Wednesday, January 04, 2017

debt

good debt
  • the money u borrow to finance an asset 
  • an asset is sth that has value today and is expected to rise in value over time, house mortgage 
bad debt

  • any money u borrow that is not used to finance an asset
  • credit card debt is bad debt
  • car loan --- car's value never rises, but always falls, this is called depreciation
  • try to minimize how much car debt you have and aim to pay it off as quickly as possible
  • never take more than 3 years to pay off a car loan
  • do not lease a car, the leasing process makes it inevitable that you will never be in control of your car finances

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