Good Debt vs. Bad Debt- Part 2
Happy Wednesday! I hope you enjoyed your bank holiday and the extra day off work of course! Now, back to the grindstone…
You may remember last week I explained how debt can actually work in your favour and provide you with the financial support and freedom that you crave for yourself and your family. If you missed last weeks blog, don’t panic! it’s HERE.
BAD DEBT, in a nutshell, costs you…
One of the biggest and most common bad debt people enter into is when they purchase their home. It’s not considered as good debt as you do not receive any income against it. The only saving grace is that normally property increases in value, but you do have to sell it to realise the value or money from it.
Bad debt is often described as those that drain your wealth. It takes money out of your bank account every month without repaying you. Therefore the main difference between the types of debt is:
GOOD debt puts money in your account and BAD debt takes it out!
Other examples of bad debt include:
- Buying a luxury holiday that you can’t afford
- Buying items such as shoes, handbags and gadgets that you don’t really need
- Cars, boats, bikes, etc. (unless a collectable or for your business)
- Borrowing money to pay bills
- Using credit cards for items you don’t really need
- Payday loans
By having a clear understanding of the differences between the two debts, it enabled me to reach financial freedom. I used good debt to build up assets that paid for all of my lovely cars, holidays, shoes, trips, travel etc. The luxuries, therefore, came out of good debt and assets.
It also allowed me to become a successful mentor to women and their partners for them to reach their idea of financial freedom. I have students that are able to fulfil the life they craved and desired. They have been able to ‘sack the boss’ and are often jetting around the world visiting places they only dreamt about!
If you’re ready to get your finances in shape and fulfil your life’s ambitions … why not come along to my only scheduled UK event this year.
Further details can be found HERE!
Remember some things are worth getting into good debt for while bad debt can leave you in a financial mess. Financial Freedom is closer than you think. See you there!
Live the Life you love