Post
Topic
Board Economics
Re: Taking loan during high inflation?
by
Vaculin
on 18/05/2022, 21:32:38 UTC
Today I had a meeting with a friend of mine who teaches economics at university.
He believes when the inflation rate rises that's profitable to take a loan even with high interest to buy other assets such as gold, bitcoin, and even real estate. On one side of this theory, we usually suggest people never invest money that they can't afford to lose and don't invest the money that does not belong to them for many reasons. These are golden tips and useful in any market.
But the question is what if you do not own enough money for investing? can you take a loan and invest?
Because if you look deeply into charts of inflation rates in most the countries you can easily understand taking loans even with high interests could be useful and profitable.
Personally, I don't suggest doing this because using other people's money will put me under stress and this can have negative effects on my decisions. What do you think?
IMHO, taking loans for such a volatile investment do not guarantee fixed profits, the reason why we should always invest using our extra income. However, if you can manage the risks from doing it, then go, but if you want to avoid troubles in the future, then always invest on the amount you can afford to lose. The fact is, no matter how good an investment is, as long as you don't hold its future, then you can never be at peace thinking that you'll maybe lose in the end, although investment has always its own risks.