live off it. We own 30 trucks and many agricultural equipments all from the profits coming from these lands, bought in cash. I have never paid a penny of interest in my life. The commercial farmers that deal with the banks were ahead of me almost every step of the way, but after 15 years, now at 35, i can comfortably say I pulled it off just fine.
There's a reason God almighty has banned usury, it looks very appealing on a video like this, but we know who's getting richer and richer.
I love Islamist finance systems
Allahuma Barik
Surah Jumu’ah 63:4
ذَٰلِكَ فَضْلُ ٱللَّهِ يُؤْتِيهِ مَن يَشَآءُ ۚ وَٱللَّهُ ذُو ٱلْفَضْلِ ٱلْعَظِيمِ ٤
This is the favour of Allah. He grants it to whoever He wills. And Allah is the Lord of infinite bounty
In which country are you based ?
@@brijendrasahye Bangladesh
I love when people from other countries take the time to better understand than most Americans will
That makes sense. I guess it's all about balancing financial obligations and ensuring that people can still meet their basic needs while fulfilling their responsibilities to the government.
Yeah, as said It's also possible that allowing people to prioritize certain debts over others encourages responsible financial behavior. By incentivizing the repayment of loans, it could ultimately benefit both individuals and the economy as a whole.
That's an interesting perspective. I never thought about it that way. But it does make sense that the government would want to support initiatives that promote financial stability and responsible borrowing.
Speaking of responsible financial behavior, have any of you considered seeking advice from a financial advisory firm?
Folmar Advisory
I was able to pay off debts and my retirement portfolio has more than 2 million. Which is sitting there, waiting for me ro retire this year. I am proud to work with Folmar Advisory
So true! Wealth has no shortcuts, here are ways to acquire it..🔥
I had decisions that grew my finances (gathered over 1M in 2yrs) with heIp of my financiaI pIanner. Living the dream, hoping to retire next year.g
Elizabeth Greenhunts
get to her with the name
Many needs this lnfo. Good stuff
This only works in a low interest rate environment. Oh, and these "assets" are not your assets, they are the banks until you pay them back.
They are not even yours afterwards. If you don't pay your taxes/rates; the gvmt comes take your house.
So let’s say I own a house and I finish paying it off. Do I not own that house? I know I will have to keep paying property taxes on the house. What if I put the house into a trust?
@@andygomez9009No it's never yours.
You still pay tax and land rax.
Means you're a renter
That’s literally what he just explained if you would stfu listen and comprehend the words
We don’t own anything anyways so just learn how to play the game.
Remember he is talking about taking out a loan to buy assets.
Companies do that to grow their business by buying assets, makes sense. Don't take out debt unless you are buying assets.
Y'all say this shit like it's easy but not realizing how many businesses have went under because they were frivolously taking on debt like this and spending money during the good times of their business when money was cheap. Problem is It's tricky to know what," assets" to buy. . Those" assets" are actually called overhead and are most likely coming with their own debt of monthly payment. I mean you just said take on more debt right so surely those assets should be debt ? .
This dude in the video doesn't know a fucking thing about running a business. He sounds like a fucking underpants gnome on South Park.
Step 1 -get underpants (assets)
step 2 profit😂
And only buy assets that can generate enough income to pay back the debt used to buy them.
Speculation.
It's the cancer of the economy.
Do a useful job instead.
Speculators are parasites.
@slatsgrobneck7515 can you give me an example
He makes it sound so simple and easy..
All consumer debt is bad. Some asset and business related debts can be necessary and even good if carefully managed but always remember that debt even for good things is like a fire.. if it is kept small and safe it can warm you but if anything goes wrong or it grows out of control... It will burn everything to the ground
The trouble is that a lot of people dont know the difference between an asset and a liability
lie with your exposed ass
It may be the same. Somebodys liability can be your asset. Like eg. money.
Leave exceptions aside, the majority of things people put their money on are liabilities over assets
the problem is that assets ARE often liabilities. Or is he trying to tell us to take out debt to pay for something in full ? That doesn't make much sense does it.
Assets put money on your pocket, liability takes money from your pocket.
I love how much energy he has, a man who really cares about a topic is always refreshing even if the topic is rough
The way he teaches I’d literally ace his class 💯✊🏾
Every nanosecond with this guy is truckload of wisdom
I will absolutely take this man over Dave Ramseys joke advice. lol.
@@JohnnySilverfoot obviously
Who is he?
