WEEK 3 DEBT

Debt is like a disease- we can avoid it.

Borrowing in finance can be positive- if we borrow monies to earn a higher rate of returns and fulfil all loan repayments. It can be negative if the underlying asset lossses their value causes impairment and subject to loan re-call . Meeting debt repayments is a physical toll - loan servicing can cause mental, physical and emotional fatigue - especially when there is a disruption to our income, loss of a job, and/or illness set in.

We become slaves in the modern sense and loses our freedom 1 Cor 7:23. Proverbs 22:7 To be out of debt should be one of the retirement goals. Deut 28:1-2

Hedging is another concept to protect against expectation of currency, oil prices, interests rates in one direction - but can also yield disastrous results if we are too slow to react to the changes. In this sense, an emergence fund must be started to cope with future uncertainties. James 4:13-15.

Is there a good debt and bad debt -

Good debt - appreciating assets

Is housing mortgage loan on an affordable house or property assets? Housing loan repayment must not strain our budget

Is business debts ?

Is car loans ?

Credit cards roll over ?

Holidays on instalments ?

Banks thrives on loan extension- most of us are working for the banks. We must try GOOD. Get out of debts.

~ Pray

~Establish a budget

~ List your assets

~List your liabilities