There are mainly two kinds of debt: one becomes a burden, while the other becomes a seed for growth.
A loan taken only for entertainment, show-off, an expensive car, or an unnecessarily luxurious lifestyle does not increase your income. It simply adds a monthly instalment to your life. You may enjoy the purchase today, but you must sacrifice a part of your future income every month.
In simple words, when we borrow for unnecessary luxury, we sell our future life in small pieces called EMIs.
A person driving a costly car on loan may actually be financially poorer than someone walking on foot without debt. Real prosperity is not what we display; it is the financial freedom and peace of mind we possess.
However, every loan is not harmful. A loan taken for a shop, business, commercial vehicle, education, machinery, or another income-generating asset can become a seed. If properly planned and managed, it can produce income, create employment, and help us grow. A reasonably affordable home loan may also create a valuable long-term asset and provide security to the family.
I have also taken loans in my life, but only where the borrowed money could be converted into earnings or a productive asset. My belief is simple:
Do not borrow merely to look rich; borrow only when it can help you become financially stronger.
Before signing any loan agreement, ask yourself one honest question:
“Will this loan help me earn and grow, or will it slowly eat my income, freedom, and peace?”
If the loan can generate more value than its interest and instalments, it may help you. But if it is meant only to impress others, think carefully—it may own you long before you own the asset.
Use debt as a tool for growth, not as a ticket to temporary luxury.
— Arunesh Singh Bhadauria