The word “debt” gets a bad connotation.
After all, we usually associate debt with owing money — and that is true. However, not all debt is a bad thing. In fact, there is good debt and there is bad debt. And we are here to teach you the differences between the two.
In the process, hopefully everyone can find financial security, and of course, live a more profitable — and better — life in general.
Also, just remember this: You can use debt to your advantage. Follow these lessons to properly achieve that feat.
Credit Cards Are Bad Debt
Credit cards are bad debt — it is really that simple. Typically, people use credit cards for wants and needs. They put big expenses (such as vacations) on credit cards, and the debt starts to rack up.
The bad thing about credit card debt: It doesn’t get us any closer to making more money. Credit cards only involve spending money.
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Yes, credit cards can be used as a backup plan, but credit cards are not making your bank account bigger.
Using An Investor’s And The Bank’s Money — The Right Way To Use Debt
Through the bank and/or an investor’s money, you can make even more money. You already have a great idea mapped out (such as a new business, or any type of investment), but you just need one thing. The main ingredient, if you will, is the actual money. You can obtain this money, assuming you don’t have it, from banks and investors.
By using an investor’s money, you aren’t completely putting your finances (and future) in danger. Yes, you still have to return the money, and interest is also part of the equation, but you are using money to help you make more money — not spending money on a cruise with a credit card (aka money that was spent, and isn’t coming back).
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Debt can make you money, people. That said, debt, in any sense of the word, is a risk.
If you are properly using debt, it can really do wonders when it comes to the journey that is financial security.
In the grand scheme of things, there is good debt and there is bad debt. One can help you become richer, and the other simply takes money out of your wallet.
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