A financial planner would encourage you to borrow money
A) only to buy assets that are likely to generate income or increase in value.
B) to pay your day-to-day expenses and then to invest your income.
C) only when facing bankruptcy.
D) in order to reduce your debt level.

Question

Quizplus · Accepted Answer

A financial planner would encourage borrowing money only for assets that are likely to generate income or appreciate in value, such as a home or a business. This is because these assets can potentially generate returns that are greater than the cost of borrowing. Borrowing for day-to-day expenses or to reduce debt level is not advisable as it can create a cycle of debt and increase financial risk. Borrowing when facing bankruptcy should only be a last resort and any borrowing should be carefully evaluated for risk and potential returns.

A Financial Planner Would Encourage You to Borrow Money