Good Debt vs Bad Debt: Understand the Difference
You may have heard that debts are classified into two types: good debt versus bad debt.
Understanding the distinction between good debt and bad debt is crucial as it can empower you to make informed financial decisions.
Good and bad debt is more complex than it may seem. Understanding it requires a more profound understanding making the most of your financial situation.
What is Debt Really "Good"?
Debt can be considered ‘good’ when used to generate wealth or increase income. However, this is not always the case and depends on various factors that must be carefully evaluated.
Student loans are necessary for many low to middle-income Americans who wish to finance a college education. Still, as we all understand, not all college programs are created equal. The general rule is that you should only borrow what you expect to earn in your first year on the job.
"While student loans, mortgages, car loans, etc., can contribute to financial growth or increased income, it's not always the case. Understanding how to leverage this debt effectively relies on various factors."
- Adriana Johnson
