Can you use debt to build wealth?

[Nomad]

You can use your debt to improve your financials. In fact big companies use debt to make money. How do that do it? Well, they borrow money and use the money to income-generation programs. They borrow money to invest in the market. They pay their debt through the return on their investment. IN 5-10 years, they pay back their debt and their assets will be 100 percent theirs. Do you use debt to improve your earnings?

 

[Augusta]

Well, to a large extent you can if we are to go by your summation. But this is a very risky way to build wealth. Things sometimes don't go as planned

 

[King Belieal]

Those are established multi nationals and not just a mini store. Those big companies are established and it is a 60 percent guarantee that they would payback the loan.

 

[eLdavis]

This is true, but at the same time it could also backfire. There are situations where after borrowing you are not able to invest into something that generate money for you. This would become an issue.

 

[Stardom22]

According to my own opinion one cannot use the debt to build one's wealth. The most sad thing with that is the more you take credit for whatever reason the lesser are the chances for the building of the wealthy

 

[Suba]

Although we should avoid unproductive debt or consumptive debt, there is also productive debt which is debt we use to buy assets such as property, machinery or increase business capital, almost all businesses have debts, both short-term debt and long-term debt, or debt to suppliers of goods. So basically we can use debt to accelerate increasing wealth.

 

[Augusta]

You can enhance your financial position and create long-term wealth by leveraging debt to invest in appreciating assets such as real estate,

 

[Fire&Rain]

I saw that process where i worked. Every chance the company got it gets a loan, purchases trucks. It was a logistics company.

 

[Trush Jodie]

I saw that process where i worked. Every chance the company got it gets a loan, purchases trucks. It was a logistics company.

It would work for the company if it's turnover is very high. They can get loans and pay it back quickly.

 

[Springtime]

Most big corporations use this strategy to grow or expand. And it's not difficult for them to borrow money. For individuals and small businesses, I will not recommend taking this risk.

 

[riberet19]

Yes, of course, this is called positive debt, millionaires and wealthy people often do this, but for that you need to have enough money to pay back the debt in case something goes wrong.