@@ballinspalding11Vusi Thembekwayo, hope I got the spelling right
This guys “wisdom” will ruin your life if you make one bad investment. And it’s the same kind of “wisdom” that CAUSED the Great Depression (even if it did later stimulate economic growth, it was still the root cause of why the Great Depression happened in the first place)
People taking on way more debt than they can afford. And it all sounds like fun until mass amount of people start to default on their payments because they are living a lifestyle they can’t afford to being with.
(Sorry for the rant, but fuck this scary to read comments like this)
If this guy was my teacher, you couldn't convince me failure existed
Endentures servitude just in a different way. Becoming financially free is difficult but not impossible! Never give up! 💪🏼
This dude is a logical & true Genius.
Becoz the bank wants more gravitas!
You're an old-timer😂
nailed it! 😂
I see you’re an OG
What’s gravitas?
@@fobb94a decade
Thx Mr.Vusi for this priceless,valuable knowledge.......Use debt(loan) to buy assets thus offset liabilities, hence becoming rich overtime.
An asset is a liability until you've paid it off is the part you left out
Really? In reality, the more debt the more debtors lose. The govt want us to be more in debt
@@fxorigins6624 The more the debtor losses what?
“Give them debt that’s so cheap they can’t say no” - puts a perspective on it which ever way you look at it
The same idea is behind why there’s no debt relief unless you owe $10,000 or more
Financial interest is the biggest oppression and a flaw in modern finance
Insurances are the biggest cons!
Especially vehicle loans.
Theres about 3 underwriters in UK. All various names are all agents of them.
The money goes straight to the top for investment to make the wealthy wealthier. Keep the others in struggles. They made it a law not to support the prople, but to feed their greed.
Car loan are the worst. You get a loan today for 5 years on a new car.. after 5 years your car is worth less than 50% of the original purchase price. You still paying off a loan taken out on the NEW car price - for 5 Continuous years!!! A depreciating asset!!! No way. Get a bike!
When I first heard about this, I thought it makes sense but it only makes sense if you have a solid plan on how to make a return on that debt. Then I realized that interest rates have been so low since the 2008 housing crisis that I'm now thinking that this is not normal and they can't keep interest rates this low forever.
yes they can.
You don't understand money at all. Do basic math dude. Interest on a 8% loan at 400k. Then do one on a 100k loan at 8%. You can clearly see how they have to keep them low.
No one can borrow if they raise interest to 20% or higher. The price of stuff is not cheap enough. This isn't the 70s or 80s. The old people screwed the country over and are still in office screwing the country over.
They convinced their kids to stfu and listen to their trash advice and laws. So they bailed out and gave billionaires free money. Made laws that destroy the america citizen in favor for big corporations.
Then after all this decided to up interest rates at a time where pay isn't raising at all. But everything else around you is.
So if they increase rates more. Only people buying houses will be rich elites. But they won't get loans. They will just use assets to get a personal loan. Buy the house with cash. Then refinance the house and pay the personal loan off.
This way they own the house out right and only have a refinance loan at lower rate.
This is why the rich get richer. Because they have jewelry, paintings, cars, houses, etc that adds up. Banks will take this as collateral and you don't need money to buy a house. Just need stuff.
The first finance guru to use the terms "assets" and "liabilities" correctly. I hate it when people call Gucci bags or sports cars "liabilities". They are assets, even if they're bad assets. The liability is the debt you used to buy those assets.
Explain to me how a sports cars puts money in your pocket. You need to pay insurance, parking, maintenance how is any of this putting money in your pocket. It's a liability that takes money out of your pocket.
And you don't even have an asset that maintains this sports car. Antique's with market value are assets and the should not be on a loan.
@@GeorgeLoraTaxAccountant It puts money in your pocket when you sell it. An asset is a possession that has monetary value. Obviously it's more complicated with intangible assets like a brand, but that's not what we are talking about here.
A thing isn't automatically a liability if it costs you money. A liability is an obligation to pay, like a loan that you have to pay back or the insurance for the sports car (which is separate from the car itself!). Liabilities are contracts, not tangible objects. It deeply worries me that your name states "tax accountant", while you apparently don't know the difference between an asset and a liability.
It comes from the Federal Reserve Act of 1914, which destroyed honest money of gold and silver as the only legal tender and allowed never-ending war to dominate the lives of the individual.
the nail in the coffin for representative democracy
Wasn't it 1913
This is also noticed by the fact that when you pay off loans your credit score goes down
True. My credit score was 805. Then I paid off my student loans and it dropped down to 785. The credit score indicates how well one is managing their debts. I'm glad to be done with debt.
These people are irresponsible. Never advise people to take on debt without also explaining to them the consequences of defaulting.
