Albert Opoku

Life Lessons: 30 – Never go in for a bad loan

Life Lessons: 30 – Never go in for a bad loan

To owe another man is to be his slave.

“Not all that glitters is gold.” This is an old adage, but its wisdom lives on and will continue long after our generation. We live in a world where living beyond our means is considered “normal”. Our governments run on deficit budgets, the companies we work for run on huge loans from banks, and superstars who earn millions are sinking into debt.

Another one of the important lessons I wish I’d learned a lot earlier in life is the difference between a good loan and a bad loan; especially in this era of credit cards and all sorts of enticing bank loans and credit systems being shoved down our throats.

I am most grateful to finance author Robert Kiyosaki for opening my eyes to the difference between a good loan and a bad one. If I had known this difference earlier in life, I would not have gotten myself deep into debt at an earlier age and ended up paying so much in interest for three continuous years. His lesson can be summed up easily. In short, a good loan is one someone else pays for you and a bad loan is one you pay yourself. Want an example? Say you buy a taxi; the passengers end up paying off the loan and the taxi becomes your property. If you buy a private car, you will have to pay the loan yourself.

So does that mean you should not buy a private car? No, the simple wisdom is to buy the taxi, get the passengers to pay off the loan, and then get them to buy you the private car too. Apply this to every facet of your life; it will mean delayed gratification, but it will save you years of misery in what Robert calls the “rat race” – simply put – invest in assets and use the profits or interest to get the liabilities.

If you have not as yet read Robert Kiyosaki’s book, “Rich Dad, Poor Dad”, then go grab a copy and save yourself years of financial misery.

Download the full book (52 Lessons of Life) for FREE

Share your view on this lesson using the comment section below



5 Responses

  1. Great post, and i like the example you give of the car!
    I assume you were at the event at the weekend? Wasn’t it great?!
    To your success!

  2. @ Lavina, loads of thanks, you know you inspire me as well, so to receive your kinds words is really appreciated

    1. Dear Alberta
      loads of thanks for your kind words, what better enterprise is there for man than to share one’s knowledge? it is true that a candle looses nothing by lighting another….

  3. I wish I had known this before going for a loan for my masters programme and instead of investing the balance, I used it for a private car which is a big liability on me considering the fact that deductions are on-going, economy worsening coupled with fuel hikes.

    I will rather sell the car, invest the proceeds and delay the luxury for a better and relived life now that my eyes are widely opened. God richly bless you. Was part of today’s programme (unlocking youth potential) and you motivated me a lot. Keep up the good work.

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