I was hooked on flying by the U.S. army aviation brochure in the recruiter’s office. I wanted to jump behind the controls of a helicopter and take off. But first I spent 15 months learning weather, aerodynamics, instrument flying and more.
I went from army pilot to corporate “finance guy” but I see parallels between piloting a helicopter and borrowing money.
A veteran pilot with decades of flight time, including combat tours in Vietnam, told this young lieutenant “take-off’s are optional, landings are mandatory.” How does that principle apply to borrowing money?
What gets borrowed must be repaid. Sir Isaac Newton’s 1st Law of Motion states that a body in motion stays in motion until acted upon by an external force. Likewise a borrower can “take off” with a new loan and keep flying until default, bankruptcy or maturity date forces repayment. Make a controlled “power-on” repayment not the crash landing of default. You might avoid repayment by filing bankruptcy or getting a bailout but the weight of repayment falls on someone’s head if not your own. The result is a crash with the wreckage of broken credit, damaged reputations, smashed relationships, higher borrowing costs and moral hazard scattered across the borrowing field.
Before you get behind the controls of a loan ask yourself:
- How will I repay this loan?
- Does this loan fit my financial goals?
- Can I soar with the added drag of more debt?
- Do I know what I’m signing? Do I need professional borrowing help?
I made many takeoffs in my helicopter and never crash landed because I learned and respected the laws of physics. Before you take off in your new loan look ahead to the landing zone of repayment.