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How good is our debt?

This is from Robert Kiyosaki. Its about some debts are good debts and others are bad.

How debts are bad is obvious. The use of credit card to purchase goods that cannot produce any income is an example. It is reported that in many countries the number of people who bankrupt because of credit card debt increases every year. Some people are not bankrupt but paying the debt for years. The bad debts suck a person money and make the person has less money to invest.

Good debts are debts made for acquiring assets. They are good because the asset will produce income ie increase the wealth of a person. As an example, a person make a $100,000 loan to buy a house. The house then will generate two types of income, (1) increase in the price of the house over time and (2) income from rent (assume this is a house for rent).

This Robert Kiyosaki opinion reminds me to opt for good debt and to minimize bad debts!

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