A-Train Finance

Financial debt is something that millions upon millions of people across the globe are dealing with. Unfortunately, it is only getting worse. Fortunately, all debt isn’t bad and there is such a thing as good debt. I’ll go into detail about what the difference is and why. Opinion varies on this topic, but since this is A-Train Finance and I am Anthony (The A-Train) you’re going to get mine.

Debt is good if it is going to do one of the following things for you:

1. Provides for you a greater return than you are currently paying on it
   -(See 0% Balance Transfers - Loan the banks money back to itself)
2. Provides a tangible necessity such as a car
   - Questionable. Taking out a $50,000 dollar loan so you can get that $60,000 BMW is not included.
3. A mortgage or home loan
   - Houses over long periods of time typically appreciate (grow in value). The hope is that you will get back more for your home than you paid for it over the years.
4. Educational & Student Loans
   - You are making an investment in yourself and your future (hopefully enabling you to earn more income than had you not made that investment.
5. Business loans
   - See #1. If you think you can provide yourself a better return on your money than investing it in another company then you should do it. Your gains are only limited by your performance.

Debt is bad if it has the following conditions:

1. If the interest is higher than 10%
   - ie: credit cards, credit cards, credit cards
2. If the debt was to purchase something intangible once you use it: It’s gone. Never appreciates in value.
   - food and drinks, utilities, rent(?), vacations, plane tickets, etc.
   -putting your tab at the bar on a credit card that you can’t pay off is a mistake - you’ll pay for more than you can afford and it will cost you twice as much.
3. If the amount of debt you have is generating less interest than you are being charged
   - If you’re paying 20% interest on a credit card and you’re making 5% in your savings account, what should be your priority?
4. If the debt is spent on things you don’t need. Flat screen TV’s, video games, extra expenses that you would not normally incur.
   -Paying with credit means paying MORE for what you buy.

Has your debt been naughty or nice this year? I hope that if you have debt you have more good debt than bad but if not, there are ways you can help. Just check out the ATFAS to start getting yourself on the right track right now. My motto is ‘Start now, get there faster.”