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Title: What are differences between the good and bad debt Post by: Agung on August 23, 2008, 12:55:13 am What are differences between the good and bad debt?
Title: What are differences between the good and bad debt Post by: RecycleMichael on August 23, 2008, 06:30:15 am Good is debt I am owed.
Title: What are differences between the good and bad debt Post by: TheArtist on August 23, 2008, 08:15:57 am I would guess with good debt, the long range return is greater than the short term loss.
http://www.mrswing.com/artman/publish/best-financial-blogs/How_to_Become_Wealthy_Redefining_the_Idea_of_Money.shtml Title: What are differences between the good and bad debt Post by: GG on August 23, 2008, 10:46:08 am Home Mortgage=good debt
Credit Cards=bad debt Student loans=good debt Gambling/Bookie/Dealer=bad debt Title: What are differences between the good and bad debt Post by: OUGrad05 on August 23, 2008, 10:51:00 am quote: Student loans aren't good debt, just ask my wife. Work your way through school and PAY for it and you'll have immense freedom once you graduate :) Title: What are differences between the good and bad debt Post by: RecycleMichael on August 23, 2008, 10:55:54 am I swear my bookie and my insurance guy are the same.
I pay a little every month. If something good happens, my bookie pays...if something bad happens, my insurance man pays. Title: What are differences between the good and bad debt Post by: Red Arrow on August 23, 2008, 12:08:57 pm quote: Education enriches your mind. That's a good thing. Some career choices are more financially rewarding than others. I was fortunate enough to go to college when a middle class parent and summer job working student could pay for school without a loan. Title: What are differences between the good and bad debt Post by: TheArtist on August 23, 2008, 12:34:15 pm Its such an alien concept to me that someones parents would help pay for their kids college. Mine were like..."Pay for your own danged college, I paid for mine" "why should I give you MY hard earned money? Earn your own danged money." "Now get the he11 out of my house!" lol.
I said "hellooo army and GI bill, and working 2 jobs while going to college at the same time". No loans, and no parental strings attatched either lol. I have an old saying that is sooooooo very true. Nothing, nothing, nothing, in life is free. Every smile, every bit of happiness, every feel good moment. You either earn it, or you WILL pay for it later. And that old credit card of life can have one whopper of an interest rate, so beware. Title: What are differences between the good and bad debt Post by: OUGrad05 on August 23, 2008, 12:52:13 pm quote: It's entirely possible to pay for a college education today. It takes sacrifice, in otherwords, you aren't partying your donkey off all the time but it can be done. I did it. It took 5 years but I did it by working full time while I was in school. Total outlay by my parents was less than a thousand bucks as my dad helped with books. I also paid my mom 450/mo rent while in school...so it can be done, just takes sacrifice. Title: What are differences between the good and bad debt Post by: Steve on August 23, 2008, 04:14:53 pm quote: What a refreshing story. I am of your parent's generation, but have a similar story. I graduated from TU with my bachelors degree in 1979, totally debt free. Got my MBA in 1983, going back to night classes and taking advantage of employer continuing education benefits. I decided years ago, that for me, any type of debt was "bad debt." Be it credit card, mortgage, or whatever. For the past 6 years, I have lived my life debt-free after paying off my home mortgage 13 years early. I have continued since then to live "pay as you go." It is great, not having monthly credit card statements and such, knowing that you are living within your means. My thinking is that if I can't pay cash, I can't afford it, and that has served me well for many years. Title: What are differences between the good and bad debt Post by: OUGrad05 on August 23, 2008, 04:59:25 pm quote: I agree completely, while I'm not "opposed" to mortgage debt I also view all debt as bad. But I do have a mortgage. Car debt is also something I shy away from or try to minimize. Cash is king and more often then not you find yourself spending less because you dont' really "need" that new shirt, those jeans or that expensive TV. If you really want/need it you'll find yourself motivated to save and pay for it. On the subject of this thread I view mortgage debt as acceptable and car debt. The ONLY way car debt is acceptable is if you put enough down that you are NEVER upside down and you can pay the car off in 24 months. I personally still prefer no car debt and am saving for my next car right now...hopefully it will be a cash purchase in 2010 :) Student loans are nothing more than another way modern society has justified debt and attaining things they either can't afford or do not want to make the real sacrifices for. My parents gave me less than a thousand dollars worth of help...total help from family total was about 2500 bucks. The semester my dad got a brain tumor and died I incurred a LOT of expenses included working substantially less for obvious reasons. My grandpa helped me pay my tuition off that semester as the last 1500 bucks I just couldn't manage to do. He was also a big anti debt guy and a business owner and new I was working my donkey off. He told me from that point forward if I never need help to let him know that he wouldn't allow me to go into debt. Thankfully I did not need his help after that, and he died the following year :( But you can do almost anything debt free INCLUDING school if you want it bad enough and are willing to make the sacrifices to do it. Title: What are differences between the good and bad debt Post by: Conan71 on August 24, 2008, 12:49:16 am Not sure if I'm a good dad or bad dad for paying for my daughter's college after reading some comments here. Overall, fall and spring this year will tip the scale at about $13,500 before a $2000 scholarship. That's inclusive of room & board. My plan is not to incur any debt as a result and I don't want her to either.
