Have you ever had a financial planner create a “financial plan” for you?There are two types of people in this world: those who understand debt and those who don’t. The majority of people don’t.
There seems to be a fascination in America about becoming debt-free. It comes from the talking heads on TV who either don’t know what they are talking about or do and are putting one over on their viewers.
Good Debt vs. Bad Debt
Simple example of bad debt?
Credit card debt is bad debt because it has a high interest rate and it’s not deductible. It is always a wise move to pay off high interest non-deductible debt before allocating money to build wealth for retirement.
When is good debt good?
It’s good only when you have the discipline to use the money you otherwise would use to pay down debt to build wealth elsewhere. If you are going to take the extra money you could use to pay down debt and waste it instead of using it to build wealth elsewhere, you would be better off paying off your debt (even good debt).
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