Usually, people start out their profession at the bottom then work their way up the career ladder. Since it takes some time before your company recognizes your value as a member of the team, you will have to make do with your current salary.
Fortunately, there are ways you can increase your earning potential. But due to a limited salary, you’ll first have to borrow money. Borrowing money may seem like a bad idea as it contributes to your liabilities. But if used the right way, the money you borrow can ultimately increase your overall salary.
Here are some ways you can boost your earning potential by borrowing money.
Continue Your Education
In the professional world, more education usually means more money.
People with master’s degree are often on the fast track up the career ladder and that’s because they are considered to be more knowledgeable about the field. And so, to avoid getting left behind, it’s a good idea to continue your education.
Borrowing funds for your graduate or professional school can be a huge investment but it will help you get higher positions at work and increase your earning potential.
Start A Business
Starting a business is perhaps the best way to boost your earning potential through borrowed money. However, it will require hard work and commitment. If you have a good credit score, it will be easy to get a loan to start your business.
Alternatively, you can use your assets like your car as collateral to obtain a title loan. Even a small business can help significantly increase your earning potential. And if your business flourishes and becomes successful, you can even stop working completely and rely on passive income instead.
Taking on debt to pay for an investment can be risky but it can significantly increase your earning potential if the investment works out.
The goal is to have your borrowing costs increase at a lower rate than your investment. This way, you’re making money out of the investment and you’re still able to pay back the loan. Thus, if you borrow money to invest, make sure that the potential returns of the investment will cover the cost of the loan including interest rates.
Also, keep in mind that your investment’s value may fluctuate. Consider this before borrowing money to invest.
Where Can You Borrow Money?
Now that you know that you can increase your earning potential by borrowing money, you should also know that there are different ways you can get the funds.
Banks offer different types of loans for different purposes but bank loans are best for starting out a business.
Generally, banks offer title loans but they take your credit score into consideration as well.
Margin loans are typically for investing and can be very risky. The investment firm pays for half of your investment then holds your securities such as stocks and bonds as collateral.
A successful investment magnifies your returns but a failed one magnifies your losses as well.
Obtaining funds from government-backed loans can be a long, tedious process but it’s useful for those who are struggling to qualify for bank loans.
There are many different kinds of government-backed loans, depending on your purpose. For instance, Small Business Administration (SBA) programs help small businesses obtain a loan and federal student loans help finance the education of students.
Not everyone is willing to borrow money to increase their earning potential because of its uncertainty. Although it can be risky, borrowing money to boost your earning potential will ultimately benefit you and provide a breathing room financially.