Top 5 Reasons why you should not be afraid of Debt

Session of Mr. Aya Laraya
Taguig, Philippines - Last September 17, I attended the 4th session of Mr. Aya Laraya about #Money4LifeChallenge organized by Sun Life Philippines. It’s somewhat a refreshing topic for me as I already started my financial portfolio last 2013 and this session made me realize a bunch of things about the true nature of "debt".

During the session, Aya stressed that "debt" or "utang" is only a tool and should be use properly to maximize its potential. To sum up the discussion, i will give you five reasons why you should not be afraid of debt:

1.) It will help our Economy - The Philippines is the least country that is affected during the recession in America - this is the only positive thing that happens in our country that time. The reason behind the sudden immunity of the Philippines about this global issue is because majority of the Filipino people/business are afraid to risk. We are afraid to use tools that will help us grow our current assets. According to Aya, to be able to grow a business you should be willing to Borrow money, Find Partners, or to list it in PSE.

Aya said you should always know your "WHY" in getting a debt. Your credit card is not a good emergency fund;
2.) It will help you about your priorities in life - During the session, we discuss about the difference about "Good debt" versus "Bad debt". Aya said you should always know your "WHY" in getting a debt. Your credit card is not a good emergency fund; you should know how to manage credit that is favorable on your side. If it’s generating revenue then it’s a good debt.

3.) It will help you prepare on your future - Some of the good debt Aya mention are house and cars. The bank credit rating of the Philippine is not that high and you take advantage of this moment by acquiring a long term investment such as house.

The attendees of 4th session with Mr. Aya Laraya
4.) Faster transaction - They say that using credit card is very addicting specially for those who can't control it - it is true that it’s very easy to use credit card versus giving out real money to purchase things because its less painful. However, you can take advantage of this tool by making sure you have the money in your bank account to pay the total sum payable of all the wise transaction at the end of the month - less hassle plus you can now avail their free Starbucks promo.

5.) It will help you to be a good Steward - Same with Aya, I believe that there is no exact formula, like 70-20-10, for each and every individual. In life, we are given an endless opportunity and it’s all about to us how to grow it. If there is one thing I like about the financial literacy is you are your own financial manager and you are accountable to every peso that are coming out from your pocket.

Written by : Tony Yson
Edited by : Axl Guinto

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