“Whether your debt is good or bad depends on the type of debt, the reason you owe it, and whether you can afford to repay it. When used the right way, debt can help you manage your finances more effectively, leverage your wealth, buy things you need, and handle emergencies” (John Ventura and Mary Reed from Managing Debt For Dummies).
While debt can cause you to be stressed, it can also help you build wealth. Why is that? Well, all debts are not equal. There’s a difference between good debt and bad debt. Good debt helps increase your financial net-worth whereas bad debt decreases it.
Good Debt can help you…
• Build your family’s financial net worth
• Invest on a business to make money for years to come
• Invest in yourself in order to increase your earnings potential and to develop yourself personally and professionally. Student loans are a common example of this kind of debt.
Bad debt can be a negative force in your life when you…
• Go into debt to buy nonessential goods or services that do not increase your wealth and have no lasting value. Examples may include restaurant meals, groceries, clothing, personal items, and vacations.
• Have a high interest rate debt and make low monthly payments. By the time you pay off the debt, the amount you pay in interest exceeds the value of the product or service you financed.
• Borrow money from dangerous lenders such as advance fee lenders, payday lenders, and writing checks against your credit card that you struggling to pay off in full.
Your Financial Freedom begins in your MIND. Don’t let bad debt control your life. One of the best ways to use debt effectively is to invest it into a business or something that will give you an ongoing return on investment (ROI).
Ready to break free from Bad Debt and feel more in control of your finances and your life?
Let’s get started now! Visit CoachJamesJustin.com and request your free coaching session!