Well you already know which book I’m talking about, let’s keep the title of the book away and understand why Return on Debt (ROD) plays an important role in financial success.
Everybody talks about making money from money and nobody talks about making money with an empty pocket. Yeah, banks do an eligibility check before giving you a loan and also look into multiple things like credit score, balance etc. However there are instances where government lends money to entrepreneurs with empty pocket.
Imagine the price of a property is $1 million and a 30 year loan with interest can cost the same property $3 million. However if government makes right decisions and development peaks, then the same property might fetch $5 million. 5 minus 3 is 2 and someone made $2 million by borrowing loan. Passive Income broh !!! Well it is risky and also there’s inflation. But at the end of the day the tenants paid for the owner’s mortgage (rent from tenants) and the owner made $2 million from the money he did not have.
Well I don’t have a degree in finance and that’s the disclaimer, however I’m not stupid either. The loan ends in 30 years but the property is forever as long as there’s no natural calamities or something worse. Something worse can also mean rate of interest.
One response to “Return on Debt isn’t mentioned in that book.”
This is what I found out in your post
Great insights on the importance of Return on Debt (ROD) in financial success. It’s interesting to see how borrowing money can lead to passive income and help build wealth. Thanks for sharing!