Everyone knows the consequences
@@sicelondlovu2403 You have entirely too much faith in the rationality and level of financial education of people. Remember the farmers in the UK who voted for Brexit and then were surprised when the EU farming subsidies stopped. Or the US housing crisis caused by people taking housing loans that they did not understand the payment structure of. Or student loans where students have been paying for years and they are shocked that even after paying more than they borrowed they still owe almost the same amount of money. Or the fact that there are people who believe the world is flat lol. People know that if you borrow you have to pay it back but they don't really know the details and all the little gotchas in the fine print. Hell most people don't even know that they stopped buying games years ago and that they are now only buying licenses to play the games and they don't own sh*t. No my friend you may know, but they do not.
DRM free games exist tho, just need to know what you getting into
@@_Woo.
Depends on how you set up your ABN/S and if they are a trust/Pty LTD
Makes sense. But that's why billion-dollar debt holders are also the holders of thousands of investment properties. I remember that one guy bragging about it, whilst I was thinking, "aren't you going to have to sell everything if we hit a recession, and who's going to buy it if not someone else with a loan?"
Availability of debt is a true test of a person's discipline and goals period most people can't control their short-term urges
Can anyone share the link if full video.. I think there is so much to watch
Simple process, takes time though, also requires initial investment
Unfortunately, in certain parts of the world (Canada) loans are very hard to get. There are a lot of requirements you have to meet before even qualifying for a loan. System don’t work like that anymore
yes they still work that way. You just can't afford the payments because of interest rates. Give it a year or two and rates will probably be back down again for you. Right now they are trying to keep this system from collapsing. Its a price they are willing to let you pay.
Thank goodness. Irresponsible people taking debt and bring slaves to their lenders thinking they are smart.
Same thing as Rober Kiosaki but told in a different way. He is doing a good job teaching more people Financial literacy.
That is great insight. You need to pay attention to people like him because he sees things that you can't.
Then 2008 comes around
Yeah and you get bailed out lol
Thank you.
@@DelightfulPager-ro4nw people that lost their homes didn't get bailed out. Only the banks did. Educate yourself on what actually happened
@@jhgolf25 Did you lose your house yh?
@@DelightfulPager-ro4nw No, I had just graduated college in 2008
Your credit score goes ups when you take up a big loan and are able to pay it down. 😮
And goes down if you pay up and close your credit card… I saw it with my own eyes - paying up your debt in full without extend it fks up ur FICO score
Having invested my money and having HYSA's . No need to take on debt . I'm good.
Solid logical advice to grow your business
If you're not in debt.
You're not in business.
Exactly. But you must have a POSITIVE CASH FLOW. Thats all that matters. Not the fact that you have debt.
@@IRLSuperb That's it.
Plus your assets are a tax deduction . Well everything in your business is even tyres.
In business you get taxed on whats left.
As an employee your taxed on the lot.
Everyone should be a contractor on a day rate.
That's old times. I generate enough cash flow for 10 people running a service-based business. No debt required. Online money changes the game.
I’m generating multiple six figures a month with an extremely healthy above average profit margin with 0 debt other than credit cards that get paid off every month. Also Im 27, I drive a couple year old Mazda suv and live in a cheaper city and rent where I live. To each their own. Who is playing the infinite game vs finite.
Untrue. You just don’t play by these rules.
This guy spilling out all the money secrets. If you can't understand this you're screwed 😂😂
the secret no one told you is that this debt cycle is about to go kaboom, they will print money their way out and inflation Will run wild, assets will go to the moon, the poor will suffer and the rich will get richer... dont be a part of this debt pyramid scam... buy Bitcoin
😳
This is what ive been trying tooo understand, when all these millionaires are saying get a loan. This guy explained really well
All those millionaires are millionares because they have businesses, not because they have assets. Not everyone can start and maintain a business. Most people simply work for a wage. That is the most expensive way of generating income.
but aren't assets are what generate money for businesses? Like in real-estate, the business is selling properties such as houses, warehouses, land etc....yes thats true about not everyone can start a business and maintain it, but what im saying is, that is how the rich stay rich and continue to "avoid" paying taxes. The money they make from their assets goes back to paying their loan. as long as they are generating more money than the loan they get, the business will continue to grow and allows them to invest that loan money into other assets. The private jets and super yacht the rich travel around in, the individual themselves do not own any of it under their name. Instead these are all put under assets.
Powerful teaching in under 2mins
I don’t understand. Could someone explain what he means by debt? And why he said the government would offer businesses “cheap debt”? I don’t fully understand why the businesses would want to be in debt at all. Or how it would lead to more people being employed. Can someone break it down another way?
Basically what he's saying is the government wants extremely low interest on loans, to encourage businesses into taking out those loans.
