To utang or not to utang?

Live a debt-free life.


You've probably heard it before, a ubiquitous financial freedom related goal.

When I was at my 20's, I acquired millions of pesos of debt. My first debt was my mother's hospitalisation when she was diagnosed with cancer (she didn't have insurance), while I was still paying for those debts I took another loan, to buy a house. I lived a frugal life in my early 20's because I had debt. Unlike many girls whose dream is to be married before they hit 30, my goal was to be debt-free on my 30th birthday. I set aside lots of other goals, like to travel the world which could have been easy since I used to work for an airline, flight tickets was almost free. But I had my priorities, so I sucked it up, set aside a significant percentage of my salary to pay my debts as soon as I can.


At 27, I paid most of my debt, it was time for me to travel the world since then I've been to over 20 countries paying full-priced flight tickets! At 30, my dream came true I was totally debt-free. I moved to a new country, got married and started studying technical analysis and traded with the savings I got left from my time of being an OFW.


The thing is that not all debt is created equal. Just last year I took another million of pesos debt to my name. However, this time, it is a GOOD DEBT. Why you say, because this debt was for an investment, I bought a rental property instead of putting my savings into it, I took a bank loan for 60% of the property value, BUT I don't pay for this loan, my tenant does.


Some traders take a loan to add to their capital, to some this can be a GOOD DEBT, too many its just plain BAD, BAD DEBT. If you are just starting and you haven't got an edge yet, please do not even consider this. Some seasoned trader manage OPM (Other People's Money), which in a way (depending on their agreements) is a form of loan, you borrow capital from other people, and you return it with interest, this is OK because those traders have the experience, the system, the psych and years of proven record of their success as a trader.


As a new trader, acquiring debt to add to your capital is a NO-NO, work with what you have now, only trade with money that you can afford to lose.

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