How billionaires make money out of Debt
When we talk about billionaires the first image in our mind is of Jeff Bezos or Elon Musk or maybe Bill Gates but only few people actually want to know how they make money. Most people think that they were lucky or they had financial support but most entrepreneurs took a loan to start a company, so today I am going to tell you how rich people use debt to make money.
After hearing my sentence you would think that isn’t debt bad? Debt cannot be key to success or something else but this article might change your way you think about taking loans and using credit cards, so here are a Two ways you can make money out of debt.
- Credit Cards
Many people consider credit cards bad and mostly avoid to use it but what if I tell you that you can make a TON of money and save a lot of money using your credit card, the reason most people go in debt because of credit cards is because they don’t use it responsibly and use their full limit but you need to change this way, you should only use around 30% of your credit card limit let’s say your credit card has a limit of 10000 Dollars then you should use upto only 3000 dollars every month. This would help you build a credit score and help you get more money in future whenever there is a need. Credit cards should only be used for daily and small purchases like grocery or cheap electronics that cost than 1000 dollars. Credit cards should not be used to make big purchases. You need to pay using a credit card even if you have money to buy a certain product because this would help you build a credit score and you can also pay off every money before every month so that you don’t have to give any interest. If you buy a electronic product using a credit card you can also receive cash backs which are not given to people who pay with cash. Most Credit cards give you insurance on stolen products and also helps you if you get scammed online as that is their money and bank would work hard to get their own money. Just remember Credit cards can be very useful when used responsibly.
2. Bank Loans
Now you guys would think that loans are the best way to get in Debt and the answer is yes but actually you can make profits out of loans if you chose the correct asset. Usually bank charge 7% interest on home loans but you can actually use this to your advantage. First you need to find a stock that offers 10% interest rate per year and as the bank charges 7% interest you can keep the 3% in your pocket by doing nothing by this way the bank and you both make a good profit and the best part is you are making money using someone else’s money. If you do not want to invest in stock market then you can use real estate for this. Most Real estate offers more than 10% growth each year so you can buy a house and use the same technique but the best part is yet to come you can rent the house or property to someone and make more money from it. In the end bot stock market and real estate are very risky and you should do correct research before investing in it.
