Nothing is wrong with getting a loan. However, it can become a real problem when one becomes the infamous loan ranger. This is a term that might be best described for someone who likes to borrow money but not return it. With Christmas being very near, the Philippine holiday debt trap is certain (read here). Many people tend to live a life that's debt-driven because they're notoriously loan rangers. I even wrote an article where I discuss how a Merry Christmas can lead to an unhappy New Year.
I'll recall some failed business deals I made back when I was younger. Somebody owed me money and never paid me back until now. Some people have been conned even of millions and have not been paid until now. Maybe, even the best entrepreneur will confess that at one point, they have lost the trust of someone because the person owed them millions and never paid them back. I could recall how banks would seize assets if people couldn't pay. It's because when a person borrows from the bank--they're using the depositor's money. The bank must pay back the person who allowed a bond to be issued. For example, if I buy a bond for SM or Aboitiz, the money must be returned to me in due time. Interest must be paid every quarter for that time period.
There was a joke on ISPUP where three racers competed in the Olympics. The Filipino man outran the Japanese man and the Chinese man. The reason was that the Filipino man owed both of them money and had no intention to pay. It might seem un-Filipino to do so but it was a Filipino production. It highlighted what was wrong with Filipinos and their finances. There's that tendency to borrow money and never return it. Even worse, they haven't paid their debt and they borrow from another person. I believe it's because many Filipinos lack financial literacy--not because they're incapable of learning it. If more Filipinos were financially literate then they wouldn't be doing that!
Nobody wants to be friends with anyone who doesn't keep their word. Sure, friends are more important than money. However, cheating someone of their honestly-earned money is a good sign somebody can't be trusted. One needs to ask one's self if they could still trust someone who didn't return what they borrowed whether it'd be money, equipment, or anything If one can't be trusted with money then how can one be trusted with things more important than money? People who can't be trusted with little can't be trusted with much. That's why the late Lee Kuan Yew refused to let the late Ferdinand E. Marcos Sr. borrow money. LKY was sure that he wouldn't see that money again.
That's why it's important to avoid debts as much as possible. If one must borrow money, one must ask one's self, "Can I really pay for this loan if I get it?" It would also be, "Don't add debt to debt." Smart money habits can be the start. There are times when loans can't be avoided. If one must loan, make sure that it's paid back according to the due date and pay interest according to the due date.
People who aren't smart about loans end up with ridiculous stunts. They would probably waste their time gambling (and horse racing is just one of them), investing in the fishy world of cryptocurrency, investing money in a get-rich-quick scheme, or just any "investment" that's too good to be true. They may find themselves chased by multiple creditors. Maybe, that's why I see a lot of turban-wearing Indians in January. They must be those people searching for those who lent them money. I wanted to eat at an Indian restaurant only to find the parking lot as occupied by motorcycles. When they start asking for help, they're best left alone. Was it worth it becoming the lone ranger because one loved being a loan ranger?
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