Everything You Could Possibly Want to Know About The Myth of Good Debt

Are you trying to figure out how to get out of debt?

The name of this blog is Studenomics. Most of the readers are under 30. Many readers have student debt and other forms of debt. For some reason, this idea of good debt seems to linger around.

I compared good debt to bad debt a while back. The other day I started thinking about the idea of “good debt” again because a buddy was telling me that he didn’t feel bad about owing money since he felt that he would make it all back one day soon. He felt that he had good debt.

I started thinking about debt and then I was reminded about the great comments that I received the last time I wrote about paying off debt and the idea of debt being acceptable.

This article will show you everything you could possibly want to know about the myth of good debt and paying off debt fast from your fellow readers…

Crystal wrote in:

“All debt sucks, but I don’t mind having a short mortgage. I’d consider a 15 year mortgage or less, “good debt.” Otherwise, the interest just becomes overwhelming.

I despise our car loan and am trying to kill it quickly. I’d consider car loans “bad debt” since a car depreciates so quickly and it is truly a choice most of the time.”

Another reader chimed in with some critical thoughts on good debt:

“No debt is good, unless you’re the lender.

If you’re the lender, you have the money . The money to afford all the social marketing needed to trick people into believing that borrowing money is good. The more people that believe it, the more people that will come to borrow money. You, Mr. Lender, win.”

Darren joined in with a more open-mind on good debt:

“After reading books like The Millionaire Next Door and stuff by Dave Ramsey, I’ve also come to view a car loan as bad debt. I’m now on board with most other commenters and plan on buying quality used cars in the future.

As for buying a home, I guess it depends on how much you really want something to call your own. Some people like to settle down in one place and not move around.

I’m not too knowledgeable about the history of home prices. But I’ve heard that over the long-term, prices rise. So if you want to be a part of this investment and can afford the payments, then it’s definitely something to consider.

And since I’m a college graduate with a decent job, I’d have to say that school loans are a form of good debt.

But as you mention, if you plan on starting your own business, if you were influenced to be more entrepreneurial at a young age, you might be able to save a lot of money by just digging in and getting your hands dirty.”

Brad had some more thoughts on paying off debt:

“Generally speaking I think all debt is bad for the simple fact that you OWE someone else money. However, much like Dave Ramsey, I don’t think that taking out a mortgage is absolutely wrong, but I do have a problem with paying banks interest for the privilege to do so. I’m also not fond of student loan debt since statistics seem to suggest that too many people end up with lots of debt and no real value from their expensive degree—at least not enough to justify going into debt to get.

With that said, I’ll never EVER buy another car fresh off the lot and have been quite satisfied with my paid for cars. Our house is currently under contract and once we are out of it, we will not be borrowing money for the next one, but instead saving up over 5 years to pay for it in cash. Until then we are absolutely fine with the prospect of renting to accomplish that goal. And finally, I ‘m currently going to school part-time and debt free.

I fully intend on applying for Financial Aid starting in the Fall, as I had to complete some classes before I was eligible. I will also be applying for grants and scholarships as well and see no reason to bog myself and my family down with debt just to get an education. I’m perfectly okay with the fact that it will take me a little more time to complete my degree, BUT once we are done saving our $15,000 emergency fund I fully intend on stepping up my efforts to complete my degree much faster. With no debt to speak of, and a cozy savings in place I will be in a much better position to fully engage my education without the added burden of stress due to loans and debt.”

Now I’m curious to hear from more of you guys.

When trying to pay off debt, do you believe that good debt exists? Would you be willing to pick up more debt because it’s considered good?

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