What are differences between the good and bad debt?

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Postby kaitlynisabelle » Thu Sep 18, 2008 12:39 am

Normally debt is a bad word, better is we should not get debt it is very important in our life but then too we get it.... nothing is gud in getting a debt we broke even relationships bcoz of debts....

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Postby KC95 » Thu Sep 18, 2008 11:28 am

i say this: good debt is less than the amount of inflation (5 or 6%?) because then you aren't really spending anything.

bad debt is more than that amount because then it's costing you real money.

businesses look at debt this same way and you should too.

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Postby sreeja » Tue Sep 23, 2008 5:30 am

The good debt is any debt that is used to grow assets and is tax deductible. If accelerated wealth building is your goal, it’s ok to keep a balance on good debt as the low interest after the tax deduction is a way to grow your wealth via other peoples money.Bad bebt is the debt that you want to avoid at all costs as it will drain your cash flow, grow against you, and reduce your net worth. If you have this kind of debt, you’ll want to pay it down as fast as possible.

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