Friday, December 08, 2006

Who say debts are bad?

Do you aware there are good debts and bad debts? Good debts are debts taken out on assets that will increase in value such as properties, business or education. Be careful guys, not every debts taken for properties, business or education are good debts. The debts become good only if the investment return is higher than your debt interest.

So, what are bad debts? Do I still need to explain more? Ok ok, I still explain. Debts that are taking out to buy things that do not appreciate but decrease in value are bad debts. Am I really true? I’m not 100% right too. Buying car could be a good debt if you know how. Huh? Don't get me wrong buying car for business but it is for personal use like what you usually do. I will post more on that in the next post. Stay tune.


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