“We use debt sparingly and, when we do borrow, we attempt to structure our loans on a long-term fixed-rate basis. We will reject interesting opportunities rather than over-leverage our balance sheet. This conservatism has penalized our results but it is the only behavior that leaves us comfortable, considering our fiduciary obligations to policyholders, lenders and the many equity holders who have committed unusually large portions of their net worth to our care.”

- Warren Buffet, Billionaire Chairman of Berkshire Hathaway, Inc

I have been hearing the debate about good debt and bad debt for a long time. Several gurus have been talking about how good debt can make you rich and make you a billionaire, etc, etc.  Some may even propagate that without using debt, you cannot get rich, I completely disagree with this. The fact is, debt is a dangerous territory for anybody. No matter how experienced you are as an entrepreneur or as a money manager, debt is like walking on thin ice. I doubt if anybody can be completely comfortable with debt.

The reason I say debt is dangerous territory is because there are so many things that are not under your control, your business sales could suddenly get eaten away by new competitors, market needs could change, the real estate industry could collapse, your tenants could go bust and you may need to pay up the entire mortgage from your pocket.

I have been hearing some famous gurus talking about using debt to buy real estate and to keep leveraging that piece of property to buy more and more real estate. This is so dangerous and things can go wrong so easily. I strongly recommend against this. I have heard way too many stories about real estate deals going southwards and real estate entrepreneurs filing for bankruptcy because they over-leveraged their properties.

Gurus have been telling people from time to time that good debt is debt that puts money in your pocket and bad debt is debt that takes money out of your pocket. If you are using debt to buy a business, that is good debt, if you are using debt to buy luxuries that is bad debt. But the fact of the matter is, if you borrow money to start a business, how could you tell if it is going to put money in your pocket? I know most entrepreneurs are optimistic and have high levels of self-confidence, but the fact is several things are not under your control and you could be placing your entire financial life in jeopardy by taking a loan to start a business or even buy a property for that matter.

The next obvious question would be, how then should I start a business or buy an investment property when I don’t have any money in my bank account? You have a few options:

#1 Work hard, work over-time, work additional hours, get a second job, do some freelance work, sell something (could be a product or a service), save up some money and then start a business with part of that money.

#2  Partner with someone who already has the money and give him part of the earnings of the business. This way, you have part ownership in the business for your time and expertise while your partner(s) have ownership in the business for the money they have brought to the table. This could be a win-win situation for both of you.

When it comes to debt, the question you need to ask yourself is, is it worth it? To me, debt is just not worth it. I’d rather have no debt and sleep well at night rather than have a mansion with 100 million dollars in debt riding on it. If I need a mansion I will work hard, save up for it and then enjoy the fruits of that hard work.

Debt is too tempting and too dangerous a road to travel. I say tempting, because it is the easiest thing to do, you want a house – hit the bank and fill out an application, you want a car – hit the bank and fill out another application, you want money to start a business  – hit the bank and fill out an SBA application.

There are so many people in their 50s and 60s with loads of debt. It has always been that way for them, they have always had debt. They have never felt the lightness of not having debt. If that is you, then it’s time to change. Remember, it’s never too late to change.

“The financial calculus that Charlie and I employ would never permit our trading a good night’s sleep for a shot at a few extra percentage points of return. I’ve never believed in risking what my family and friends have and need in order to pursue what they don’t have and don’t need.”

- Warren Buffet, Billionaire Chairman of Berkshire Hathaway, Inc

I know a lot of people may have contrasting views and beliefs regarding debt. But this is my view and my belief – some of you may agree and some of you may dis-agree.

Let us know what you think in the comments section below.

About the author

Vinil Ramdev is an entrepreneur, speaker and author of several ebooks. He is founder of StartUpGrowthExpert.com – An Online Magazine For Entrepreneurs who want to start and grow extraordinary businesses.

Image: Grant Cochrane / FreeDigitalPhotos.net

Recently, someone emailed me about recycling electronic products. I do believe in conserving the environment and I do believe in recycling. But it never crossed my mind as to what we do with our electronic items once they reach the end of their life cycle.

It’s been a long time since I bought an electronic item, my laptop has been with me for the last 5 years. My old mobile phones are lying somewhere in my home and my old refrigerator was given away to some charitable organization. If I do make the time to find my mobile phones, I might contemplate selling mobile phones for cash or maybe even sell them on ebay.

