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Is there such a thing as "good debt"?

I see a lot of posts regarding certain debts as "good debts". Is there such a thing?

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Anonymous

Asked by Anonymous at 11:25 AM on May. 27, 2010 in Money & Work

Answers (21)
  • Yes, a mortgage is good debt, credit cards are not. Most secured debt is considered good debt.
    Jademom07

    Answer by Jademom07 at 11:32 AM on May. 27, 2010

  • usually referring to something that will make you more money in future such as a home, education, expanding business, ect.
    lillie70

    Answer by lillie70 at 11:43 AM on May. 27, 2010

  • Good debt is an oxymoron (a contradiction). No debt is "good." Why would anyone want to pay more for something than it is worth. If you are paying a debt for something with interest, then you are essentially paying more for something than it is worth. How is that good? Perhaps risky is a better word. Some debts aren't as risky as other (houses for example), but it is still not good. What happens if you buy a house, get a mortgage, and then the housing market tanks or they build a highway next to your house. Your house is now worth less than you owe...that is NOT good. So even house debt is not good. Students loans aren't good either because a) you have to have a job/make money to pay them back b) the lender doesn't care if you have a job or not, they want their money after 6 months, c) you're still paying more for your education than it was worth at the time. Sure, you may make more money w/education, but @what cost?
    SherriPie

    Answer by SherriPie at 11:57 AM on May. 27, 2010

  • Like SherriPie said, there is no such thing as good debt. There is less risky debt, but ideally, one could pay for everything up front and not have to pay interest or fees to someone to pay up front for her. Ideally, everyone would buy only what they can afford.
    MomToBeISaMom

    Answer by MomToBeISaMom at 12:07 PM on May. 27, 2010

  • ARE YOU READY TO HEAR FROM A PROFESSIONAL?


    THE PEOPLE ABOVE KNOW NOTHING THEY TALK ABOUT. A HOME IS NOT AN ASSET, IT DOES NOT MAKE YOU MONEY. GOOD DEBT IS REAL.


    DO YOU TAKE ADVICE FROM PEOPLE ON HERE (LIKE THE UNEDUCATED IN FINANCE) OR DO YOU TAKE ADVICE FROM A MILLIONARE?


    HTTP://WWW.RICHDAD.COM

    IraqiVetWife

    Answer by IraqiVetWife at 12:46 PM on May. 27, 2010

  • IMO -credit cards are bad debt and a car loan is good debt.
    Anonymous

    Answer by Anonymous at 1:20 PM on May. 27, 2010

  • I take financial advice from millionaires, which is why I believe that there is no such thing as good debt.

    I sure as heck don’t take financial advice from someone that can’t spell the word “millionaire”.
    MomToBeISaMom

    Answer by MomToBeISaMom at 1:46 PM on May. 27, 2010

  • A loan is debt. So, if you don't need a loan, you don't need debt.
    Anonymous

    Answer by Anonymous at 1:58 PM on May. 27, 2010

  • I don't need a loan for anything. If you pay cash up front for the things you need, then why would I need a loan...and therefore why do you "need" debt?

    BTW, I checked out richdad.com...I'm not even sure what I was supposed to be learning? I didn't see anything on his website that told me how to do anything.

    And how is a car loan considered "good debt?"

    And yes, a house "can" make you money, but it's not a guarantee. Plus, the other way a house is not going to make you money is if you pay on it for 30 years and THEN sell it for more than you bought it for. With the amount of interest you pay, you don't make any money. The key is not to have a mortgage if you can avoid it.
    SherriPie

    Answer by SherriPie at 3:49 PM on May. 27, 2010

  • A house can make you money, but it will make you more money if you don't have to pay interest on the loan (even a short-term loan) that you had on it. Cash up front is still the best way to go.
    MomToBeISaMom

    Answer by MomToBeISaMom at 4:09 PM on May. 27, 2010

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