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Originally Posted by 8sPOT
I don't think there is good debt. There is bad debt and then less bad debt. I get that debt is utilized to grow a business or invest for the future. However, I am saying that having $100,000 capital readily available for these investments is better than paying someone to borrow for however long.
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Where do you get that $100,000 in capital?
Quote:
Originally Posted by 8sPOT
I understand that you can borrow at 4%, then invest at 9%. Some would say that is good debt, but now you have diminished your 9% return to 5%. Wouldn't it be better to not borrow and invest at 9%?
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Would it? Do the math. How long would it take you to save $100,000 to invest? Compare the two, I borrow $100,000 and invest at 9% return and pay 4% interest, you save for x years and then invest at 9% with no interest. How much will we each have after 20 years? 40 years?
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Originally Posted by return to the red
Just thought of something. If you have rental properties but carry a mortgage on those properties would you concider them debt still or an investment?
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It's still debt; money borrowed and payed back over time. It's also an investment; something purchased for the purposes of increasing value or generating revenue.
It's also debt that someone else is paying for you.