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Posted by HW \"Skip\" Weldon on November 4, 2006, 9:18 am
Heard yesterday that Kiyosaki distinguishes between good and bad debt.
I doubt that I will agree that there is any such thing as good debt,
but for the record, does anyone know what he means by the term?
-HW "Skip" Weldon
Columbia, SC
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Posted by Rich Carreiro on November 4, 2006, 10:11 am
> Heard yesterday that Kiyosaki distinguishes between good and bad debt.
> I doubt that I will agree that there is any such thing as good debt,
> but for the record, does anyone know what he means by the term?
I don't know what Kiyosaki specifically meant by it, but
debt to buy an *appreciating* asset (home, human capital (i.e.
training, college, etc.)) is often considered "good" debt, as
opposed to debt used to buy depreciating assets (cars, consumer
electronics) or outright consumables (eating out, fancy vacations, etc.)
is often considered "bad".
--
Rich Carreiro rlcarr@animato.arlington.ma.us
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Posted by joetaxpayer on November 4, 2006, 10:29 am
HW "Skip" Weldon wrote:
> Heard yesterday that Kiyosaki distinguishes between good and bad debt.
> I doubt that I will agree that there is any such thing as good debt,
> but for the record, does anyone know what he means by the term?
>
> -HW "Skip" Weldon
> Columbia, SC
>
In one example, he offers a credit card with $2000 spent to impress a
fellow student (bad debt). Alternately, the same guy buys a pickup truck
and uses it working with the local fire department, who, of course "pays
him promptly". Remember, he's a big advocate of real estate as well, so
debt to leverage return is what he'd consider "good". I'll generalize to
say any debt that is used for income producing assets may (depending on
return) be good. [I am not advocating the position, just summarizing my
take on Kiyosaki's]
Time to recall the Robert Allen best seller, 1983's "Creating Wealth",
and "No Money Down".
JOE
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Posted by Will Trice on November 4, 2006, 9:43 pm
HW "Skip" Weldon wrote:
> Heard yesterday that Kiyosaki distinguishes between good and bad debt.
> I doubt that I will agree that there is any such thing as good debt,
> but for the record, does anyone know what he means by the term?
I can't believe I've reduced myself to quoting Kiyosaki, but just for fun:
from http://www.fictionwise.com/ebooks/eBook2521.htm
'"There is good debt and bad debt. Good debt makes you rich and bad debt
makes you poor." Most people are loaded down with bad debt and many
others live in fear of debt and are proud to be debt free... even to the
point of being free of any good debt... my wife, Kim, and I retired
young and retired rich because we were deeply in debt, deeply in debt
with good debt, debt that made us rich and financially free. In other
words, we used the power of leverage, we did not abuse the power, nor do
we live in fear of its power.'
-Will
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