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bad debt
vending machines
car payment
car loan
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Good Debt VS Bad Debt
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Good Debt VS Bad Debt

Lots of people know the concept of debt. Money that you essentially borrow and then have to pay back at a given time, or over payments. That is what a credit card is, letting you take home that item now and pay for it later. But did you know you don’t have to work to pay of your debt sometimes? You can have other people pay it off for you, which is good debt.

Bad debt, debt you work off

It comes down to you working at your job to pay off your debt, or someone else working at their job to pay your debt. That is the main difference boiled down to good and bad debt. We are all familiar with bad debt. Our car loan, the credit card bill, etc. Although most of the time these are needed and essential, you have to go and get a job to pay the car payment.

I have asked a lot of people if they like their job and they reply with, “It pays the mortgage.” So they aren’t liking their job, but because they are in debt they keep working to keep paying. Bad debt.

Have someone else pay your debt down

Let’s take real estate for example, because that is the most wildly known of investments. You as the investor hold the mortgage, you hold the deed to the property, but you have renters in there and they are paying down the mortgage for you. They are paying your bill every month. YOUR mortgage goes down with THEIR money. They work for it, they have the job to pay the rent on the first every month, but it is you who has your debt lowered each month.

Let’s scale this up a little bit. Lots of people think that real estate is too risky, or you can’t make money in real estate. Apartment complexes, there is someone who is the owner of that building with everyone in there paying rent to them, paying their debt down. Now that debt size is quite considerably larger than a house, but it is the concept that is the same, just with bigger numbers.

Something smaller

Ok, so maybe you don’t want to go into real estate. But think of something else, all those vending machines you see around. Someone owns them and are making money with them. Let’s say you got a loan for $1,000 and bought yourself a few vending machines and stock to put in them. Up place them around and VIOLA. You are able to have someone else pay off your debt.

Now after you use the money to pay for the merchandise to restock the machines, and then you pay your loan down, you get to keep what is left over. So it won’t be much to start with maybe, but after the loan is paid back you still get the vending machine and then more money in your pocket because other people paid your debt off for you.

Understanding good debt and bad debt is the first step in changing your life, changing your future.


Street Talk

Leonardo2  

Nice article Joshua..."owe no man anything" does not mean you cannot borrow money. it is the ability to borrow (good debt) and be able to pay as quick as possible

Reply
  about 6 years ago

Yep, it all is about knowing how to make money work for you.

Reply
  about 6 years ago

Definitely! I like the idea of calling investments "good debt".

Reply
  about 6 years ago

Yeah, because if it gets you into debt but makes you money. Then its good debt lol.

Reply
  about 6 years ago

Great article Joshua, thank you for sharing!

Reply
  about 6 years ago

Always welcome Jeff!!

Reply
  about 6 years ago
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