Beware of Using Other People’s Money–The Good and The Bad

Credit instruments like; student loans, mortgages, lines of credit, car loans, and credit cards are neither good or bad. What determines the goodness or badness of these instruments is the debt generated by using these tools.

Debt is our obligation to repay borrowed money used to buy things today with money we will have in the future. A good use of debt would be to purchase items or services that create value or produces future wealth. A bad use of debt would be to purchase items that decrease in value and take away future wealth.

Borrowing money to increase our future earning power would generally be a good use of debt. While a higher level of education is not a guarantee of future wealth, should be a wise investment.