Comments on: Good Debt vs Bad Debt

By: Investing Smart

Investing Smart — Fri, 17 Dec 2010 06:21:27 +0000

[...] Good Debt vs Bad Debt | youngandthrifty.ca | Investing Smart – investing vs paying off debt[...]

By: young

young — Tue, 03 Aug 2010 03:14:31 +0000

@Dolla Thug- honey, I’m super anti-debt too, but I think it’s a necessary evil (e.g. mortgage debt) unless you win the lottery or something, unfortunately. You’ll pay off your student loan debt in no time, I’m sure. Personal Finance Bloggers are pretty good with their money =) Tracking your net worth or your progress is a great way to do it (and post it online) because it keeps you accountable. That’s what I’m doing and I think it works. =P

By: Dolla Thug

Dolla Thug — Tue, 03 Aug 2010 02:45:29 +0000

I definitely understand your argument, but I’m just so anti-debt that the idea of “good debt” just doesn’t convince me. I understand that credit card debt is “worse” debt than student loan debt, but I’m currently in the process of paying off my student loan debt because it’s DEBT. It’s an obligation that I OWE to someone and I can’t WAIT to pay it all off (both federal and private). One day……

By: IRA Beneficiaries – How To Safeguard Yourself and Family

IRA Beneficiaries – How To Safeguard Yourself and Family — Fri, 30 Jul 2010 09:51:20 +0000

[...] Good Debt vs Bad Debt – Young & Thrifty [...]

By: Yakezie Alexa Challenge Roundup

Yakezie Alexa Challenge Roundup — Sun, 25 Jul 2010 18:39:30 +0000

[...] and Thrifty gives us a rundown on Good Debt vs Bad Debt with a few examples and [...]

By: Link Love Round-up: July 23rd (the 99th post edition) | Paying Myself

Link Love Round-up: July 23rd (the 99th post edition) | Paying Myself — Sat, 24 Jul 2010 01:14:34 +0000

[...] Young and Thrifty, there is a post about good debt versus bad debt in the context of (Canadian) income taxes (and reminds us that realistically, despite some debt [...]

By: young

young — Wed, 21 Jul 2010 02:37:04 +0000

@Financial Cents- Thanks for your comment. I do agree that a principle residence can be good debt, but I find that generally a lot of investors do not consider it so, I suppose because a) it doesn’t churn out cash flow and b) it might not necessarily increase in value. I personally would rather categorize a principle as good debt (hey you know me, I’m planning to buy a place here in Vancouver!) but I think I would have gotten a bigger backlash if I categorized it as that. =P

@Little House- that’s a good way to put it- “less toxic”, thanks! Good point re: credit bureau calculations too!

@Barb Friedberg- Yay! thanks for including it in your round up. Really? you can deduct the interest in the states? I need to get my butt down there lol. You can only do that here in Canada if you are using a portion of your home to make money (like rent out the basement suite).

@Mich- Yes, Good Debt Bad Debt Worse Debt! Yeah, credit cards are just ridiculously bad for you (if you don’t pay them off). Thanks for visiting!

By: Mich @BeatingTheIndex

Mich @BeatingTheIndex — Wed, 21 Jul 2010 02:27:21 +0000

Y&T,

There should be a worst debt category for credit cards and loan sharks exclusively!

Good debt can potentially be a loan taken in a low interest rate environment for investment purposes. I guess, the end result would decide in which category to place that debt =)

Cheers!

By: Barb Friedberg

Barb Friedberg — Wed, 21 Jul 2010 00:16:17 +0000

Hi- Like the article so much it’s going in my round up tomorrow.. But, I don’t agree with the idea that a home mortgage is “bad” debt. I don’t know if it’s true in Canada, but in the US you can deduct the interest on the loan on your tax return. Nevertheless, I wouldn’t recommend getting a loan that’s too big! Regards, Barb

By: Little House

Little House — Tue, 20 Jul 2010 16:09:41 +0000

I think your overall statement is correct, all debt is bad, period. However, if you do have debt, then categorizing what’s less toxic is a good way to decide what to pay off first. I agree that student loan debt is less toxic and car loan debt is more toxic. So paying the car loan off first makes sense. Also, I think that credit bureaus calculate student loan debt differently than revolving debt when calculating a credit score. I haven’t been able to find detailed information on this one, but based on my credit score, they must be factoring in my student loan debt differently. I also agree with FS, leasing a car is silly, even if you can write it off.