Good Debt vs. Bad Debt: What You Need to Know Now

Wondering what the difference is with good debt vs. bad debt? Here's what you need to know about it.We need to talk, because the good debt vs. bad debt information you see out there a lot is often completely inadequate. So, get ready for a point of view you may not have heard before.

First though, since you’re probably wondering what the difference is between good debt and bad debt, let’s go over the standard definitions of the two. Those definitions will be important for what comes next.

What do people consider good debt?

Good debt is usually defined as money you borrow in order to invest in your future or to buy an appreciating asset.

(An appreciating asset is something you buy that you believe will be worth more over time.)

So the idea is that borrowing now can help you make your life better in the future or grow your net worth.

From that point of view, student loan debts are “great” because you might be able to get a better job with a degree.

Likewise, a mortgage could be thought of as good debt because real estate may be worth more as time goes on. (And you need somewhere to live anyway.)

Also, “good debts” usually have lower interest rates compared to other kinds of things you might borrow for. (Which is not the same thing as saying the interest rates are usually low. They may or may not be.) So you might also consider it to be debt that costs you less.
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How This Entrepreneur Paid Off $9,500 in Credit Card Debt in 10 Months

How Nicole paid off nearly in credit card debt in less than a year.Nicole Bandklayder is a serial entrepreneur that is on the verge of becoming debt free. Like many people, she knows all too well that credit card debt can be overwhelming.

For the last decade, Nicole struggled with about $10,000 in consumer debt between her seven or eight credit cards. A major move helped her free up finances, but she also found that she needed to change her mindset if she wanted to be debt free.
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The Middle Class Lie That’s Keeping You from Real Wealth

It might be time to change that mental money script and escape the middle class lie for good!Today’s post is from Aja McClanahan of the Principles of Increase. She & her husband paid off all their personal and business debt in 2013. (Woohoo!) Now that she & her husband are debt free, they have the highest quality of life ever.

Growing up, there was one thing my mom drilled into my brain constantly. We are the middle class and deserve nothing less than what educated, professional middle class families deserve. Her parents were professionals who worked hard and sent her and her siblings to posh Catholic schools. They lived in one of the nicer neighborhoods available to African Americans in Chicago at the time of her rearing. Her parents dressed them nicely, always drove nice, new cars and were always able to upgrade their home on a whim based on their ever-increasing incomes. In her mind, there was nothing less that could be normal for her.
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7 Surprising Reasons People Stay in Debt

Food for thought.Ask someone why they haven’t gotten out of debt, and they’re likely to give you a deer in the headlights look. Or they might reply with “I can’t” or “I’ve tried, but it didn’t work”, and then go on to explain what happened when they tried to pay it off.

Have you ever thought about the reasons people stay in debt? Here are seven surprising reasons why.
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