Good vs. Bad Debt
Not all debt is bad… in fact there are some forms of debt that are positively impactful on your financial future, help generate income, and grow your net worth.
✔️For Instance, having a primary residence with a mortgage helper that allows you to earn equity, and pay down your mortgage instead of a landlord’s mortgage can be considered good debt.
✔️Using a Home Equity Line of Credit to purchase an investment property that allows for monthly cash flow, mortgage pay down, & appreciation is good debt. The HELOC’s interest is also a tax write off.
✔️Using a line of credit to complete renovations that increase the value of your home is good debt.
✔️Although debatable, a student loan can also be considered a good debt if the eduction is used to enhance one’s financial earnings.
❌Bad debt, as you can guess includes consumer debt/consumable assets, car loan, or loans on depreciating assets like a boat. It can also include any types of loans that are high interest.
Reach out to learn more about consolidating debts 🙋🏼♂️