I was at a seminar on Tuesday evening and the speaker, Tim Suloff, a Stewardship Representative from a local college, shared the 3 laws of the Least. With his permission, I thought I would share it with you:
- Borrow the LEAST AMOUNT of money possible.
- Borrow for the LEAST TIME possible.
- Borrow at the LEAST PERCENTAGE RATE possible.
The laws of the least are also purposely put in the order of effectiveness (2 is more effective than 3, 1 more effective than 2). I thought it was a very succint way of putting it. A good reminder that borrowing costs, and if we have to do it, ways to minimize expense.
{ 2 comments… read them below or add one }
Borrowing is not bad if used to increase your investments (through leveragng). The thing is to borrow what you can afford to payback based on realistic future cash flows.
Your right Andy, borrowing is not necessarily bad – you just have to be careful and do it wisely. My preference though is to be a lender (stocks, etc.) rather then a borrower (debt).