Read carefully! Because this is a very important topic that costs people fortunes throughout their lives.
Most grown up people live in debt almost their entire lives:
It starts with loans to fund their education.
The moment they finish and get a job, they don’t just pay off their debt but usually even increase it to enter a higher lifestyle. They buy a car, a house, and new furniture because they figure that they’ll be able to pay it off with the next raise of their salary.
While their salary is often just enough to pay for all the monthly expenses, quite a few people take on some more (i.e. credit card) debt for their short term pleasure, be it the latest entertainment equipment or a vacation.
The dangerous part is that all that debt is taken on for things that depreciate in value. The most common example for this is probably the car loan as it’s usually the highest.
When it comes to their homes most people believe this must be good debt because they are acquiring an asset. While it may be true that your home is (or may some day become) an asset it’s still a liability that takes money out of your pocket.
To fully understand this I recorded a live the other day that you can watch here (use Chrome browser):
If the video doesn’t play you can also watch it directly on Facebook.