Good Debt Good, Bad Debt Bad
Is debt acquired to purchase something that is going to benefit you financially in the future, usually with low interest. That means it's either going to generate income or allow you to make more money in the future.
Examples of good debt:
- Student Loans: typically have low interest rate and raises future income, if you are headed to a profitable field you enjoy.
- Mortgages: usually long-term loans with low interest rates and tax deductible interest.
- Business loans: investment towards something with the goal of increasing your net worth.
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"There's no money in poetry, but then there's no poetry in money, either." ~ Robert Graves
These are pretty basic but we would all be far ahead financially if we did a few of them.
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3 Financial Basics
- Create a Financial Calendar: prevent yourself from forgetting quarterly tax payments and to get credit reports.
- Check Your Interest Rate: Pay off loans, open saving accounts and negotiate credit debts based on interest rates.
- Track Your Net Worth: The dif...
How to Keep Debt at Bay
- Paying off the little debts can give you confidence to tackle larger ones. It’s recommended to focus on debts with the higher interest rates, but sometimes a moral boost is worth it.
- Don’t cosign loans. If the borrower misses a payment, your credit score plunges and the...
How we can reduce our debt
- We can set up automatic payments to the debt with the highest interest without regarding how much is owed on it.
- We can consolidate multiple debts into a single loan. If you have five different loans with different interest rates, ...
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