Borrowing Money for Long-term Investment

By DennisKruiks on January 23, 2011 In Finance

It is the real fact that many people are in a habit of borrowing money with their friends and family members. And most of the time they could not return on a given time this will create trouble in their relationships with them. So the better idea is that you should borrow money with your relatives only when you are going to invest to get a long term decent returns.

It is not advisable to borrow money for short term consumption. Many people try to make their life luxurious by buying some electronic devices or a holiday package with the help of credit card or from a bank loan. It is really a bad idea because for such small things you need to pay the interest to the borrowed money which will let you in trouble. The borrowed money which is utilized in a productive way can bring a good return that will help you to pay the loan.

It should be noted that the loans that is taken for shopping or holidays charge high interest rate by bankers or investors it is because the money that is investing for buying clothes or goods does not enhance its value. When bankers or investors have a confidence that his customer will use this money in a productive way and there is also a 100 percent chance of return then you can get a mortgage in a much lower interest rate. So wise people always encouraged loans that are investing in a productive way and that also have a future value.

To improve your financial health status ones should always borrow money for investing which will also hold its value in future.

Borrowing money to buy a car is not advisable it will only decrease your financial health but it doesn’t mean that you should not avail this luxury you can buy that car which is affordable for you. Moreover, you can buy regular consumables with the help of your credit card but you shall pay bills in time. It will also help in getting a positive credit report. Borrowing money to invest with a long-term vision is always a good idea.

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