The concept of easy or tough life with loans

Many times in life we feel to borrow money to achieve some of the goals of life.In traditional educational system the loan is portrayed as the curse which one should always try to stay from. But there is another group in society which has the contradictory belief in loans.

Cutting up the credit cards is the good advice for some of the individuals which is rationally true for those who are do not have knack to control their spending and fall the victim of credit take over Dubai. So it can be easily made out that the credit card cut is for the people who are shopaholic which is a good advice.

Debt: Good versus Bad

On the basis of the finance expert view the student loan is the worst of all, but this is not the case with the vocational studies like doctors or engineers. But before going for the loan a student should think to get smarter because of the competition and along with it they need a lecture on the self-assessment.

Asset versus liability on loan takeover Dubai

To understand the debt let us take an example that an individual wants to buy a house so if he goes for it with the help of debt or not still it is a liability because he has to pay tax, insurance and has to take care after the depreciating value of the house. On the other hand if this individual wants convert the house into an asset then he has to lift it up on rent which means that it is giving the money but not taking.

There are six words that are basics of financial education and intelligence. These words are income, asset, expense, liability and the two are cash flow. So if the cash flow is out side offthe pocket then object is liability and of the cash flow is into the direction of pocket then it is an asset.

So if a property gives so much rent that it covers the loan EMI then the property despite having loan on itself is considered to be an asset but not liability because it is putting the money into the pocket.

So it can be understood that a good debt is something that results into the cash low income while the bad debt is which results into the cash flow out come to bank.

So next time no matter on what you are under the debt like car, house or boat, but all it matters is the cash flow. Good debt puts money in your pocket and bad debt takes money off your pocket.