Personal Finance Part 12 - Indebtedness <--- From http://sgmusicwhiz.blogspot.com/
Everyday, we are like a Juggler juggling the balls into the mid air and catching them with our hands, and hopefully NOT to drop any ball. To some, dropping of ball might be disastrous, and to others may be even game over. Everybody must do whatever it takes to keep juggling the balls.
The left hand is the Income Hand (active and passive income) and the right hand is the Assets Hand (including saving). Some have 2 bigger hands; some have two smaller hands, and others have only one hand. The bigger the hands, the easier to juggle the balls into the mid air.
One Ball Jugglers
They only juggle one ball called EXPENSES. These jugglers usually have little difficulty in juggling the ball. Some with big hands don't even drop any sweat. They just have fun. They are loving it.
Two Balls Jugglers
They add a second ball called LIVING DEBTS (e.g. housing, car, education, etc). Life is getting exciting in juggling two balls and keep them in the air. They may have to sweat more, and may have to put in more effort. But, they believe life is fun with more balls. They think that they have the necessary skills and don't drop any ball.
Three Balls Jugglers
They add a third ball called INVESTMENT DEBTS (e.g. leveraging to get more returns from borrowed money). Life is getting even exciting in juggling three balls and keep them in the air. They may have to sweat more, and may have to put in more effort. But, they believe life is even far better with more balls. They have the highest skills of all, and hopefully there is no strong wind blowing against them and causing them to drop the balls.
You decide what type of Juggler you want to be. I definitely want to be One Ball Juggler and closing my eyes without having worry about dropping the ball.
http://createwealth8888.blogspot.com/2009/03/debt-free-and-that-to-me-is-richness.html <--- further reading
There are two ways of making money from money:
1) Save money and use some for investment. This is a slow and less risky way of growing money.
2) Becoming a little greedy to take some risks to accelerate more money by borrowing more money to make money. Hopefully, Mr Black Swan doesn't pay them a visit and they will be fine.
http://createwealth8888.blogspot.com/2009/01/understanding-debt-risk-and-leverage.html <--- further reading
Posts
