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?
I think the same. Mathematically it's one thing but when we take psychology into account it's another.
The logic is: if inflation is at 8% and I get a loan at 4% I am making money, but there are many other factors to take into account, such as risk, that inflation can vary downwards, etc. That's why Kiyosaki's method works for far fewer people than Dave Ramsey's, because being debt free gives you a peace of mind that being in debt does not, and all economic choices are influenced by your psychology.