Monday, 10 October 2016

Bad Debts VS. Good Debts

Bad debt is debt that makes you poorer, such as credit card debt, car loans, and more. This is the type of debt used to buy liabilities.

Good debt is debt that makes you richer, such as a loan for investment property or to purchase equipment for your business that will make you a return. This is the type of debt that is used to buy assets.

Personal loans, business loans, consumer loans, car loans, student loans, mortgage, credit card loans etc. etc. At some point of our lives we are buried with BAD DEBTS or GOOD DEBTS, frankly speaking, I myself been into the bottom. My student loans, personal loans, credit card loans piled up in the past.

I'm thankful that I'm almost cleared with those loans and getting clean. The truth, I only took loans for necessary things and for emergency purposes and good reasons.

Here are some of my  "GOOD DEBTS" ;

First, Student Loans for my "Master's Degree". This is not an easy decisions to pursue a Master's Degree especially if you are planning to take it abroad. I got 30% discount from tuition fee and did not pay the rest of amount until after 6 months of graduation, few months left and fully paid. Here is a video of my experience HULT LIFE .

Second, Condo / Mortgage . I got a 5.4 % interest on my condominium loans which I think the lowest interest rate from the bank 5 years ago. I did not pay for any downpayment and the bank directly paid for whole amount of the unit. There are few year's left for the mortgage loans but currently "Tenants" pay for my amortization in the bank.

1BR Unit

Third, Personal Loans. I used the bank's money for my projects such as PAM PSE TRACKER  (stock market app) , iProsper App  (budgeting app) and other investment opportunities. Some of the projects already recovered the initial investments and now I'm collecting the fruits of the project.

You can carry a loans, if you have assets paying for it. 

Try to manage your debts at a level that you can pay it at any moment.

Looking forward to your financial freedom.

Sincerely yours,

Jonathan I. Ruiz

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