I was conversing with a friend of mine today, who is a millionaire, and one thing he kept mentioning was never to rent or borrow. I was forced to ask him how he got the money to buy properties as a beginner. I was expecting something realistic from him, because I know not all of us have money to purchase or invest all the time, as things are very expensive. There is a high probability that people can’t afford a property and they rely on renting or borrowing money, but according to my friend's philosophy, you have to buy and not rent or borrow money.
As the conversation goes on, I realize that my friend came from a rich family. So, he doesn’t know the situation of an average person. I understand you don’t have to borrow money to start up a business or borrow money to secure a property or land, but there are some instances where you just have to borrow or rent. It might not be the best decision, but if it guarantees something that will work at the end of the day, just do it.
Don't rent and borrow
It is easy to tell people they shouldn’t borrow or rent, and the truth is that borrowing or renting can be one of the worst decisions you make. It’s not bad when you borrow or rent if it's putting money in your pocket. I have a brother who leases farmland and makes millions on the land every year, and the amount he leases the land is just a penny.
When you are in front of an opportunity, you may not have money to secure it, especially if it’s for a business like land. You need money to secure the land, and to start a business on it, you can just rent the land for years and start the business, but you’re waiting to buy the land of pay in cash, it might take a long time and lose both the business and the property. This still doesn’t take away the fact that borrowing and renting can be dangerous, but you just have to do it for the right reasons.
+Rent and buy*
When people tell you not to borrow, they are saying this because they know that not everybody knows how to manage their finances. Some people borrow just to secure liabilities, but when you borrow money to secure properties that will go up in value, this is where borrowing makes sense, and when you are renting for the meantime, just to get more money, it is also when renting makes sense. You won't always have money to secure the opportunity in front of you, after your research, if it's worth it, just borrow or rent, even the rich do the same.
People don’t understand how difficult it is to raise money. Some of them have forgotten how hard it is to put money together. Like I said, it will be stupid to borrow money to acquire liabilities or to just keep renting when you can buy and be the owner of the property.