"Weijia Anjie Mortgage Expert" will give you the answer:

Debt is a double-edged sword. It can bring you wealth, but it can also send you to hell. Archimedes famously said, "If you give me a fulcrum, I can move the earth." Some people like a stable and worry-free life and disdain the skill of leveraging; some people try to use levers to move the road to wealth, but their posture is incorrect and they hurt others and themselves. Some people think, "If you are debt-free, you will be light-hearted. Why borrow money? You can do as much as you have with as much money as you have." They like to flaunt their view of money in a righteous way: they have neither external debt nor domestic debt, that is, there are no financial institutions such as banks. I never bow my head to borrow money from relatives and friends when the organization owes money. There is also a type of people who advocate living a life that is free and unrestrained. They like to buy, buy, and buy globally. One credit card is not enough, two, three... They overdraw their future money to meet their current enjoyment, and slowly put themselves into Dragged into a whirlpool of unpayable debt. Neither of the above attitudes toward debt is advisable. What is the correct debt posture? Today Xiaowei is here to talk to you about three issues we need to understand before taking out a loan.

First, should I take a loan? When to borrow?

1. Pay attention to the macroeconomic situation and borrow money appropriately in an era of low costs and low interest rates. At this time, use the leverage effect and use small funds to leverage large funds to earn some wealth.

2. If there are good investment opportunities and good investment projects, and the benefits it brings are greater than the cost of liabilities, you should be bold in lending and use debt funds to drive the potential for asset appreciation.

Second, how much should you borrow?

How much you should borrow depends on two major debt ratios: the asset-liability ratio and the financial burden ratio.

The first financial ratio: Asset-liability ratio = total liabilities/total assets

The asset-liability ratio is an indicator often used in corporate financial analysis, and is also commonly used to measure the performance of individuals or families. Comprehensive solvency. The asset-liability ratio is generally 50.

The second financial ratio: Financial burden ratio = annual debt/annual after-tax income

The financial burden ratio is the ratio of the debt principal and interest that needs to be paid when due and the income of the same period, reflecting a certain An indicator of the health of financial health over a period of time (such as a year). The financial burden ratio should not exceed the warning line of 40.

People pay more attention to the first ratio, but often ignore the second ratio. It is often said that "cash is king" in business operations, and the same is true in family operations. Debt crises caused by broken capital chains are everywhere. The debt burden ratio can help you put on a safety belt to resist risks.

Third, ask yourself why you want to borrow money?

Why loan? Distinguish between "good debt" and "bad debt". "Good debt" can leverage financial leverage to bring multiple benefits, while bad debt can do the opposite. We must actively increase our “good debts” and avoid “bad debts”.

“Good debt” means that the benefits (or benefits) brought by debt are greater than the costs (or interest). For example, taking a loan to obtain a higher level of education, investing in housing, or investing in a healthy fitness card.

"Bad debt" is a purely "consumption" debt, which is to spend future money to satisfy the individual/family's early enjoyment. For example: car debt, renovation debt, foreign travel (installment payment), buying designer bags.

"Enjoy in advance" or "delay gratification", spend future money or accumulate wealth for the future. You decide your debt!

Debt is a kind of ability, and debt is also a kind of welfare. When you have a stable income, when you have sufficient asset guarantees, and when you have a good credit record, you have the ability to take on debt. When the benefits of debt are greater than the cost of debt, you enjoy the benefits of debt. The richer you are, the easier it is to borrow money, and the richer you are, the easier it is to earn money. Only those with the ability can enjoy the benefits of debt. Therefore, increase your debt capacity, but please be careful about leveraging debt!