Good Debt Bad Debt
There are broadly, two types of debt. You have the good debt which is broadly used for investing in yourself and in the future in the belief that it will prove beneficial in the long term for us and our families. The bad debts are the more frivolous debts which might be for buying a smart new car, a new tv or on holidays and vacations.
The good debt could be for learning a trade, investing in your business or borrowing a student loan to enable you to improve your education. Good debts offer the opportunity to have a better life in the future for you and your family.
The bad debts are money borrowed to treat yourself and enjoy life now but the cost is to be paid in the future. Buying a big tv on a loan now is all very nice for life today but you may still be paying for that tv long after the tv has gone to tv heaven and you will be needing to buy another tv to replace it.
Whichever type of debt you are considering you should always look at the costs and make sure you can afford the loan. You may feel happy to go without other things to invest in your future but starving yourself to get a new tv is not a sensible option.
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