The Difference between Bad Debt & Good Debt

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Good” debt is money owed for things that will help build wealth or eventually increase income over time. This could things such as mortgages, student loans, business loans, money invested in real estate or any other fixed appreciating assets.

“Bad” debt is however all the things acquired from borrowed money that do not improve your financial position at any one time. This is could be things like credit cards or any other debt mostly borrowed for consumption that do not improve your financial outcome. This also includes expenses such borrowing to buy a bigger TV, a better phone or to improve your lifestyle in any way that does not match your current financial position.

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