The best financial decision I've ever made was using loan capital to invest in a dormitory business. While taking out a loan was a huge risk for me, I had come to understand that a productive asset that could generate income was infinitely better than accumulating a pile of unproductive liabilities. Now, it’s definitely turned into one of my most rewarding investments.
Today I am the owner of my own dormitory business, which currently a house eight tenants – all students!
Monthly, their rent goes to pay off my loan, the expenses associated with upkeep, and the remaining amounts is set aside for my other future investments. With every month’s income I am reminded of why taking calculated risks is a great move. Of course opening this business took a lot of financial investment on my behalf, and there were numerous expenses along the way – building/preparing the space, buying furniture, and ensuring it was safe for students. There were many times that I doubted if I would ever even find enough occupants.
Yet, with a lot of patience, Hard work and through God's providence it’s all working perfectly now.
The lesson here that borrowing, even in the form of loan capital, doesn’t have to be an exclusively evil endeavor when it's a tool for building – not destroying. Provided a wise choice is made as to where that capital will be invested; adequate money management skills and strategic budgeting to ensure your income from the investment is sufficient to cover loan repayment as well as other financial needs. And with the 8 current students renting rooms this means there's plenty to spare, not only covering the costs of repayment, upkeep but hopefully in the not too distant future I will expand to buy and manage multiple other residential and commercial rentals and grow my business to passive income levels.
This one loan was my first brick, and hopefully, it will form the foundation of a much bigger wall! In hindsight, I have definitely got no regrets for using loan capital to kick start this dormitory business. I’ve learnt to be courageous, disciplined, and plan for the long-haul to reach financial freedom.
It may still be long way, but I am on my path of becoming a homeowner of other residential and commercial properties and building passive streams of income as security for my family's future.
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