I have heard of people throwing electronic items in the trash and maybe lot of us do it unconsciously. We just don’t pay attention or think about it at the time. I have heard that throwing electronic items in the trash can be extremely harmful to the environment. Therefore, I decided to be conscious about it from now on and choose to recycle it from now on.

Recycling could be something as simple as, just reselling your old electronic items back to the dealer and getting a discount for your new purchase. If your dealer does not do that, you can look up the local yellow pages for “electronic recyclers” in your neighborhood. I heard recycling is big business today.

So until next time, GO GREEN.

About the Author

Vinil Ramdev is an entrepreneur, speaker and author of several ebooks. He is founder of StartUpGrowthExpert.com – An Online Magazine For Entrepreneurs who want to start and grow extraordinary businesses.

I came across a great guy who’s changing the way fitness and health is being perceived. I want you to meet Markus Rothkranz.

Having healed himself of multiple life-threatening illnesses, Markus Rothkranz is living proof how amazing life can be when we take matters into our own hands. Markus looks younger at 47 than he did when he was 27.

Emails pour in daily as a testimony to how many lives he has touched. It’s all about awakening the planet to a new way of living in body, mind and spirit. The only way to heal the planet is to heal ourselves first, and Markus shows us how to do it naturally, the way nature intended. Check out his video below.

Let us know what you think of this video in the comments section below:

You can win a free copy of my ebook “How to write a business plan for astonishing results? In just 3 days!” Just tweet “why do you want to be an entrepreneur?” followed by #bplan2010.

One of the tweets will be randomly selected and gifted an ebook “How to write a business plan for astonishing results? In just 3 days.“

We had another great entrepreneurship seminar in Bangalore. The turn out was much better than our previous seminars.

We had a nice mix of attendees, a big majority were under 30 years of age compared to our seminar in Mumbai where we had quite a few attendees in the 5o+ category.

I guess there is no real age when it comes to starting a business. The only requirement you need is commitment and a strong desire to serve people.

Our next seminar is in Pune on 25th April, 2010. See you there.

Image: jscreationzs / FreeDigitalPhotos.net

Dear Warren,

I am writing this email to thank you for being such a wonderful role model. For showing us how to be kind, generous and rich.

You represent the rich and successful people of the world. You also happen to be one of the most generous and ethical people in the world.

When I was young there was this perception around little kids who I played with that you had to be unethical to be rich. There was also this perception that rich people are arrogant and they are rich by unethical means like tax evasion, smuggling and fraud.

Today, I realize that it is the opposite. If you have to get rich you have to hold yourself to the highest possible ethical standards.

You have set those ethical standards for the entire world to emulate. I am really proud to have lived in this era where such great people like you exist.

There are several consultants in the field of business who write manuals on best practices. I am sure they are doing a fabulous job of it. For me, best practices in business are those followed by the great Warren Buffet and his company Berkshire Hathaway.

I salute you for your achievements in the world of business, life and relationships. I LOVE YOU MR BUFFET.

MAY GOD BLESS YOU AND YOUR FAMILY. WISH YOU EVERLASTING HAPPINESS, SUCCESS AND WEALTH.

Your silent admirer,

Vinil Ramdev

Vinil Ramdev is an entrepreneur, business coach and author of the ebook “How to write a business plan for astonishing results? In just 3 days!” He is also founder of StartupGrowthExpert.com

Image: Francesco Marino / FreeDigitalPhotos.net

This is a preview video of our entrepreneurship seminar “How to start and grow your business faster than you thought possible.”

Image: jscreationzs / FreeDigitalPhotos.net

It is that time of the year again when the IPL kicks off in India. For many of my friends in North America and Europe who are not familiar with the IPL. The IPL is the Indian Premier League where 8 teams compete in a home and away format in a game of cricket.

The IPL although only in its 3rd edition is as popular in India as the super bowl is in America or the English Premier League is in England.

So far the league has favored the underdogs. In the first edition, Rajastan Royals which was rated as the weakest team in the IPL won the title. In the second edition, the team that finished last in the league in the first edition won the title and the team that finished second last in the first edition came to the finals.

