Not All Debt Is Bad!

It's easy to say that all debt is bad.

I mean really, who wants to owe money?

No one does!

A point perhaps that we learn at an early age. Don't acquire too much debt, it'll ruin your credit!

But you know...not all debt is bad! A point investing in Real Estate has taught us (at least some of us anyway). I'll refer to Investor and REALTOR® Benjamin Bach over at Agent Genius for a little more emphasis where he tells us,

“Only borrow money to pay for things that increase in value” - Seth

Like Real Estate for example. Where many an investor has bought low and sold high using other people's money (a.k.a. financing via a mortgage).    

People will often subscribe to one of two schools of thought here:

1. Pay off your mortgage debt as soon as possible, and
2. Leverage your mortgage to the hilt and use it to accumulate wealth via a side-fund

I'm not going to argue whether one is better than the other because frankly, every one is different. Some people like the Mortgage Accelerator Program, other's don't. One isn't better than the other. I guess what I'm saying is that mortgage debt helped you buy the home in the first place. That mortgage debt was tax deductible at the end of the year... That mortgage debt is a good debt!

Don't you think?

Comments

[Tyler, The Wealth Creation Guy]

At the end of the day, I think it's all a matter of suitability. For some folks, it's just risky to leverage your home and mortgage the most out of it. For others, it's a strategic move and makes tons of sense.

I'm extremely careful on who I recommend taking on more mortgage debt. If someone's a spender, they'll always be a spender. If someone's a saver, they'll have much more safety, liquidity and a larger rate of return by carrying a mortgage.

There's a couple of 'revolutions' happening in the mortgage industry right now. It will be extremely interesting to see if one wins the popular vote. Right now, the U-First program is extremely popular. But it's also a pyramid scheme.

Just my two cents ;) Great post. I know you're an extremely good resource on this subject.