Good Debt vs. Bad Debt – What’s the Difference?
Whether good debt or bad debt, we all know debt levels are out of control. The statistics are staggering.
Consider that there is $40,000 of debt for every man, woman, and child in the U.S. and the numbers just keep going up.
There’s a little more to it than that. As always, life is shaded a little more gray than the black and white bullet points.
For better or worse, our entire economy is built on debt and the leverage it creates.
What is Good Debt vs. Bad Debt?
In this case, debt was ultimately responsible for a major technological innovation and created an enormous amount of wealth. So debt can’t be all bad, right?
It turns out that debt is just a tool, not inherently good or bad in itself. It allows you to spend money you haven’t yet earned now.
Often good debt or bad debt is determined by what you do with it. It can be difficult to delay gratification in our consumeristic society, but ultimately good financial habits require discipline and purpose.
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