Quote:
Originally Posted by corporatejay
I obviously can't speak for everyone in that thread, but in the context of that thread where people talked about being "debt free", I landed on the side of "well, depending on the context. I wouldn't consider someone who has a $200,000 mortgage on a $1,000,000 house to be 'in debt'" because their overall net worth is so positive. It was more a backlash against the idea that being "debt free" is the be all the end all.
|
Ah ok I see.
Yeah if you have debt but it's secured against an asset that is worth more than the debt, then the net worth is positive and that's what I think is more important to look at than just the amount of the debt.
If there was an investment that paid 10% guaranteed, who cares about being debt free, I'm going to incur as much debt as people will give me to invest (as long as the cost of borrowing is less than 10%).
I don't really consider one's own home an asset though (and definitely not an investment) since you can't just sell it and use the money; you need somewhere to live.