Good Debt vs Bad Debt - What You Need to Know? Good Debt vs Bad Debt: What You Need to Know?
shared by varnamadhukar94 on Nov 18
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Good debt is a debt for getting product/service that has the potential to increase its value with time. As a thumb rule, if it increases your net-worth or value, it is good debt. The right amount of g...
ood debt can increase your net worth, value, and help you get the things that you want in your life without taking unnecessary risks.
On the other hand, if you are borrowing money to spend over depreciating assets or liabilities, it is bad debt. Bad debt tries to lure people for instant gratification. However, they do not create any significant long-term value. Try to avoid getting bad debs for luxury products/services or borrowing high-interest rate money.
Finally, there’s no fixed boundary for defining good and bad debts. A good debt for one can be bad for another, depending on their financial situations.
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