Quote:
Originally Posted by octothorp
No such thing as good debt. There's such a thing as necessary debt, which should be based on a serious valuation of goals and the amount of risk you're willing to assume to reach those goals. It's a valuation that should include far more than a simple financial bottom line. For someone who values higher levels of education, student loans are going to be a necessary debt; for someone who values home ownership, a mortgage is likely going to be a necessary debt. I can't say one is a good debt and the other bad, any more than I can say one is a good set of values while the other is bad.
Consumer (credit card) debt is almost always unnecessary debt, because it is the simple accumulation of debt without contributing to satisfying any goals in one's life.
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I really disagree with the bolded part. Any debt incurred to make an invested with an after tax, risk-adjusted return significantly higher than the cost of the debt is good debt, as it increases your net worth dramatically.
As someone said earlier in the thread, how much would you borrow at 6% if you had a guaranteed 10% place to invest the money. For me, the answer to that question would be, "As much as I could." I appreciate that different people have different levels of comfort with debt, but painting all debt as bad debt is overboard, imo.