Why does the government want businesses to take out loans for. It's so businesses can use those loans to expand, build more stores, factories more investment into R&D etc.. this can cause businesses to grow, thus the economy grows more jobs are produced ect..
Then he proceeds to say businesses who take out these loans to get new loans to pay the old loans and rinse and repeat. Loan, Expand, Loan, expand so on and so on.
The stupid part is, his suggestion of getting loans to pay the old loans. That is incredibly stupid, because it's unsustainable. The Feds won't keep interest rates low forever eventually those loans get way too big and you collapse under the weight of said loans.
Is this the gravitas guy? 😂
1. Money is just paper that people assign value to
2. In order to be rich someone has to take in your debt as theirs
3. The government manages this construct by allowing the flow of exchanges of debt between classes
4. The more people you make poor the more riches you gain
5. In the end what will it profit for you to gain the whole world and lose your own soul
Instructions unclear loan shark wants my kneecaps
😂
Taxman is right behind him
😂
😂😂😂
😂😂😂
I was trying to explain this the other day but this is way more concise
He has a point but I’m sick of people not also discussing the risks of being overleveraged.
It’s called a capitalist economy, and it’s the most liberty oriented form of governance.
No it's not capitalism anymore
@zakariaelhimer1325 what? Slavery
Capitalism exists since XII century. It was not about infinite debt grow for most of its history
Its liberty is a lie , an artificial lie .
The govt shouldn't regulate the economy, neither should a foreign entity like the Federal Reserve, people living freely should!
I’m sure he’s very clever and speaking truths but I’m still confused.
Finance is completely another language to me. Probably why I can only work for a business not run one.
You got this anon! Lets use a contrived example.
You own a widget factory and employ 10 people for $100 a month. They generate about $10,000 revenue annually. So thats $9,000 before taxes. You still have to pay for utilities, materials, sourcing and so on, not to mention taxes and your own salary. After all of this, its around 3-5% profit ($300-$500).
How would you open another factory and employ more people on $500 a year? Debt. Borrow the $20,000 it takes to buy another factory. Assuming all costs are constant and double the employees, you now take how $600-$1000 annually. With improvements, exploiting economies of scale for sourcing material and so on, you can drive down your costs and go to $2000 annually. So in 10 years, the business will pay off the other factory.
The factory is an asset, so a savvy CEO wants to maximize ROI for assets. Hence companies owning real estate and wanting workers to go back to physical offices, so that the property value isn't reduced.
@@alextrebek5237 Thank you that actually makes sense. 👍
Don’t worry, he’s not.
@@alextrebek5237You missed the most important part of the video. To put it in context of your example. When youve taken the loan out to open the next factory. Instead of making 600$-1000$ as you assume you also have the cost of paying back a portion of the loan. For this example ill say 300$. So insteam of making 600-1000 youre now making 300-700$. But what the governent will do is instead of taxing you on the income ypu make before paying the loan, they let you pay first and only after that calculate your taxable profit. So you will the tax rate*loan repayment in tax sheild. This is what he was explaining about the government letting you pay the bank first.
You will gain* so assuming a tax rate of 20% you get 20% X 300$ (loan repayment) = 60$ lower tax then you would if you bought the company with your own money instead of the loan.
He is so right, love the way they explain this
This man just shared so much wisdom.
The full video link please
💥💥💥 WHY WOULD THE "GOVERNMENT" TAX WE THE PEOPLE WHEN THEY CAN PRINT ALL THE MONEY THEY COULD EVER WANT?
That would be called super inflation and u don't want that
Then everyone would be lazy since money would be plenty, there would be no one building skyscrapers, no one to maintain infrastructure, this is a system of reward when you work to maintain order in society and yes to maintain the ones at the top on top😅
Keeps rich people rich and poor people poor
They don't want your money, they want you to always be short of money and looking for their handouts, to keep you in check. It's a power game.
this video isn't for the sake of Americans. It is for the sake of those coming to America, who will be able to start private business and work for seven years, tax free. This is to teach them how to get ahead of us Americans, who mostly struggle already just to get buy - while paying the taxes that create an environment which exports our wealth while importing our replacements.
oh nonsense. I AM a fkn american. Every word of this video is for me, lmao.
maybe you should go listen to that clown Dave Ramsey instead. lol
None of y'all business. This is a meeting of people doing business in the African continent.
You get paranoid because America was mentioned ?
Needed this to take the next step in my business. 🎉
This is as simple and straight forward as it gets. the whole system is debt there is more debt than money it cost more to make a penny than a penny is worth ❤
This is a great explanation. Thanks 🙏🏼
Gravitas😂😂
This is the one underated comment😂😂😂
Whenever I see him in my shorts feed, I think of this 😂
This sounds exactly the same as what Robert Kyosaki said.
