Across the world debt is viewed as a bad word and something to be avoided. The truth is to truly build personal wealth a person must embrace dept. In saying this I stress that not all dept is good.
To be able to utilize dept to your advantage to build personal wealth you must first identify the types of dept. Debt can easily be separated into three group:
- Good Dept - dept that can earn you money, (eg: mortgage margin loan)
- Bad Dept - dept that depreciates (eg car loan)
- Really Bad Dept - dept that rapidly depreciates (eg credit card)
Understanding the types of dept is critical in building your personal wealth. Now that we have identified them you must now move towards removing really bad dept and bad dept and increasing good dept for our advantage.
To be able to utilize dept to your advantage to build personal wealth you must first identify the types of dept. Debt can easily be separated into three group:
- Good Dept - dept that can earn you money, (eg: mortgage margin loan)
- Bad Dept - dept that depreciates (eg car loan)
- Really Bad Dept - dept that rapidly depreciates (eg credit card)
Understanding the types of dept is critical in building your personal wealth. Now that we have identified them you must now move towards removing really bad dept and bad dept and increasing good dept for our advantage.
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