Why is personal debt bad
Debt allows individuals to make purchase today by pledging some of their tomorrow’s earnings. Is there anything wrong with having a little - or a lot - of debt? That depends on what the debt does for you - and it should always be more than what you do for the debt. Will this debt pay me back more than what I put in? After you factor in principal repayment, interest payments and the alternative uses of that money, does the debt still make sense? Are you getting all your money back and then some? Could you have done something better with the time and money you are investing? Debt can be "good" if it has the potential to increase your net worth. Bad debt is money borrowed to purchase depreciating assets or assets for consumption. Any time you take out a loan or charge something on your credit card, you are borrowing from the money you hope to earn in the future. You never know what changes may happen in your income, so it is better not to mortgage your futur