Managing Your Debt!

Getting out of debt, and fixing the problems you may have with debt. How to use good debt to increase your net worth, your bottom line.

Credit cards are a wondrous creation, allowing us to rent cars, make plane reservations, buy presents over the internet, pay for groceries, and buy shoes. Credit cards can also tempt us, easily luring us into debt. Even my dentist accepts credit cards as a method or payment when I have my teeth cleaned.

 

Good Debt vs. Bad Debt

Good debt is debt used to purchase an appreciable asset, bad debt is debt used to pay for consumable purchases.

There is good debt, and there is bad debt. Good debt is debt used to purchase an appreciable asset---an asset that will go up in value such as a house, growing your business, or paying for an education. Educational debt is considered good debt because an education helps you further your career and improves your opportunity for a higher salary and a better life. Good debt enables you to build your net worth over time. It also enables you to purchase an asset that would take years of saving to acquire, such as a house.