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 don't understand what is the logic behind this? The basic mathematics is that you have to invest in any asset which will give you a better interest rate than what you are paying for your loan or borrowing only then it can be said that it's profitable otherwise you are just struggling to pay interest, second thing here will be the cash flow loan interest generally you have to pay in cash while returns on investment you might not get in cash those will be reinvested. So this is financially wrong, also in times of high inflation you will find interest rates are also pretty exorbitant so technically makes no sense to do this.