This year also the trend seems to continue. Kolkota Knight Riders, last year’s wooden spoon holders have won their first two matches and look like the team to beat.

My prediction for the semifinal line up is:

Kolkota Knight Riders
Bangalore Royal Challengers
Chennai Super Kings
Rajastan Royals

I know it is quite an unconventional line up. I have left out the dangerous Delhi Daredevils, the defending champions Deccan Chargers, Kings XI Punjab and Sachin Tendulkar’s Mumbai Indians.

Let’s wait and watch to see if my prediction turns out right!

Image: Simon Howden / FreeDigitalPhotos.net

The woman’s reservation bill is making all the news for the last couple of days. Most of the media is in full support of the bill. Even most politicians who oppose the bill are not directly voicing their opposition.

We have journalists and celebrities like Shabana Azmi coming out in full support of the bill calling it one of the most progressive bills in Indian history.

Further, some politicians are trying to leverage this bill to get some sort of reservation for their own communities (read caste and religion).

According to BBC correspondent Southik Biswas’s blog, during the making of the Indian Constitution, the only person who supported reserving seats for woman was a man.

He further goes on to mention in his blog that women railed against reservations. Constituent Assembly member Renuka Roy said Indian women “have been fundamentally opposed to special privileges and reservations”. Her colleague Hansa Mehta rejected reservations, saying what women wanted was “social justice, economic justice and political justice”.

Even today, several women are opposed to the bill. Priya Ramankutty on an online community commented that “most women have mixed feelings on the subject of reservation. The women who have worked hard to make their way up in a so-called man’s world feel that reservation will deprive them of the opportunity to compete with men on equal ground and isn’t that what we have been clamoring all along for equal opportunities not reservation.”

She further goes on to say “on second thoughts, women who do end up using reservation will turn out to be the wives, daughters, sisters, moms, aunts, nieces of Corrupt Politicians in backward areas. These women are just hand puppets acting on the behest of their men to protect their vested political interests. So I highly doubt if its the women who ultimately benefit from the reservation? And do we really want such women who need the crutches of reservation / quota system in the public arena participating in affairs of national interest is the million dollar question.”

I don’t mind 100% women in parliament, but they should be there because they are the best people for the job NOT there due to some quota or reservation. We are finding every little way to divide our country. Today, it’s woman’s reservation, tomorrow every other community is going to stand up and divide the country based on gender, color, religion, caste and god knows what.

Very soon, we’ll see people getting jobs because of their caste, religion, gender rather than ability. Is this the country that we dreamed about, where ability, productivity and hard work gets penalized? I don’t think so. This is not the country we desire, we want a country that does away with reservations of all kinds. There should be absolutely no reservations.

Furthermore, I think this woman’s reservation bill is disrespectful to women. The majority of men in parliament are having their way, they are quietly saying in their minds, “We told you so, you couldn’t compete in the so called man’s world. So we are giving you a reservation because you are weak.”

Women are not weak, they are way stronger than men. I am absolutely certain a day will come when there will be more than 50% women in parliament (without the reservation) and they will all be democratically elected and will be there based on ability NOT some reservation or quota system. It’s no wonder that most people opposing the Woman’s reservation bill are women.

I think, it’s time our politicians stopped dividing the country based on caste, religion or gender. It’s time for them to focus on real issues like infrastructure, development, creating more jobs by promoting entrepreneurship, law and order, terrorism, citizen’s rights and education at the grass roots level.

Instead, our politicians are busy dividing the country when we have real issues to solve.

It’s time for real democracy. It’s time for us to stand up and say “enough is enough!”

Vinil Ramdev is an entrepreneur, business coach and author of the ebook “How to write a business plan for astonishing results? In just 3 days!” He is also founder of StartupGrowthExpert.com

Tags

womans reservation bill, women, reservation, parliament

Image: jscreationzs / FreeDigitalPhotos.net

Our seminar in Bangalore on 27th Feb, 2010 was great. Some wonderful people attended the seminar again.

It so excites me to see some great people who are so passionate towards entrepreneurship.

We had a college student who is still in his second year of college with a brilliant business idea, that he plans to implement real soon.

We are planning on a few more seminars related to entrepreneurship and business in the month of March 2010. Look forward to see you guys there real soon.

Image: graur razvan ionut / FreeDigitalPhotos.net