Re: Debt (Was: How much is a FICO score worth?)

On Tue, 20 May 2008 13:28:04 -0500, BreadWithSpam@[EMAIL PROTECTED]
 wrote:

>"HW \"Skip\" Weldon" <skip5700removethis@[EMAIL PROTECTED]
> writes:
>
>> An overriding objective of good personal finance is to live within
>> one's means.  By that I mean that there are no unpaid balances at the
>> end of a month - everything is current.
>> 
>> I mention this just in case someone thinks that because of our
>> emphasis on FICO scores, it is acceptable to have debt.  For the
>> record, we can make exceptions for younger folks who haven't had time
>> to pay off their home mortgage.  Beyond that, no.
>
>You seem to refuse to differentiate between good debt and
>bad debt and imply that *all* debt is bad.  It's not.
>
>The main consideration which distinguishes between good
>and bad debt is the matter of what the proceeds were used
>for.  If the debt was incurred in the course of increasing
>one's wealth - or potential future wealth - it's likely
>to be good debt.  If it was incurred in the course of
>consumption and the purchase of quickly depreciating assets
>(ie. televisions), it's likely to be bad debt.
>
>But you're certainly partially right.  Some debt is bad,
>and most *consumer* debt (ie. credit cards with oustanding
>balances) is bad.  And if someone can't tell the difference
>between good and bad debt, he probably should try to avoid
>all debt.  Just as someone who can't distinguish between
>good and bad mushrooms should probably only buy them at
>the supermarket instead of picking them in the woods.


You are entirely correct.  Would Trump be where he is without
incurring debt to finance his real estate holdings?  Would many
businesses have succeeded if they waited to receive the money they
needed to buy new facilities or even their raw materials?
It's how the debt is managed that counts.
Thumper

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