For
example, education debt is a fact of life for many of us but we should
view it as an investment in our future. We’d like to think it will
provide us with an opportunity to increase our future income, so that
makes it good debt. Debt for an unaffordable expensive car would be
considered bad debt since it is an unnecessary expense that provides no
income and depreciates in value. Debt for something that depreciates and
provides no income would certainly be considered bad debt. An education
is an investment that appreciates in value by increasing future income
potential... the car is a depreciating expense that will provide no
income and will rapidly depreciate in value (uses up income instead of
providing income). The expensive car may be more fun to have, but the
education will be the best investment.
