Hopefully you’ve seen my other live post on Good Debt Vs Bad Debt. If not I highly recommend that you rewatch it here: https://bit.ly/2QWkpYb
In my video I talk about good debt based on investments that generate cash flow, like for example an apartment that you rent out. In that case it’s good debt because your tenants will pay for the mortgage and, if you were able to negotiate a good deal, you should also be able to take some profits from that investment.
I always recommend to begin investing with stocks or funds because everyone can easily learn it and start right away with as little as $25 a month. People keep asking me though if they could also leverage other people’s money to increase their investment capital.
This is a tricky one because generally speaking it would be a good deal if your returns from your investment funds are higher than the interest rates you need to pay back to those you borrowed your money from.
There is still a difference to my prior example though because you don’t know WHEN you’ll be able to cash out your returns. Yet you’ll have to pay back your loan regardless. In that case I would consider it bad debt.
You can also watch my video about this topic (use Chrome browser) here:
