Granted, it might make sense for a sober person to obtain a loan in an exceptional case. An example lies in a mortgage to buy a home as an alternative to paying rent.
On the other hand, taking on debt is in general a costly way to finance any kind of personal activity. For this reason, the shrewd readers to whom our blog is addressed should be savvy enough to shun from the outset most or all forms of indenture.
In the world at large, however, the practice differs from the prescription in a big way. In particular, an overhang of debt is a widespread problem in rich countries as well as poor ones. As a result, a lot of people we encounter in our daily lives could be struggling with the hydra of debt.
In that case, it would make sense for everyone to learn more about the snags and fixes in this area. The background knowledge should provide a sturdy foundation for informed discussion with other folks. Without further ado, we turn now to the guest article.
– Steven Kim
The attractions of a hearty program of investment are obvious to many people, including those struggling with debt. For this reason, a common question asked by debtors is the following: “Should I pay off my debt first or invest the cash I have on hand?” Perhaps you or someone else you know may be one of the folks grappling with this very issue.
Suppose that you’ve taken out too many lines of credit and can’t manage them properly. Despite the past mistake in managing your personal finances, you might have thought about investing your money in order to earn healthy returns then using the proceeds to pay off your debt obligations. So if you already owe money to a number of credit card companies, should you invest the cash you have or use the funds to repay your debt?
On this topic, the verdict of the financial counselors is clear: you should first take care of your debts as you could be at risk of filing for bankruptcy or being sued. After casting off the burden, you can go about investing your hard-earned dollars. Further information on this subject is available in a separate article which talks about professional options to get out of debt.
Options to Ensure a Debt Free Life
An extreme approach to getting rid of debt is to declare personal bankruptcy. On the downside, though, this drastic move will land a crushing blow to your credit score. For the bulk of folks saddled by debt, however, there are far better ways to deal with the deadweight.
If you decide to pay off the money you owe on your credit cards, for instance, then you can turn to professional advisors such as counseling agencies that specialize in the consolidation of debt. In that case, a debt consultant can guide you through the process of unloading the burden. As an example, legal options might be available to you for lowering the rate of interest or extending the period of repayment in order to erase the entire obligation through a monthly program of affordable payments.
Crafting an Investment Plan After Repaying Debt
After casting off the chains of credit card debt, you can turn in earnest to the task of fixing up a robust program of investment. For starters, you should keep track of the latest developments in financial markets and investment vehicles in order to explore the full range of options available to you. Each type of asset comes with its own combo of strengths and drawbacks.
Moreover, you need to consider a welter of issues such as the maximum gain and the minimum loss in store. Due to the complexity of financial markets, though, hiring an investment advisor can pay plenty of dividends as you thrash out a program of investment tailored to your personal needs.
If you don’t have any debt hanging over you, you can focus on devoting your time, money and energy to the financial markets. As a prudent investor, you want to avoid any schemes meant to get rich quick, such as taking on margin or any other forms of leverage. In general, the flaky ploys for fat profits are far more likely to land you back in debt than make you rich.
To sum up, you need to take the safe and sound course in managing your personal finances. If you find yourself in debt, the first order of business is to take concrete steps to cast off the millstone. Then you should make sure to stay out of debt so that you can devote your money and energy toward pursuing a hearty program of investment.
– Marlon Powell
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