Everyone loves good debts, or at least believe they should accumulate good debts. Of course, some believe no debt would be best if one wants stability. After all, even if one has good debts such as property, one is still open to property price fluctuations during bad times. More importantly however, did we accumulate more of the good debts so that these good debts can continue to build on top of itself and your good debts continue to become better debts? Do note that savings is an extremely important element for you to tap on so that you can increase your good debt. When was the last time you saved MORE? 🙂
Property investment is a great way to accumulate good debt IF you were not simply buying and happen to buy at the highest price per sf ever thinking it will go even higher. If it does, lucky you. If it does not, you would have to restart all over again. Buying good stocks is also another way and if you bought that stock because someone told you that it will be going up very soon, I wish you luck. It’s better to understand a little bit about the company you are buying and think longer term. It should beat your FD’s return over time.
Another good debt many people talk about is education. However, in terms of education, for example a Master Degree, this is a neutral area. If you can afford, why not. Just understand why you wanted it in the first place. If you think a Master Degree will push you up the corporate ladder, think again. However, when an organisation is deciding on the better candidate when they have two, guess who would be chosen if one has just a degree and another with a Master? PHD is another thing altogether, perhaps applicable only in niche positions. Master degree is however a good plus point. Don’t believe? Take a look at the job ads for senior manager and you would understand why.
Many would tell you, education is not important. Look at many of the billionaires, so many of them were university dropouts. The only reminder I would like to offer would be to take a look at majority of those who do well today. Many of them had a faster and better start because they had a degree in the first place. Without one, you may not even get to start. Again, just look at all the job advertisements today for any senior executive positions and all the way till senior management. When I started many years ago after my first degree, my position was immediately 3 levels ahead of my senior who had only a diploma. 3 levels ahead meant I started at 9 years ahead. This is a fact of life. In fact studying for a a degree is so easy these days that if one is not pursuing one, the only reason is just laziness, nothing else.
Yes, good debt include not just investing in physical assets. It includes investing in the best asset too; yourself. Happy getting more good debts.
written on 11 Apr 2015
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