Home Business & Management Things you don’t know about Debt-2020

Things you don’t know about Debt-2020


Now let us first understand what the debt and leverage is, as the world has made both of them a confusion, let me clear the difference between this with an example.

Let’s assume a person is seeking to buy a house. But for a long time he isn’t able to find one. At last he finally decides to purchase one. So he started short listing house.

The house which he liked and wants to purchase is a little costlier on his pocket but he knew that staying in a rent house is a liability for him but buying a house will become an asset for him.

So for that we need 50,000 bucks wherever he had only 1,000 bucks in his pocket so for this he finally decided to borrow some money from bank. He goes to bank and borrow 60,000 bucks from which he buys a house for 50,000 bucks and spent 10,000 bucks.

Now from the above case study we came to know that all the 60,000 bucks he borrowed is a debt but from that bill of 60,000 bucks, the amount of 50,000 bucks spent on his house was leverage for him and rest 10,000 bucks is naturally remain as debt.

Table of Content

  1. Introduction
  2. Top 5 ways to pay your debt off
  3. Types of debt
  4. Conclusion


Let’s what’s the basic difference between leverage and debt is that money spent on leverage generates your asset while spending in debt creates a liability for you.

Now if we see leverage is a kind of liability but it’s not a liability.

Debt: – It is someone borrows anything from other and agrees to pays a specific amount as interest on that borrows.

Leverage: – It occurs when it is used to buy an asset. In simple words, it refers of getting maximum output from minimum efforts.

Now the most basic and important thing you want to understand in your life is that there’s nothing bad or good its way of doing it correct or wrong. The whole world has take debt but not all debt taker are poor and not too all the debt taker are rich.

And that’s all because of on reason that not all use it wisely. Assume your arrears like an axe, that axe has been used as an instrument for cutting tree and too as per famous proverb said “To put axe on your feet”.

Top 5 ways to pay your debt off: –

1.      List all your arrears

The first thing you got to do is to write down your all the arrears. For example

S. No.123456
Principle Amount479245645654100383001100050
Interest Rate5102051520

Like this I want to write down your all arrears with exact figure, as round off figure always feels bigger and overwhelming. Note down of all these according to your priority, now don’t priorities them by higher interest rate or higher principle amount always priorities them by the amount of pressure they create them on you.

Like in above table the 5th amount is higher and has a higher interest rate too from bank but the 2nd has the lowest amount taken from any relative and he definitely teases you every time he meet you so you need to pay off him 1st as getting relief from stress will automatically get your focus on work more and get too relief from others one by one

2.       Increase your income else of lowering down your arrears

That is the biggest thinking fault in us as we think how to lower down our arrears when we know that they will not be but also we keep trying on this but instead we should keep focus on increasing your income.

Because extra income could be less in monetary terms but it will help you get out very quickly. As earning an additional income gives you self satisfaction. Now there are lot of opportunities available that you can grab by sitting home.

In this era if you type work from jobs you will bundle of jobs available. You can choose whatever you want to but if you don’t want job then you can too have some skills like giving tuition, be a pet sitter, baby sitter etc. And believe me from this you going to earn less then you job but it will play a major role in paying your all arrears. 

3.      Don’t get more credit

This is very crucial as if you don’t lower down your extra credits then you will not able to pay off your all credits. And let me first clear you that there’s difference between getting more credits and lowering your credits. Getting more credits means generating more credits whereas lowering your credits mean decreasing value of a particular credit.

So increase your personal credit only that can you manage without affecting your cash flow much. But before this clear your existing credits first then think of keeping your credits as low as possible.

Let me share a very useful method that will keep you away from craving for unwanted things; what you need to do is that when you crave for anything you want, don’t buy it immediately, just add i to your wish list and wait for sometime around for 30-40 minutes and if you still think that it is wise decision for you then you must buy.

This process will help you keeping away from unwanted things you were going to buy.

4.      Prepare budget

Now it’s time to get some budget prepared by you. Where we will mention all the expenses we are going to done from that particular income. Budget is like a plan of how and where you are going to spend your money. Let’s assume that a person arun earns 1,00,000 bucks per month and let’s see how his budget will look alike.

10,000_Grocery                                                                                                                       20,000 _House_Emi                                                                                                                      30,000_car_EMI                                                                                                                                1000,4000,10000 bucks to Mona,gopal, manoj


10,000 bucks on miscellaneous expenses

This table I just an assumption of what a table look like, so you can adjust and modify it as per your needs and requirements. Now I hope that you won’t be able to face any issue regarding a budget.

5.      Sell unwanted items

Now from your debts there must be many unwanted items you have been storing in your house or businesses so got to sell all the stuff which is unwanted and are not required by you. This will help you in many ways for example: –

a.      Freeing up your space

When you will seek to get the not required items out you will find that now your house is looking bigger and huge.

b.     Generating money

Now this method will generate you an additional income by sitting in home as today there are lot of websites which in like a place where a 2nd hand seller meet someone who want to buy 2nd hand things. As they are cheaper and sometime they are like new products.

c.      Get rid of negativity

This is the most relief giving, as getting unused things out of your increase positivity in house as you get frustrate by watching that unused and waste material again and again. So it indirectly helps you lowering stress.

d.     Lot of space for new things

The free space helps you to get new items in your house. The space that gets free can be used to be kept other valuable items on that spot.

So, can you answer me the only think that make a poor rich, millionaire a billionaire, billionaire a multi-billionaire?

I know that you must be thinking of time, luck, money etc.

But according to them the only thing which keep them multiplying them is LEVERAGE, yeah it’s true it help them growing them.

A little more thing I want to tell you are debt is also of 2 types: –

  1. Good Debt
  2. Bad Debt

Good debt is when you use you it wisely and bad debt is when you don’t just use your debt wisely its simple, but I know you must be wondering how foolish this is but you expect more I earlier told you that it’s not the debt which is good or bad it’s the way of using it makes it good or bad so ultimately it’s the borrower who is good or bad.

CONGRATS now you are ready to apply this in your own life.


So at last I want to congratulate you, if you don’t have any debt and you can make this basis spread to those who want to pay off credits and if you have any arrears then now Are well aware for how to pay off them. All the steps I mentioned are very easy it’s just you who have to take a little pain to do something for long term beneficial for your life.

The steps I told are the basis you may modify and change them according to your priority and needs. I am no one to teach you I just shared my own personal experience about debt and leverage. Because when I wanted to know about them there was nothing available on Google which can make me understand I simple language.

As of now I am expecting that you will not be same as you were before reading this blog. You will use your axe for cutting tree but not for cut your own leg.

Below is the link through which i have gained a lot, you wanna check more on this topic:-











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