Debt is debt no matter how big or some or how you look at it or how you want to look at it. Money owed is debt, whether it is for investment, education or purchasing any property. Most of us cannot live debt free, mainly there are two types of debt, “good” debt and “bad” debt.
Good Debt - Amount which you spent on assets which will appreciate in value and also increase your wealth.
Bad Debt – Amount which you spent on consumer items and it also depreciates in value.
Good Debt
Good debt is mostly used to build long term wealth and make financial sense. For example, a home loan or a student loan, these expenses allow you to gain a qualification which enables investment in your future career. One of the best ways to use debt is borrowing to invest in an asset like property or shares. It generates income and grows in value.
Bad Debt
Bad debt includes money you borrow as personal loans and credit cards to pay for day-to-day expenses, holidays or an asset like a car. Some may argue that a loan for a home can be considered as a bad debt compared to a load for an investment property.
Read More: "Bad Debt Collection"
Good Debt - Amount which you spent on assets which will appreciate in value and also increase your wealth.
Bad Debt – Amount which you spent on consumer items and it also depreciates in value.
Good Debt
Good debt is mostly used to build long term wealth and make financial sense. For example, a home loan or a student loan, these expenses allow you to gain a qualification which enables investment in your future career. One of the best ways to use debt is borrowing to invest in an asset like property or shares. It generates income and grows in value.
Bad Debt
Bad debt includes money you borrow as personal loans and credit cards to pay for day-to-day expenses, holidays or an asset like a car. Some may argue that a loan for a home can be considered as a bad debt compared to a load for an investment property.
Read More: "Bad Debt Collection"
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