If you believe that the market you invest in will rise, why are you content with the money in your hand? You can borrow from your friends or relatives, withdraw credit from banks and earn more with bigger money, you can quickly close the debts you receive. So, do all these processes really work like this?

One of the things I have often emphasized since the first writing was that you should question if you were really an investor. In my opinion, especially in the crypto markets, many people think that they have invested, actually play gambling, act according to the words of others and tend to blame others after sinking. In today’s article, I will discuss why people invest with debt and loan, why this is ridiculous and what issues should be paid attention.

The risk threshold of the debt is rising further

First of all, each of us has different personalities. Some of them draw a very guarantor profile, while others prefer to be a more balanced investor, while others progress with the mentality of “either or not” and raise the risk threshold. When we look at the people who invest in crypto markets, we will not be wrong if we say that most people are from the third group (considering that at least 90 percent in each cycle remains inside or with damage). One of the frequently seen behaviors in these people is to try to make “investment ıyla by borrowing or withdrawing loans. They believe that the market will rise by relying on the people around them, crypto phenomena or their own knowledge in a very short time, provide tremendous gains and make money they can make money. Therefore, a person who believes that the market will rise believes that he can close the loan or debt in a short time, that this is not gambling and that he makes a conscious decision. Another problem caused by this situation is that people are more tightly attached to their decision and raise the risk thresholds further. Since a person who thinks that the market will rise and deposits more money by taking more risks will not want to believe that what he does is unreasonable, he will tend to get more cognitive bias.

Unconscious damage to the debts received

However, no one knows what direction the market will go. What we do is to create certain investment strategies based on certain scenarios and to make changes in our plans in a dynamic way, to try to protect our risk and portfolio as properly as possible. Thinking that you can quickly close the debt or loan you receive from this point of view, it cannot go beyond the error. 2x You may believe that you can invest at zero cost by selling half of the products you buy in a scenario you make (and this can sometimes be really), but unconsciously, you should also consider the scenarios that the debt or loan may suffer with your balance.

Damage is not just about material

Another problem of “investment ile with debt or loan is that people can make emotional and hasty decisions in order to replace them with non -money. If the market shows a very small sign of rise, people are caught in Fomo and jump to the train, make purchases and expect the price to come to the targeted area. At this point, even if people make snow until they make 2X (until they reach the level of paying the money they borrowed), they do not end their transactions and they are thrown with the movements of the market. Here we are talking about the scenario that the person has won and has not yet lost money. In the scenario it damages, completely different mechanisms come into play. In order to compensate for the existing damages, the person can continue to take more debts or loans, and try to save his money quickly (in a much more risky way) by taking futures transactions and tries to close the debt he has lost and new. The scenarios I mentioned have of course you or you know. We often see such examples in news or social media. These situations adversely affect both the person and its immediate surroundings from the material dimension as well as emotional, psychological or physical aspects, and lead to deterioration of one’s existing relationships and decrease in quality of life.

Minimize the damage

It is the process of directing to different financial vehicles (gold, foreign exchange, stock, real estate, crypto, etc.) in order to invest, to provide a certain return on your existing savings that you do not need and risk. Each financial vehicle has its own risks and return potentials, as well as periods (such as economic crisis, war, high inflation, low interest periods). Every investment you make has two absolute consequences: you either make more money or lose more money. Therefore, it is very important that you invest in amounts that will not affect your financial situation, personal good or psychology if you need or lose your daily life. Of course, every money lost affects people negatively, but it can cause much greater problems for people after a certain threshold.

Does the amount of debt you receive affect your daily life?

Based on all this, I do not claim that you should never invest with debt or loan. Of course, when the interest rate is low and the market is not very volatil, you can evaluate relatively less risky investment instruments by withdrawing or borrowing, but the ability to evaluate the relevant periods comes with financial literacy. As long as you educate yourself, observe the market and macroeconomic culture, you can borrow a loan as long as you consciously invest. In my opinion, even at this stage, it will be a much more accurate approach that the amount you borrow is in the amounts that do not affect your daily life, individual good or existing relationships. You should always remind yourself and decide that you can do as much as you think you can profit and sell the products you have at a loss to pay your debt (if you cannot create a different resource) and decide accordingly.