OutOfDebtBlog.com

Some people ask: “Is debts a good or a bad thing?” Good question! Let me answer it by asking another question: “Is a breadknife a good or a bad thing?”

In the hands of someone wanting to slice a loaf of bread - a breadknife is definately a good thing. But in the hands of a cold-blooded killer it’s a bad thing! Everything can be used and abused. This goes for debts as well.

Had you asked me a few years ago whether debts were good or bad I would have said bad. Instantly! Most debts are bad - but some debts are good indeed. Confused? Let me explain:

Bad debts takes money out of your pocket. This is what makes consumer debts, credit card debts, personal loans, car loans and the mortgage on your house a bad debt.

Good debts put money into your pocket. How? Well - a mortgage on a buy to let property is a good example of a good debt. You buy the property, rent it out, and your tennant pays your mortgage and the expenses on the property. Meanwhile the property will most likely increase its value (over time all property does).

Unfortunately most people has only got bad debt. The kind of debt it’s hardest to get rid of as well!

Later this week I’m going to share with you a technique I have found that will help me get started on my journey to a debt free life. Using it - most people can clear their bad debts in 5-7 years. I recon I can have mine cleared in 2 years. I can’t wait!

Technorati Tags: Definition of debt, Bad debts, Good debts

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