Debt inevitably incurs costs: the interest and the usage fee. Borrowing means using someone else’s property as if it were my own. When the purpose of borrowing is achieved, or when the agreed time to return it arrives, it is returned to another person’s possession, and the borrowing cost is no longer incurred. Costs also serve as the basis for production and are the consideration for almost all debts, regardless of the borrowing purpose. The frightening aspect of debt is that it incurs costs and requires repayment of the principal. Originally, the principal was not mine. Thus, spending with other people’s money exposes you to significant risks, especially when you spend on perishable consumption that disappears after use. If you spend someone else’s money without differentiating between production costs and costs for extinction, you are on the fastest path to destruction. Therefore, luxury can ruin even the rich. - Joseph’s “just my thoughts”
We often overlook the financial concept of “opportunity costs” because there is no immediate cash expenditure involved. Typically, we invest more time and effort in purchasing cheaper products. In contrast, wealthy individuals do not have to exert as much effort as those with fewer financial resources. When we factor in opportunity costs, we often find ourselves spending a similar amount of money on the same items, regardless of wealth status. For instance, if Bill Gates picks up a dollar that someone has dropped, he actually detracts from his financial standing due to the opportunity costs associated with the value of his labor. In this regard, he might save more money by choosing to rest instead of working. Ultimately, opportunity costs are the hidden expenses that can keep us in financial distress in the real world. - Joseph’s “just my thoughts”