Learn from Japan’s colossal fiscal woes

Let’s forgive the Japanese for creating Hello Kitty and exalt their position as home to some of the world’s largest and most technologically advanced producers of electronic equipment, motor vehicles, machine tools, and many more innovations that make life easier for us. However, over-zealous debt financing has played a part in eroding the fiscal stability of Japan’s active economy and kept them at number two in the ranking of the world’s largest (with the US at number one).

Number two in the world is really not a bad position to be, still, entrepreneurs can learn from the story of Japan’s crushing debt-to-GDP ratio – an estimated 190% – and avoid racking up oodles of debt in the name of stimulating their businesses.

Debt compromises your flexibility, so if you are going the route of debt financing, proceed with caution.