When To Take On Debt - Deepstash

When To Take On Debt

Debt is a liability unless you use it to finance income-generating assets. Don't take on debt for anything that does not increase in value over time.

Suitable forms of debt include buying real estate as a rental property, investing in your business, or a student loan.

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"Rule No.1: Never lose money. Rule No.2: Never forget rule No.1." ~ Warren Buffett

The idea is part of this collection:

Behavioral Economics, Explained

Learn more about moneyandinvestments with this collection

How to make rational decisions

The role of biases in decision-making

The impact of social norms on decision-making

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Calculating your assets and liabilities

Assets are anything of value that you own that can be converted into cash. Examples include:

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Personal debt destroys your net worth like nothing else

Personal debt destroys your net worth like nothing else

We must be wise about taking on debt. Like investing, there are rules to it. One thing is sure: Never borrow money to buy a car, electronics, or anything else that goes down in value. But when it comes to more complex things like growing/starting a business, investing in real estate, or ev...

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