Do not create liability

Personal Growth

The availability of easy credit is the biggest hurdle of wealth creation for many people. Financial institutions are out in the market to give you credit on almost everything. The trend is to spend and then earn. This leads to the creation of liabilities and that in turn makes life worse. That is why it is better to avoid the burden of liabilities at first hand to make life comfortable and easy going.

Commonly accepted, the best practice of wealth creation is to earn, save and then spend. Before spending, setting aside some portion of money towards saving from your earning is the surest way to create wealth. However, most of the people earn, spend and then save. Only after paying everybody else, if there is something left, they save.

On the contrary, the trend to spend and then earn is a complete reverse practice. It barely left any scope for savings. People generally spend much before they earn. For them, wealth creation seems distant dreams. By following this trend they create liabilities instead of assets.

To ensure the sale of their product, the loan provider attracts the eyeball of an impulse buyer in many ways. No processing fee, minimum interest, zero down payments and of the same are the keyword of their promotional campaign. People also tend to indulge in using credit facilities due to social status.

To sum up, do not create liabilities if you can avoid else you will have the extra duel burden on your future earnings while managing your routine expenses at the same time. One of them is the actual installment of the amount for the product, and the other one is the interest for using the credit facilities. And this will make your coming month budget very difficult to manage. On the contrary, the loan provider will not only get profit for their sale but also earn the interest for providing credit facilities. They will be in double benefit. Hence do not create liabilities, you are meant to create assets to make your life enriching.