Hopefully she will have one of the scholarship positions on the rowing team next fall and she will have a full-ride, but who knows. If I have to go "COD" for all four years all will still be fine. My mother paid for my college and didn't go in debt to do it. I consider myself fortunate to have had that and want to offer that oppty to my kids. Title: What are differences between the good and bad debt Post by: OUGrad05 on August 24, 2008, 09:21:40 am quote: I dont think paying for your kids school makes you a bad dad, nor am I trying to come off as judgemental. We all view things through a different lense perspective. What I would do, is urge you to have your kids work part time while in school and especially during the summers. They'll always try to find a way/excuse out of it but it will be good for them in the long run and they'll appreciate it more. I'd also urge you to not pay for 100% of their college. But again thats just me and MY opinion. I don't think there's any right or wrong answer on this. My wife and I plan on starting to have kids in a few years, right now we're investing money each month in a "college" account. Then when a kid is born we take some money out of that account and put it into a 529. The goal is to pay for a minimum of their first full year of school and we'd consider paying half of it. But at this point we're thinking scholarships/grants and them working and saving can pay for the rest of it. Neither me nor my wife (I grew up poor she grew up well off) had our college paid for and we both feel it makes us appreciate it more and it provides real perspective on life in a time when kids are partying and thinking life is all candy and nuts. Title: What are differences between the good and bad debt Post by: citicredit.asia on August 24, 2008, 08:56:04 pm Debt in and of itself is not a bad thing. Both of us were able to start our own businesses because of debt; Steve began his own law practice, and Azriela began her own entrepreneurial consulting business. So we understand what debt is and why some debt is great debt.
Debt that helps you, enriches your life, is manageable, and is not a burden can be called good debt. For example, student loans are good debt if they enabled you to get through school and further your life goals. They are bad debt if you dropped out of medical school after one year to become a writer. A good debt helps; a bad debt hinders. www.citicredit.asia Title: What are differences between the good and bad debt Post by: OUGrad05 on August 24, 2008, 08:59:42 pm quote: Stats show and prove that more than 85% of small businesses fail. Of those small businesses that fail 92% of them fail because of debt soaking up their cashflow. Thats the ugly side of the statistic that most poeple in the lending business refuse to talk about it. You could start a business without debt, greatly increase the chances of its success and ultimately wind up in the same spot or even further ahead. Some of the best businesses in their respective fields are run with little or no debt. Title: What are differences between the good and bad debt Post by: Red Arrow on August 24, 2008, 09:25:24 pm quote: I agree with one exception. A company without debt (or with low debt) may be undervalued if it is publicly traded, making if ripe for a take-over by someone who only wants to split it up and sell the assets. Then all the jobs go away. I worked for a company that ultimately went away because of that. Not directly but that was the final result. Title: What are differences between the good and bad debt Post by: OUGrad05 on August 25, 2008, 04:25:57 pm quote: Excellent point, again I'm not anti debt for a business especially a publicly traded on but for small business owners running your business debt free and as little leverage as possible makes the business more stable and much more profitable during downturns...though growth doesn't occur as rapidly either. Title: What are differences between the good and bad debt Post by: Red Arrow on August 25, 2008, 05:40:06 pm quote: Being debt free can be a matter of survival during a downturn for a small business. Lost a job on that one too. Title: What are differences between the good and bad debt Post by: tulsa1603 on August 26, 2008, 09:35:24 am After running up a $2000 credit card bill over a semester in college, and realizing how hard that was to pay off on the pittance I made in those days, I figured out that "If I can't afford it, I don't buy it". If I can't pay for it now, why would I be able to next month? Especially when next month there will be another "justifiable" purchase.
Mortgage debt doesn't bother me, as long as my house is increasing in value. It's how developers make money. Use someone else's money as the principal. My first house I only owned for 2 years, but when all was said and done, I actually got paid to live there, despite paying interest, investing in some improvements, etc. Or, say I got an inheritance that would allow me to pay off my mortgage... I think I'd rather invest that money in the market or in perhaps an investment property, since over time I think I'd be more likely to make a higher percentage than the interest on my house is costing me. Title: What are differences between the good and bad debt Post by: Steve on August 26, 2008, 01:33:54 pm quote: I should qualify my previous post; mortgage debt can be good, as long as you don't take on more debt and terms than you can really afford. Witness the recent "sub-prime" fiasco. I blame that more on greedy borrowers than I do on preditory lenders, people wanting much more house and ammenities than they can realistically afford. And, there are tax advantages for young borrowers with mortgage debt. Credit card debt is 100% bad, IMO. I have credit cards, but for years I have never charged more that I could not completely payoff each month. To carry a balance, you wind up paying twice as much for the goods and services. Bad. I have never financed a new car. I have always paid cash + trade-in for every new car I have owned. That may soon change, as new cars today are so expensive. I currently drive a 15 year old Oldsmobile 98 that I ordered brand new in 1993, and she still has only 53,800 miles on her. Very well maintained and still looking brand new, hopefully it will last me for at least another 10 years. Title: What are differences between the good and bad debt Post by: tulsascoot on August 30, 2008, 08:27:01 pm quote: So you are class of '58 or something right. haha Title: What are differences between the good and bad debt Post by: tulsascoot on August 30, 2008, 08:34:41 pm quote: That' only 3500 miles/year. I don't think many people could drive that little. My commute is 30 miles round trip. That alone is 7800 miles per year. It would be hard for most people to keep a car that long without it becoming horribly unreliable and worn out. Title: What are differences between the good and bad debt Post by: Red Arrow on September 01, 2008, 09:52:19 am quote: Not quite that old. I still have a few years to retirement. |