You may have heard of debt being categorized as two types: good debt and bad debt. “Good” debt is defined as money owed for things that can help build wealth or increase income over time, such as student loans, mortgages or a business loan. “Bad” debt refers to things like credit cards or other consumer debt that do little to improve your financial outcome. These are oversimplifications. The distinctions between “good” and “bad” debt are a lot more nuanced.
It’s worth revisiting this topic and understanding the new rules of the debt game. While student loans and mortgages can be used successfully to build wealth or increase your income, that isn’t always — or necessarily — the case….