Personal finance – What is the good and bad debt?

What is the difference between good and bad debt? Can they even exist this way? I thought debts were simply debts and nothing more. Debt is borrowed from money. Everyone knows that. However, debts are essential in our lives. We all use them to our benefits. On the other side of the room, use it too much, and it becomes a curse instead.

When we go to college, we could have the big sum of money to eliminate. Therefore, the need for a loan is apparent. The loan is also a type of debt. In this case, the debt is a good thing and it helps to serve as a springboard in life. But what takes a car for another example. Is it a good thing to participate in a debt to get a car? As opposed to investing in itself; An education, borrowing a huge amount of money for buying a car can be a good or a bad thing. It’s a good thing if you are a seller, you need mobility all the time. But it’s a bad thing, when you buy this car just to satisfy your ego.

On vacation, you will also spend a big sum of money. In financial terms, it is a huge waste. Yes, you will get good memories, as well as unforgettable life experiences. But it’s not an asset in terms of business and money. This example can be an extreme case. Some will say that having a vacation liberation a lot of stress and heals the mind.

In the end, the goal is to do it when you can afford it. It is not useful to try to flex more than you already spend or can afford. How is it relevant for debts? It’s when you try to take a loan, or much of the money to spend holidays or follies. Enjoy credit is definitely poor debt, rather than a good debt. A good debt is like a collegial education. It serves you in the future.

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