DEBT GOOD ✅OR BAD❌ ? By Wise Chanakya
What exactly is Debt & when do you acquire it ? ????
Debt in simple terms is owning money from any institution or individual for any purpose. Just from this definition you can choose which side of the spectrum you want to be on. Let me explain a little about it.
How Debt can be Good ?
If the debt you take on HELPS you generate income and build your net worth, that can be considered positive.
Here are a few things that are WORTH going into debt*
When you invest on your education, it’s upgrading your skill set, knowledge and enhancing you as a person. Which makes you a more valuable asset in market or for your business. This assures that after completing the education you’ll be having more income and thus you will be able to improve your current situation which makes it a GOOD DEBT.
2) Your Own Business ????
You taking DEBT in-order to start a business, expand your existing business or Acquire someone else business. In short solving more problems for more people.
3) Reals Estate ????
The last is Real Estate which also fits perfectly with the Indian context as most people purchase property which is a tangible asset with their debt.
How Debt can be Bad ?
If the debt you take for Purchasing a Depreciation Asset can be classified as Bad Debt.
Here are a few things which AREN’T WORTH going into debt*
Now this may sound bad as all of us from Kids to Adults want cars & bikes to travel and also the pleasure to ride it on open roads on a Sunday Morning. But if we look at any data you’ll see that car ends up being a burden to you. We don’t discourage you to buy cars but we discourage taking it on Debt.
2) Expensive Clothes ????
Another obvious thing you use daily and spend money upon are clothes which are very important and you can’t live without it but purchasing expensive branded clothes especially on Debt is a big NO NO !
3) Consumables ????
Eating out daily in expensive restaurant and ordering from online food apps daily 3 times on credit can also end up putting a hole in your pocket. Which we highly discourage.
Having some debt is not a bad thing to have, it is OKAY to have it, but make sure that you can pay for it in time. ✅