Just received my credit card bank statement, my house and car loan statement. Oh gosh... used up all my bonus or salary just to paid off my debt. Feel so sad when view back my balance saving account turn to zero once paid off everything. My credit card amount seem like rolling like snowball never stop paying to the bank. Once paid off, the amount growing again. Sound familiar to you?
Bankruptcy is always an alternative option if you are in financial trouble and can't really manage to paid off a large amount of debt. I believe many people will not choose this as option unless no other better solution.
As most of you know there is good debt and bad debt. What is good debt and what is bad debt? Simply put, good debt makes you rich and bad debt makes you poor. More specifically, good debt is debt on which someone else makes your payments, and bad debt is debt you pay for. An example of good debt is a loan on a rental property where your tenant pays rent and the rent covers your mortgage and expenses — and puts money in your pocket. An example of bad debt is the debt on your car or your home, debt you have to pay for
Many people simply say, ‘Get out of debt.” That makes good sense if you are loaded with bad debt. But if you have a higher financial IQ you may want to get into debt… a lot of good debt… debt which someone else pays for and debt that will ultimately make you richer. In financial terms, good debt is often referred to as leverage.
A word of caution before running out to get into good debt: Please remember that debt is a double-edged sword. If the economy changes, good debt can change to bad debt very quickly.
The bottom line is that in order to become a successful investor you first must put your personal finances in order. Simply said, if you have too much bad debt due to poor financial habits, please do not get into any more debt, good or bad. Once you get your personal finances in order and under control, you may be ready to go out and look for sound real estate investments to grow richer on. Remember, the problem with having too much bad debt is that bad debt makes it harder to acquire good debt. For many people, just getting out from under bad debt is enough to make their financial future brighter, even if they do not invest.
yuppp! debt that u could generate higher return would be good debt ad!
ReplyDeletewell you bought house thats definitely good debt either! afterall property is a keep rising asset! haha
Bought a house and rent it will be good debt but if bought a house for own to stay then this will be bad debt. Agree?
ReplyDelete“…. put your personal finances in order.” – That means handling your money wisely! Think twice before you buy or invest in something. Have full control over your spending and don’t let your desires take control of you. Always be determined to stay out of debt.
ReplyDelete-Jaden Allred