61–70 of 125 posts
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Debt is a lever, in itself it's neither good nor bad. If I have a $10m net worth, I might want to lend someone $1m for a year on which they will pay me 5% interest per year. If that person can turn that million into one and a half million, what's the problem?
Not when it's only issued by a monopoly.
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Not when it's only issued by a monopoly.
Who says only banks can make loans?
How I hate people like this. "Building assets and letting them work for you". For this you can read: "be the footsoldier for the banks who have a monopoly on money creation. Ask the bank to create money for you then use this to join the land monopolists. Then let those stupid little people who are actually creating wealth rent it back from you. This way you get a stream of their labour." For assets read "property". P…
A billion dollars is not very much. There are ~150M Americans working in the US, if something helps every one of them make $7, then over a billion dollars has been created.
Microsoft has enabled practically every person in a developed nation to do their job more efficiently. This is worth far, far more than a billion dollars.
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Doesn't this all depend on how you use that specific debt? If you use the above example, if I can generate $500k each year using $1m in debt, how is perpetually serving the interest expense on that debt bad then? Use it well, you can create additional profits. Use it poorly, you'll end up with nothing (or even lose capital). Maybe you mean that the lever effect shouldn't exist, so that it's a zero sum game?
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> do you think the majority of rich people prepared for "getting rich" by reading hundreds of motivational and self-help books? No, I don't. But you know what they do have? They've grown up in a household and a culture that teaches them thousands of small lessons in being and staying rich. They don't have to read about it, because their parents and friends and lawyers and accountants and country club associates have…
According to The Millionaire Next Door; I am not sure this is true. Many children of 'rich people' have their lifestyle funded by their parents and only learn how to spend beyond their means; which does not accumulate them wealth in the long-term.
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Who says only banks can make loans?
That's the thing, they don't loan the money, they create it, banks haven't functioned the way they're popularly imagined to function for centuries. And it's so sad that this false image is the moral basis for banks going after borrowers assets. The bank doesn't lend you someone else's money, it creates the money(no effort) and you have to work and put up real collateral to pay it back. By G-d we should all be working…
Err, there most certainly is an effort assessing credit risk and dealing with the fallout when someone defaults.
The problem with all these "how to get rich" books is that they're full of anecdotes, quotations, fictional stories, motivational bullshit etc. which make you feel good while reading them, but as soon as you put the book back on the shelf, it's all gone. It's just a temporary boost of energy and motivation, because reading requires almost no effort and more often that not it's just another way of procrastination. Ser…
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Also see social credit theory for the idea that the value of goods produced by workers is always less than their wages: http://www.socred.org/ Plus banks have a monopoly on money creation and can create it with zero cost, ramping up land prices and soaking up all productivity gains into land. All the rentier need do is kick back and wait for the state to add value so they can charge more rent. Henry George knew it bu…
[1] https://libcom.org/files/__Debt__The_First_5_000_Years.pdf
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Who says only banks can make loans?
Anyone can make loans. However, banks borrow newly created money from the ECB or FED at an extremely low rate. If you borrow money at 2% from a bank then they are getting it at 0.1%. The spread - that 1.9% - is their profit.
No it's not. There are plenty of costs involved in issuing loans that will eat into that 1.9%.
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Debt is a lever, in itself it's neither good nor bad. If I have a $10m net worth, I might want to lend someone $1m for a year on which they will pay me 5% interest per year. If that person can turn that million into one and a half million, what's the problem?
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