Borrowing Money to Consume Versus Borrowing it to Invest

This article is written in response to some of the web visitors’ comments posted on our website. Being in Real Estate business, we pay attention to financial trends in our market and how consumers react to various changing markets. Here is what caught our attention this time.

Our business is not just about making profit; it is also about helping others reach their own financial goals.  In our societies, very often people borrow money to buy goods such as cars, boats, and other things for their personal use.  However, some other folks would borrow money and invest it in assets that would generate some sort of income or be sold for a profit later.  In both cases, consumers have developed the habit of spending money they don’t have, and for most of us, spending money before earning it has become a normal way of life.  From an entrepreneurship perspective, one might want to slightly modify this mindset and start using credit card or any other loans in a more productive manner.  The following might be an eye opening thought.

At some point in the past, some web surfers reached out to us on this site and left interesting comments about how most Americans get deep into credit card debts around the holiday or vacation time, but they didn’t leave their names.  For this reason, they won’t be individually mentioned herein, but we want to seize this opportunity to collectively thank all of those who contacted us regarding credit card debts and other financial issues that generally affect most consumers in the USA.  This problem has gotten even worse in 2020 and 2021, as people were trying to survive the Corona Virus economic crisis.  For this reason, we are going to look at credit card debts and any loans from the investors’ perspective, as opposed to consumers’ standpoint.

The way our blog readers respond to the information they find on our website is important to us, but the ideas they bring to us through their comments and feedback are even more important and valuable.  As stated earlier, some of them showed some concerns about credit cards.  They actually argued that credit card companies are aware of consumers’ spending behaviors when comes the time for celebrating holidays or planning vacation trips. They also stated that these companies usually take advantage of people’s spending habits to promote lower or zero interest rate credit cards for a predetermined period of time.  In their discussion, they went on asserting that consumers often find this to be a great opportunity for consolidating debts at lower rates.  While this practice seems to be beneficial to consumers, it can also turn out to be a financial trap for some people.

There is nothing wrong about consolidating debts when credit card companies offer zero or lower interest rates.  It is actually a great marketing strategy, and it can be a chance for people to get out of debts faster, if they consolidate their debts wisely and repay them before the promotion period ends.

Unfortunately, not everybody manages to repay their consolidated debts during that specific period. Taking the economic crisis caused by COVID 19 in consideration, the sweet and better reality is that some people would be more likely to use those credit cards to buy household commodities or pay for vacation trips.  When those funds are consumed this way, it is gone, and if for some reasons the borrowers fail to repay during the promotional period, it gets more complicated. The interest rates will go up to the point where it becomes almost impossible to pay off the balance in a reasonable time.  The worst part is that credit card debts will keep increasing, and borrowers might get trapped in huge debts for years.

In contrast, as mentioned earlier, when people look at a credit card from the entrepreneurship perspective, they would think of it like a business loans and invest the money in assets that would generate income for them.  In this situation, when those assets become sources of income and turn into a successful business, it would become easier for borrowers to repay their debts on time and consequently take advantage of the zero and lower interest rates.  This is because the money was invested and not simply consumed.

Finally, with all that said, here is the good news.  If you are interested in learning how to invest in real estate business, we have great referral programs for beginners.  If you are serious about taking online real estate coaching classes, we can help and refer you to one of our Real Estate Coaching Affiliates.

 For enrollment information, please email us at the following email address:
By: Germaine Kapena


Home Renovation (A Way to Cope with Social Distancing and Business Limitations during Corona Virus Era)

The way we do business nowadays has significantly changed due to the spread of Corona virus pandemic.  To cope with those changes, working from home has become one of the best ways to practice social distancing and keep running businesses from the comfort of your own house.  For the reasons explained below, working from home hasn’t been easy for everyone.

For most of us, a house we live in is not just a home anymore; it has now been turned into a workplace, as we strive to survive the pandemic.  While this sounds to be a great solution for working remotely, not every house is built to provide a good work environment.

Therefore, renovating your house is a great way to solve this issue.  You can turn it into a place that still feels like home, but at the same time, offers you a work environment that allows you to be more productive working from home.  Actually, customizing your home office based on your own needs will be practical and more likely to make your time working from home much more prolific and enjoyable.

However, every house is not customizable in the manner mentioned above.  Some houses will be easier to rehab and modify to your satisfaction, while others won’t.  Your performance working or running a business from home can be considerably affected by the way your work space is set up. 

With all these said, if working from home is becoming overwhelming and your house doesn’t fit your needs anymore, maybe it is time to make some changes and look at other options available to you.  Some of those options would be renovating your house accordingly, selling it, or buying a new one.  Unfortunately, renovating a house (or buying a new one) is not an easy decision, especially during this pandemic season. 

The bottom line is that if your house is damaged, outdated, and most importantly, if it is not functional in a way that fits your new life style while working from home, you are on the right site.  At GK’s Real Estate Dealers, we are committed to helping people in such situations.  We buy houses in bad conditions (on “As-is” basis), rehab, and resell them.  To help you adapt to the new way of life during this pandemic time, we do our best to renovate houses and give them a cozy modern touch, and whenever possible, we’ll design a professional home office space.   

For more information about selling a house or buying one, please call us at 1(800) 731- 9110, or email us at:  

Germaine Kapena