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How To Plan Investments While Avoiding Bad Debt?


Investments well planned can show you bright days in the future. If you plan it right, you will always reap it the best. But for this, you will have to understand to invest the right way and avoid getting into debt in the process. There are two ways to invest. One is by investing right away with all the cash you have in. This needs you to have cash ready to invest, and in this case, you will not be depending on anyone or any source and just flat on your savings. Another way is to invest through taking a loan when you raise a sum from a lender through a loan, and then invest it with plans of growing your money.

How To Plan Investments While Avoiding Bad Debt

Both ways have their advantages and disadvantages. While the method of investing in your savings is a risk-free way and does not get you indebted, it may take a long time to acquire enough wealth to invest. Again the way if investing on taking a loan is a quick process and helps you invest fast whenever you want to, but risks you getting into bad debt if you become unable to pay back the loan on time.

Investment with your savings

Although investing with your savings may seem like a nice idea to you because it is risk-free, you still risk your lump sum money that you are investing. If you are investing in something that will be depreciating value with time, then you have no chances of regaining the money back with returns in the future. And if you are investing in something which would be getting higher valued with time then also there is no surety that you will be able to resale it to liquefy the wealth invested. Also, all the money you saved gets invested thereby leaving you with no liquid cash or cash in a ready to liquid form. Hence, such form of investment may not just take much time for accumulating the required money, but also may put your hard earned liquid cash into stake for uncertain time and block it.

Investment by borrowing money

Not only individuals but entrepreneurs also take this route, which is much popular for several reasons:

  • You do not have to wait for an uncertain or long period to accumulate money or save money forcefully. You can get the money you need immediately and instantly.
  • Instead of waiting for several years to accumulate money, you invest by taking a loan instantly, which you may then pay back in several months in easy equal monthly installments (EMIs).
  • Waiting to invest often changes the market situation and process of the commodity or property etc. But when you instantly take the decision to invest and the difference between calculating the right time to invest and the investment date is not much because of timely approval of the loan, then things work out as planned, and you invest at the desired price range.
  • Sometimes certain investments require a big amount which may take you ages to accumulate, and then your all plans of using that investment fails due to delays. To save time, and utilize your investment, as it happens in businesses, it’s best to go with a loan to get the instant big sum of money.

Things to take care of when you are taking a loan to make an investment

A loan is a big amount, and getting it approved is not just the only thing you have to think of. You have to think of what rate of interest you will be paying for it, for what tenure you will have to pay it back, what will the monthly EMI for the loan be, and if it will be affordable for you based on your current earnings and future earning plans, and so many things. Therefore, taking a loan to invest is not just a small two-step process as it seems to be. It covers a lot of planning and calculations, future planning and budgeting. Then only you can successfully enjoy taking of a loan to invest, and finally paying it back to enjoy your wealth.

This process has some considerable hurdles. One of the most prominent hurdles is the uncertainty, that you will always be financially sound or capable of paying back the loan. If you fail, you will be the defaulter. And defaulting once or twice may lead up to serious issues and series of defaulting and credit score lowering, and so many problems in a chain later. Hence, you must consider if you will be able to pay it back with proper plans. You also must have a proper alternate plan if you are unable to pay and have to manage the money from alternate sources like debt consolidation etc. You also must have enough ideas about other debt management ways when you are technically getting indebted. Using resourceful links like Nationaldebtrelief.com can give you a better insight on how to manage your debts.

Investment and debt

One of the serious problems many individuals and entrepreneurs get into is when they take a loan to invest and multiply the money or wealth, and instead of that happening, they get into bad debt and lose their money, reputation, mental peace, and creditworthiness in this loophole. To stay out of this problem, you must have proper plans to invest, to lend, and to save. Savings must not stop while you are paying EMIs for the existing loan you must save in any way and always so that you have some buffer to fight any such financial crunch.


Whether you invest through direct savings, or you take a loan, the aim is to make money and grow money. And your scheme must fulfill this. If your aim to grow money fail, then all the risk taken gets meaningless thereby turning the venture into a failure. Therefore to increase chances of success, you must take any loan with a proper understanding of what to anticipate.

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Shelly Lane is a dedicated blogger. She love's to explore new things and share that on her blogs. She joined this platform to increase the reach & interaction with the users on this platform. Moreover, she has written 100+ blogs on various platforms related to various topics and categories. Follow on Twitter to them.


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