You might be struggling with the idea that most people need loans at some time or another. You might even raise some pretty tough arguments why certain people might not, but I assure you it’s true. Most people, if not all, will rely on a loan at some point to see them through a financial goal. It doesn’t matter the position, status or wealth of an individual, people rely on loans and access to credit to further themselves in a world that is structured around finance. 

You may be asking if it’s even possible to use a loan to build wealth. The answer is a resounding yes! While we usually look at loans as being something that can be used to help pay for expenses like fees or rent, loans are also something that can be used to build wealth and in some cases, maybe even get rich. There are several ways individuals can effectively use loans to build wealth that go beyond the typical use of loans. 

The most familiar example of this is borrowing to pay for an advanced degree or your education. The science is undisputed, on average those who earn advanced degrees will earn more over their life time than those who hold no degree at all. And so, borrowing for your education is one way you could use a loan to increase your wealth. Although it takes time, it’s a time tested way to “get rich” from borrowing money.

Maybe you’re looking for more immediate gains. Well, with the right opportunity and a watchful eye, loans can be a useful tool. Wealthy and financially educated individuals use loans all the time to leverage investment opportunities, assuming that the leverage and combined investment is within that individual’s own risk tolerance. For example, let’s say that you’re investing 100,000 with an expected return of 10 percent by the end of the month, giving you 10,000. If you were to invest half your money and borrow the other half at a rate of less than 10 percent, then you could potentially earn more than you would have had you invested your full capital amount. 

So, if you’re thinking that “everyone needs a loan at some point” is an impossible statement, guess again. The truth is, there are many ways to make use of loans in Nigeria-ways that even span beyond the scope of this article.