Good Debt, Bad Debt (BusinessWise Podcast)

Is all debt bad? Is it possible to live 100% debt free? Are there times when it may be advisable to take out a loan? How can you tell the difference between bad debt and “good” debt?  Is there even such a thing? There are some types of debt you should avoid like the plague!

Debt is certainly one of the biggest causes of financial distress, but not all debt is the same. It’s important to learn about the ins and outs of different types of debt and the negative repercussions. Then it’s up to you to decide what level of debt your family is comfortable with carrying, if any.

Listen to this 3-minute segment from my interview with Crystal Faulkner of the BusinessWise Radio Show below for my take on Good Debt versus Bad Debt.

The weight of debt can be very heavy, so I want you to be very cautious with it. I would love for you to avoid debt entirely, however I know that may not be your choice. So if you are going to borrow, here are two rules to keep in mind:

  1. Borrow as little as possible and pay it back as quickly as possible.

  2. Debt should not be used for consumption, only to build income and wealth.

By following the above rules, you’ll keep your debt to a manageable level if you decide to take on any at all! What types of debt do YOU consider good or bad?

Comments 7

  1. Great post. Debt can be financial fatal, but also very advantageous to your income/wealth accumulation, if properly managed.

    Being knowledgeable about understanding the difference between the two is your first step. Christine lays this out very well. I highly recommend.

    Well done!

  2. I think this is such great info. So many people, including myself, do not know the difference! Thank you for educating me!

  3. This is such a great article outlining the differences. I honestly didn’t know the difference and it’s so important to be knowledgeable when it comes to debt!

  4. Outside of our house payment, we try hard to stay debt free. We had to file bankruptcy about 6 years ago and now try not to carry any debt that isn’t necessary such as home mortgage and recently our air went so we finance a new one. But we try hard not to carry a debt of any kind.

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