Bad Debt vs Good Debt

Ever found it so painfully ironic that you need job experience to get a job? Well, debt can be the same. You need to have debt to make debt. But, let’s have a look at good debt vs bad debt.

 

Good Debt:

Good debt is a great example of “It takes money to make money”. Good debt assists you in generating income and increases your net worth. Examples of good debt include:

  1. Education
  2. Small Business Ownership
  3. Real Estate
  4. Investing

 

 

Bad Debt:

Bad debt can be determined by answering the following question; “is this going to go up in value or generate an income?’

 

Examples of bad debt include:

  1. Clothing accounts and consumables.
  2. Cars
  3. Credit cards
  4. Loans

While some debts are necessary and have higher reward than risk, some risks just aren’t even worth taking. Some necessary debt most people make that fall under ‘bad debt’ is a car. The value decreases with every kilometer yet it is something that has a high reward. Public transport expenses work out more than having to pay for your own petrol and you have an asset. Bonus.

 

Even the best of debts still has its risks. Investments can quickly go sour and you have the risk of losing all the money you invested.

 

The important questions you need to ask yourself before taking on more debt is ;

Do I really need this?

Can I genuinely afford this?

Is the reward higher than the risk?

Is the interest rate reasonable?

Is this the best price I could’ve gotten?

Should I get a second opinion?

 

Contact Us

5 + 13 =

Vermeulen Attorneys
5.0
powered by Facebook
Cindy-lee Payne
Cindy-lee Payne
2018-10-15T10:50:14+0000
would like to thank Kaylee and Cathleen for an awesome service. friendly and very professional. would definitely recommend their serviceread more
Chandre Greeff
Chandre Greeff
2018-01-22T17:54:57+0000
Geraldine Bruce
Geraldine Bruce
2018-01-21T14:46:21+0000
Mervyn recently assisted me in a case against one of the largest financial institutions. I had really run out of options and Mervyn's knowledge and expertise convinced me right away that he was the one I wanted on my side. Mervyn and his team worked tirelessly and professionally to conclude the matter and I am extremely grateful my 3 year nightmare is finally over. I would definitely recommend Vermeulen Attorneys.read more
Christopher Evans
Christopher Evans
2018-01-14T10:09:01+0000
I am very impressed with Mervyn's professionalism, and willingness to go the extra mile. Vermeulen Attorneys have really outdone themselves in assisting me in a very trying time.read more
Cathy Foster
Cathy Foster
2017-05-18T11:06:03+0000
I have been using Vermeulen attorneys for more than 3 years in my business. I have had nothing but excellent service and regular feedback on all my cases. I highly recommend them.read more
Liyana Van Heerden
Liyana Van Heerden
2017-04-05T12:58:04+0000
Excellent feedback and Results. Vermeulen Attorneys handle all our outstanding accounts and have always proven themselves worthy of settling payment in the shortest of time frames. Their rates is affordable from small to big operating companies. The give excellent feedback so you always know where your case is standing. Glad we started working with them as they are saving us a lot of trouble and money.read more
Rina Snyders
Rina Snyders
2016-09-14T07:57:34+0000
WOW! Vermeulen Attorneys is nothing short of AMAZING. They handled my case so professionally and made sure justice was served. I am so grateful to have a lawyer like Mervyn represent me. Thank you. Your work is exceptional.read more
Daniela Pucci
Daniela Pucci
2016-08-02T14:22:30+0000
Cannot thank Vermeulen Attorneys enough for the wonderful services delivered from start to end. Due to your attentive & professional advice received on the matter, this created a preferred environment for ones difficulties in any situation. Thank you! this ensured a we underwent kept every attribute to the situation.read more
Pieter Van Rooyen
Pieter Van Rooyen
2014-02-09T17:09:33+0000
Lorraine Sigasa
Lorraine Sigasa
2014-02-04T23:49:12+0000
Bianca van Heerden
Bianca van Heerden
2014-02-04T11:36:33+0000
Next Reviews
Share This