Today I want to share with you the all obvious sings that present themselves in advance before you get deep in financial mess. If you can be able to tell you are headed for a financial mess, it would be easier and cheaper to correct the problem before it escalates. The signs of your future financial mess will be found in the following:
Borrow to Pay an Old Debt: Shrewd creditors like banks know it all. Borrow from me, I pay all your old debts and still retain enough cash in your pockets to spend as you wish right now. It’s called debts restructuring. If you ever find yourself attracted to these debts restructuring, then you are actually headed to intensive care unit as far as your personal finances are concerned. It works like this: You have a debt of $120,000 to pay in twelve months, each month you are repaying 10,000. And because very little is left to you to pay for basic essentials like food and rent, you approach another creditor to restructure your loan. This new creditor agrees to give you a loan of $180,000 repayable in 3 years at the rate of $5,000 per month. From the $180,000, they will use $120,000 to pay your old debts and the balance of $60,000 will be given to you to spend as you wish right now. So, instead of you paying $10,000 per month you will be paying $5,000 per month plus an additional $60,000 to spend as you wish? That does seem like an attractive arrangement and indeed it is as it carries with it many victims including CEOs of your favorite companies. Again, if you ever find yourself attracted to this kind of debts restructuring, then you are actually headed to a deep financial mess.
Head here for the continuation of this story: How to Tell If You Are Headed For a Financial Mess
MyPage is designed to help beginners and average readers make money online.