How To Borrow Your Way to Riches…

Josiah Nang-Bayi, MD
6 Min Read

I remember back in medical school, when I was blindly driven by a youthful naivety and inexperienced passion in my quest to become rich. This was after I attempted raising funds for my first Smile-Makers rural child outreach program in 2014. I had written several letters to institutions and individuals seeking to raise GHc 4,000 to pursue what I considered a noble quest but ended up with just GHc 500 and several polite rejections from over fifteen institutions.

In the years that followed, I realised that if I was to pursue this calling, and expand on the project, I needed to build my own wealth empire, then I can use my money for what I believe in, instead of expecting generous handouts from other people (everyone have their priorities).

Without experience and very little research I credulously ventured into the business world. Long story cut short, I ended up borrowing so much and throwing it all away into very unsustainable and unwise ventures. Before I could realise the huge mistakes made, I was in a whole so deep I didn’t know how to come out. That was when I really took the pains to commit myself to a lifelong learning to equip myself with the skills, knowledge and wisdom of the wealthiest people in the world.

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Eventually that pursuit of knowledge led to the scripting of my first published book The Money Farm (Get a copy here)

Here is what I have come to learn about borrowing. If you have other alternatives, and can, avoid it entirely. But if you must borrow, make sure it is calculated and for a wise purpose. Let me explain.

Calculated borrowing means that you have considered the duration of the loan, your current earning capacity and income flow and have the surety that you can repay the amount borrowed with the interest within the agreed time frame; without putting a further strain on yourself that would push you to borrow even more.

What is a wise purpose? The wisest purpose for which one can borrow money, is to invest in a well-researched business idea, that has the features of sustainability, profitability and can generate the funds to repay the loan within the stipulated time. Sometimes, the idea may be sustainable and profitable in the long term but would not generate enough profit within the stipulated time. In that case you should have an alternative assured periodic income source that can take care of the loan while you work on building your business. Borrowing money for consumption on a purpose that either has little or no promise of sustainable profitability or cannot generate funds to get you out of that debt is never advised. Avoid it by all means! Borrow to acquire sustainable assets, if you must, but avoid borrowing to acquire liabilities and fix avoidable expenses.

This expatiation is summarized in what is term GOOD DEBT VS BAD DEBT. A good debt is one that is well calculated and taken for a wise purpose. An uncalculated debt borrowed for a non-profitable purpose is a bad debt. Good debts can be a means of catapulting your growth and wealth building process; a bad debt on the other hand would send you falling into a deep pit of poverty you may never survive.

If today, as you are reading this article, you have already found yourself in a pit of debts that seems escapable, it is not too late. You can start your journey to redemption by reading George S. Clason’s The Richest Man In Babylon, and my book The Money Farm; then make sure to follow the money farm academy blog continuously to help you build and maintain the right mindset to achieve your goal.

As the money lender in The Richest Man In Babylon once said, “Youth is ambitious. Youth would take short cuts to wealth and the desirable things for which it stands. To secure wealth quickly youth often borrow unwisely. Youth, never having had experience, cannot realize that hopeless debt is like a deep pit into which one may descend quickly and where one may struggle vainly for many days. It is a pit of sorrow and regrets where the brightness of the sun is overcast and night is made unhappy by restless sleeping. Yet, I do not discourage borrowing gold. I encourage it. I recommend it if it be for a wise purpose. I myself made my first real success as a merchant with borrowed gold.”

See you in the next post!

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Josiah Nang-Bayi, MD is a medical doctor by profession, an author, a financial literacy and digital assets enthusiast, an entrepreneur and a growing philanthropist.
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