You may not be aware, but there is such a thing as ‘good debt.’ Although we associate the word debt to be a bad thing, good debt can be acquired under the right circumstances. So what is good debt? Essentially good debt is an asset, or an investment that will grow in value over time. Typically good debt consists of having a plan, owing money or other interactions for a short period of time, with intent to get a higher return to make it all worth it. Here are a few examples of good debt.

Real Estate

Buying a home can be expensive, and typically people take out loans to assist them on their pursuit to purchasing a new home. When you take out a loan because you don’t have enough money to put up yourself you immediately become ‘in debt.’ However, this is a traditional real estate strategy, a process that in the long run will help you pay back your debt and hold on to even more money than you begin with. One way to do this is to become a real estate investor specializing in flipping houses, this entails: buying a house and living in it for a while before selling it for a larger profit to companies like Crawford Home Buyers (see https://webuyhousesinatlanta.com/kennesaw/ for more info), or renting out the entire residence for consistent cash flow. This can be risky, unless you know the trade well; however it is an excellent way to have good debt.

Whenever considering purposely engaging debt for the greater good, have a company such as http://www.hoyes.com/ available in the event that you require a consult and assistance on managing debt. The great thing about today is that help is always available when you need it.

Investments

In the case of investing in stocks, normally, we pay forward money that we hope will generate income, but depending on how the company of the stock is doing, it doesn’t necessarily guarantee profit. But because there is a chance for promising capital gain, this is a type of good debt. The most common investments in the stock market are: stocks, bonds, and commodities.

Education

There’s a good saying, ‘you go to school to get a good job afterwards.’ This is true, however, attending school is a bit expensive, and can put you in a hole. But a person’s earning potential increases with every new piece of information they learn as most companies hire depending on education level completion. Education can put you in long-term debt, for instance if you never pay off your loans. On the flip side of that, you have a very long time to pay off these loans; meanwhile, you may have acquired a position that will help you do so faster and once the balance hits zero the rest of the days to come are blissful with a good job to wake up to.

A higher return is well worth jumping into debt, but realize that you are in debt so have a plan to get out, and have resources to help you maintain your good debt position before you dig yourself into a deeper hole. Good debt always is a risk, it takes hard work, but work ethic pays off it great rewards. Good luck.