tycho wrote:Intelligentsia wrote:Quote:People can get rich either through careful borrowing or by saving and continually investing.
Now there I agree.
The argument can't be true. If saving is turned to investment without innovation and technological advancement then wealth can't be created or increased. In fact, the economy will stagnate.
And if there's to be growth in surpluses then there must be quantum leaps in capital infusion, meaning borrowing.
People can get rich only if they maintain an optimum level that maintains a balance of payment where credit is greater than zero.
@tycho... you are missing the point by several galaxies.
The point of departure is not about what or the process the wealth/svings/capital will be transformed (i.e whether innovation or through tech.) but rather the SOURCE of that wealth: ergo, to borrow or to build up capital from savings?
Either can do. I know many companies/ indivs who have grown organically and are very debt-shy.
Recall Warren Buffet, personal wealth estimated at $60B, hardly borrowed and yet has the wherewithal to singlehandedly fund Kenya's Free Primary Education for a financial year.
Others who have used debt prudently have also experienced quantum leaps in all their financial parameters - top line, bottom line, ROE,ROA, market share, cost-to-income ratio, the works.
For @ Impunity, this Tip No 6 from 10 Ways To Get Rich will resonate with you:
6. Limit What You Borrow: Living on credit cards and loans won't make you rich. Warren Buffett has never borrowed a significant amount -- not to invest, not for a mortgage. He has gotten many heart-rendering letters from people who thought their borrowing was manageable but became overwhelmed by debt. His advice: Negotiate with creditors to pay what you can. Then, when you're debt-free, work on saving some money that you can use to invest.http://www.warrenbuffett...tt-10-ways-to-get-rich/