Kyo is a con man.
He was selling get rich quick courses on late night TV infomercials in 2006 telling people to load up on real estate.
..this was just before the 2008 crash.
- what is your name?
- Donald
- Merry me
Listen to this man so that 2 out of 1000 of you will become rich. The other 998 are collateral damage. He will be paid.
Frankly, this is why the best kind of debt is the credit card debt you pay off before interest is applied at the end/beginning of the billing cycle. One of the few ways to game the system back.
the 1929 cycle is just around the corner again
CBDC will be enforced on the people.
This time, if the government lends companies money, what stops them from automating and outsourcing though?
The Bank of GRAVITAS!
Why do some people say GOV-MENT instead of GOV-ERN-MENT? He threw away an entire syllable.
People have different accents, they come from different parts of the world and speak differently. Grow up.
@@MrMabobozthanx boss. This guy had also put a lot of stress on me because of his unnecessary criticism. I also fall under the group that pronounce it as "govment". That's how I was taught and now at age 40 someone is trying to say am wrong 😂
His native tongue is zulu,you can hear what he saying thats what matyer..to hell with the syllables...
very simple explanation sir, thank you.
This guy is awesome, explains it so simply
The Same thought of Robert kiyosaki
That’s why I use a Roth IRA or life insurance instead of going to a bank to invest or use OPM, which is other peoples money, but you still have to pay them back with some interest so the first two are the best options
No sales pitch, just raw facts in the shortest form ever. That's 5 years saved and money from a university.
Dang...
taking loans stimulates the economy. Without debt growth would be too slow
never borrowed money to grow my business. when the crash came i had no problems like people that had debt.
This video is a golden nugget
If I was that lady, after the show I would've told him ... "Oh we go together now" ❤ ...
Ive actually heard this before but this guy made it make sense
A classic academic outlook and approach. Works in theory and on paper, but real life is different. “Buy more assets that will out-grow your liabilities” is so broad, vague, and cliche.
Yes, because we use the debt/fiat currency to our advantage and produce stockholder wealth. Not just for the owners, but for the public and employees that are vetted into their respective companies. You have to move up the ladder.
80% of US GDP is consumer spending and most of it is using dept (credit cards,car payments,loans,etc).
This is exactly what Robert Kiyasoki be talking about. Good debt vs bad debts
I really need to know who this amazing man is.
That to keep you in the system and always continue opening new loans.And they can be long terms as well.
The difference is where you apply the debt. For a business it is funding for net gains. For consumer, its a sink hole unless its used for what would bring a return.
30 seconds... he said it all!
Well said. 💯 Fact
The problem with that is that debt is financially unsustainable. Once it reaches past a certain threshold it can become so burdensome that it's extremely vulnerable to collapse.
Go ask China, how unsustainable debt caused their housing industry to collapse, you cannot simply accrue debt ad infinitum. It's like building your foundation on top of sand.
And that collapse could have a chain reaction downstream, causing an economic meltdown.
People don't talk enough about cash flow, there is so much buzz about being "debt-free" that people forget that debt isn't necessarily a bad thing.
There needs to be more education on "How Money Works" because once people realize how it works, they will realize debt isn't necessarily a bad thing
A group of people together can buy more land or buy a ranch together than a single person. We do this in the UK when we want to buy a big country estate. 1000 people $14,000 each or 100 people $140,000 each
Butte Valley Ranch ,$13,500,000 860,000 Acres
Robert kiyosaki is a great example of using debt.
Or, build your business as big, or small as you see fit, and LIVE YOUR LIFE.
The thing people don't remember is that the business cycle is caused by the central bank manipulating the money supply. This could all be avoided. But above all, once it happens the supply must remain stable so that markets can actually clear instead of remaining supported by inflation.
Debt for appreciating assets is good
Debt for consumer spending is bad
The only way to win is NOT to play.
Stop taking debt. Stop spending money you don’t have on stuff you don’t need to impress people you don’t even like!!
We solved deflation with runaway inflation, and we havent corrected for the problems we caused.
We are now in a world where workers can no longer advance at all because capital begets capital and the labor class has comparatively little capital, so its impossible for anyone that isnt already a part of the wealthy people who began runaway inflation to take advantage of the system.
Except in a downturn when the assets you bought don’t grow, they shrink and the banks that lent you the money value them less than what you bought them for. To refinance you need to find money to pay the loan down enough for the banks to lend to you again, at a 3x original interest rate. If the income from these assets has remained static, you go broke…