20 Dec

“Good Debt” versus “Bad Debt”

General

Posted by: Garry Grewal

There’s good debt and bad debt and the difference lies in whether it helps or hurts the pursuit of our financial goals.

Some debt can be seen as assisting one’s financial future:

1. Borrowing money to maximize retirement savings.

2. Loans with tax-deductible interest to earn investment income.

3. Borrowing to acquire an asset that may increase in value, such as a home or a rental property.

4. Student loans that enable us to get an education and lay the foundation for a career.

However, other types of debt can be a drag on future opportunities:

1. Revolving consumer debt with high rates of interest, such as bank credit cards or retail store cards.

2. Borrowing funds to buy something that has little or no future financial value.

3. Cash advances on credit cards; interest is charged from the date of advance – there’s no grace period.

To get rid of your bad debt or to arrange good debt, please call me at 416-674-5626 or send me an email: garry.grewal@dominionlending.ca