Turning Bad Debt into Good Debt


Examples of Good Debt

Good debt is generally debt that attracts a tax deduction because it has been used for a tax-deductible purpose such as acquiring an income-producing asset like a rental property or shares. In our current low interest rate environment that may not sound like much but it has a dramatic effect over the longer term.

Mortgage bond debt

Mortgage bond debt typically falls under the “good” debt category because it helps you maintain a strong credit history and there are tax benefits for your investment, which can be tax-deductible. Your house is also an asset that can appreciate over time and real estate ownership helps you build wealth.

Your education

Your education is considered “good debt” because they often have low interest rates, they may be tax deductible, and they’re an investment in your future earnings. Over a lifetime, the typical college grad will earn $1 million more than the average high school graduate, according to the U.S. Labor Department. To continue reading click here…


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