When Debt is the only option, then choose Good Debt

Good Debt vs. Bad Debt

Good Debt

There’s no better example of the old adage “it takes money to make money” than good debt. Good debt helps you generate income and increases you net worth. Four notable things that are worth going into debt for:

1. Technical or College Education

2. Small Business Ownership

3. Real Estate

4. Investing

SEE ALSO: ‘The Fed Is Like Mr. Magoo! We Are Headed For A Massive Financial Crisis’

Bad Debt

While even “good debt” can have a downside, certain debts are downright bad. Items that fit into this category include all debts incurred to purchase depreciating assets. In other words, “if it won’t go up in value or generate income, you shouldn’t go into debt to buy it.” Some particularly notable items related to bad debt include:

1. Cars

2. Clothes, Consumables and Other Goods and Services

 

3. Credit Cards

Robert Kiyosaki – Buy Assets! from Rich Dad on Vimeo.

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