Debt Management Is A Necessary Aspect Of Making Your Money Work

1732 Words Oct 13th, 2016 7 Pages
Mastering debt management is a necessary aspect of making your money work for you. A good place to start on your road to Financial Freedom is learning debt management and to begin you have to know the difference between good debt and bad debt. First let me give you some definitions:

Good Debt: Any debt where the cost of the debt will be surpassed by the profits that are made by whatever it is that you took on the debt to buy is good debt.

Bad Debt: Any debt where the cost of the debt will amount to more than the profits that will be made by whatever it is that you took on the debt to buy is bad debt.

It 's that simple. When you are looking into taking on debt do not just be mesmerized by whatever it is that caught your eye. Debt management mandates that you have to run the numbers. Yes, you can finance that car and drive it off of the lot right now, but is it worth it to pay $40,000 for a $19,000 car? Even if you have to use your last $5,000 as a down payment? If your answer is yes then there is no help for you. You are incapable of debt management. Stop reading now. For those of you with the common sense to say "No" to the above question I am going to give you a jewel that was given to me by some of the best to ever do it. This jewel was dropped on me when I was sixteen years old. I was told that debt management is essential to accumulating wealth and that anybody who knows anything about debt management would never even consider putting $10,000 down on a $100,000 dollar…

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