Banks make money off poor people.

Is it right or is it wrong? Why do people take out loans? Its because they are too poor to afford something they like/want/need.

I made this post because I believe it will help people see why its beneficial that they succeed during their lifetime. Banks give out loans everyday, whether it be a line of credit, credit card, personal loan, vehicle loan or house mortgage, they charge interest as a service fee. You probably don't care since there is absolutely no way you can buy a house without a mortgage right? Well if you think like that, then you won't bother trying to find other ways to do it.

Now depending on the mortgage you've selected, a bank can make up to double your homes original value, if you take advantage of the full 30 years to pay it off.

Some mortgages even require that you pay the interest off for the first 5 or more years so nothing or very little goes to the actual principal of the home... So basically your quarter million dollar home after 5 years, you still owe the same amount on it, even though you've paid $1500.00 dollars a month for it for the past 5 years... what a great deal...

I am not saying its a terrible choice to use a mortgage, I am simply suggesting that you shouldn't utilize the entire 30 years to pay it off. Instead of just paying it pay check by pay check, go out and seek opportunities so that you can pay it within a fraction of the time, that should be your first priority. Think about how much money you'll be saving yourself; you can then put these savings into bigger and better things. A house is hardly the "biggest and best investment ever" like everyone makes it out to be. You could believe it is, if you're one of those folks who don't want to live an interesting and exciting life...

Interest is a huge set back.

Especially for the poor and middle class people. All its doing is wasting your beloved time to get ahead. If the bank is going to make $120, 000 from you in interest from your mortgage; while you are getting paid hourly at $20.00 per hour, look at how much time you are wasting paying off the interest. 6000 hours or 500 - 12 hour straight days. This doesn't even include getting taxed, so you can imagine how much time you'll be blowing for your so called great investment (one house).

Nobody can even work 500 straight days for 12 hours and save every single penny they earn (you need to eat, sleep and live) so the time doing it will be much longer than anticipated. Don't think "ohh.. it'll just take a year and a bit to pay it off" because its more like a years worth of work spread out which ends up being 6 if not more. That's like 10% of your life paying interest on one thing. Look at all the time you are throwing away...

Insightful thinking. Getting a loan for an investment that pay's out higher, not a product.

When the opportunity arises, it might be possible to use a loan to progress if the investment is right. These investments can be anything, a friend starting a new company, home renovations, personal business expansions, the list goes on... When buying into something like these, you have the potential to walk away with an exceptional return. You should be aware of a few important things prior to going out and finding an investment that will profit for you, there are many scams out there that you need to familiarize yourself with. If your gut feeling says its too good to be true, it probably is. Make sure you know who you are trusting and dealing with.

Stay away from:

1. Really cheap vehicles and electronics for sale online, if they seem to good to be true, they most definitely are!
2. Unfamiliar high yield investment programs promising large amounts of return over a short term.
3. Anything that seems to good to be true!

There are way more out there, you just need to keep your eyes open and don't fall for any!

Banks and business.

In the past, there have been people who used financial institutions to fund the starting operations to their businesses which now clear millions of dollars in profits each year. Don't let this get to your head; even though it may be possible, you need to know what the heck you're doing in order to succeed this way. A clueless person taking out a loan to start a business out of the blue expecting to make thousands is going to fail miserably without a proper plan or lack of knowledge. Don't figure it out the hard way after losing all your money and you're stuck paying it all back, failure to plan is why most businesses fail in the first place.

So what can I conclude with this statement?

I can say its not completely unrealistic to take advantage of a loan and use it to your personal advantage; however, its up to you to turn it into a profit! I can't sit here and tell you exactly what to do to turn your loan into something beneficial, if it were that easy everyone and their pets would be doing it step by step, unfortunately life isn't that simple unless you're guaranteed to inherit your parents fortune.

Tuff Kid
Watch Me Grow.