Debt - Good or Bad for you?
The word “debt” is not renowned for its involvement in success, although, should it be?
Owing someone money, goods or services is not the best feeling in the world and leaves many of us stressed or overwhelmed by its pressures. The trick is realising when debt can be good for you and when it can be bad.
Bad debt transpires when you borrow money and invest it into a non income-producing asset and/or an asset that decreases over time. Example, buying a car.
Good debt is when you borrow and invest your money into an investment which is income producing. This makes the interest you pay on the loan tax deductible. A good debt usually means the asset purchased is increasing in value, for example, a property or shares.
Controlling your debt can ultimately make or break your financial success. It is important to realise whether or not your money is working for you, or you are working for your money.