Banking and Finance

Banking and Finance  » When borrowing money is profitable

When borrowing money is profitable

If you save money, the money will save you

The problem with most people's finances today is that they are

not getting enough income to satisfy there needs and wants.

People are naturally going to buy things they want even if it

means spending more than they have (credit cards), and they know

in the back of their minds that they cant afford it, but they

will get it anyway. I think people will develop their own

budgeting scheme when their income meets their wants then they

will be budgeting masters, all by their selves. But till then

there will ALWAYS be people in debt no matter how much you

preach!

I think a solution to some people money problem is to teach them

how to make extra money first, and then teach them how to budget

and save it. Americans really don't want that much; it is the

hobbies that get people in trouble, bills, spending too much on

golf clubs, car parts, computers, things around the house

etc.

I don't know about you but this is how I feel about life. Right

now, I am working a 9 to 5 job making $3200 monthly. I don't

want to be stuck knowing that I will be 'working' for the rest

of my life, taking orders from bosses, putting up with BS and

other peoples attitude, having to get up in the morning when I

want to sleep in and that fear of getting fired. Currently, I am

in this situation but will not be soon. There are people right

now making well over $20,000/monthly working for their selves

and they are everyday people that you see walking their dog, in

supermarkets or even that person arguing with the McDonalds

cashier. If these people ever do go back to work for someone

else they can do it "stress free" even if the job is stressful

(think about that).

Before, you can work for yourself you have to decide one thing:

If you really want that responsibility. If you said yes, you

have gotten over the biggest hurdle and you will not be limited

to the income your employer is giving you. I know what I am

about to say will be over simplistic but I will save the details

for you to research on your own. Here is a breakdown

1st: determine if you really want self-employment

2nd: decide what area of business you want or good at.

3rd: If step 2 requires money, their are program out

there that can help you get started in internet business,

selling or something else before you start in what you want to

do. For example, "I want to own a photography shop but it costs

$10,000 to get started. Well, if I sell product A for a year I

can do it". You never know, whatever you get into before your

dream business may make you $50,000 a month and you may forget

all about that photography shop. I can help you here too.

4th: Research, research and do more research. Find out

what you competition is. Find out how much money they are

making. Find out where they are advertising. Find out what it

takes to get started. Find out where your customer are etc, etc,

etc..research

5th: EXECUTE!! I mean once you have confidence go do

it.

They say that 90% of home businesses fail for the first time.

And you may fail, but all you have to do is try and try again,

please don't give up. Believe me, you will get it right and when

you do, you will be very successful. The percentage of people

who fail for the second and third time is much lower than the

first timers.

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They say the best investment is buying a house (real estate).

You are borrowing money to invest! Every year that property

should go up 7%. So lets look at some figures. You buy a house

for $250,000

year 0: $250,000

year 1: $267,500--------profit $17,500

year 2: $286,225--------profit $18,725

year 3: $306,260--------profit $20,035

year 4: $327,699--------profit $21,438

year 5: $350,637--------profit $22,938

------------------------Total profit: $100,637

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Your profit after 5 years is $100,637 + tax benefits - repairs -

local taxes - interest - your time

As we all know maintaining a house is hard work. You borrow

money to invest in real estate, well why not borrow money to

invest in other things such as mutual funds, hedge funds or even

invest in yourself and learn how to trade money or stocks. Here

is an alternate scenario. Lets say you borrowed $250,000 to

invest in 5 hedge funds or managed forex account receiving 35%

annually. You are charged by the bank 10% apy. So, you will

receive 25% in profit a year.

year 0: $250,000

year 1: $312,500-------year1 profit: $62,500

year 2: $390,625-------year2 profit: $78,125

year 3: $488,281-------year3 profit: $97,656

year 4: $610,351-------year4 profit: $122,070

year 5: $762,939-------year5 profit: $152,587

-----------------------Your profit after 5 years is $512,939 -

management fee (around 5-10% per session)

Of course, you can make more money depending on how much you

borrow and the return you get. Now you see how those rich people

make a living without lifting a hand. They are the ones who live

the longest and have the best life!

There are risks involved with this. What if one of the trusty

(SEC approved) funds you invested in suddenly runs with your

money. You may be able to recover from this if you invested

among many funds or programs or you are receiving high interest

on other investment portfolios.

A house or real estate is your safest investment---No one can

steal your house. Well sorry to talk yall half to death, I can

go on and on about this stuff.

About the author:

About Author:

Luke is an independent entrepreneur helping others make money.

Website: http://home.coastalnow.net/~lukejea/

Email: lukejea@coastalnow.net