Debt

We all know about debt. If you don't have too much as an individual you can increase the quality of your life, but with more than you can handle it can make your life a nightmare.

There are two kinds of debt. Usually it is personal and used to buy a depreciating item such as a car or entertainment. Today a car has become a necessity, but it doesn't mean you have to buy a new one every 2 years or one that is beyond your means. It should be thought of as transportation.

The second kind of debt creates an asset that produces income that will more than pay off the debt. For a business this can be a truck, a new machine, even a new building for office or production. A person may borrow money to continue education so there can be career advancement. Money borrowed for production is very healthy.

A mortgage is a necessity and can be classified as creative debt. You have to live some place so you have a choice of rent or mortgage payments. Most everyone prefers the latter as it creates an asset as well as shelter.

Before taking on any type of debt it is wise to determine the risk. Debt creates risk. For personal noncreative debt you must consider your income that will allow repayment of the obligation especially if it is one that has no value to anyone else such as a vacation or flying lessons. Do not borrow money to go to the racetrack or gamble in the stock market. The first consideration when borrowing is what will happen if I can't make the payments? Will what I have purchased have any remaining value that can be sold to reduce the balance remaining?

If the balance cannot be repaid you want to do everything possible to avoid bankruptcy as that can haunt you for the rest of your life. Debt consolidation is sometimes a solution. For a business there is a preliminary bankruptcy that allows the court to appoint a special manager to watch over even run the business until it is back on its feet or declared defunct.

The world as we know it swims in a pool of debt. Business today could not survive without some form of borrowing nor could the consumer have all the conveniences that make living a pleasure - washing machines, TVs, air conditioning, garage door openers, can openers, computers just to mention a few most of which are obtained with the help of a credit card.

Keep in mind the 2 kinds of debt - the kind that creates an income producing asset and the kind that does not. You must decide how much of each you can afford.

There is nothing wrong with debt as long as it is used intelligently.

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.

Copyright 2005

al@mutualfundstrategy.com; 1-888-345-7870

---

Budgeting and Debt Management

Debt management (specifically unsecured) is the first step to taking... Read More

Repair Bad Credit Yourself

In March 2005, the U.S. financial services industry succeeded in... Read More

Can You Escape the Trap of Ever Growing Debt?

It's difficult not to be concerned when facing numbers like... Read More

British Families and Debt

There is current concern from the Bank of England that... Read More

Eight Ways to Consolidate Debt

Next to winning the lottery, a debt consolidation loan is... Read More

The Bankruptcy Code Acknowledges the Validity of the Homestead Exemption

Many times the subject of bankruptcy seems baffling in its... Read More

Reduce Your Debt

Do you want to reduce your debt? Having trouble paying... Read More

Whatever You Do....Dont Save Money!

No, that's not a misprint. Even though falling interest rates... Read More

Credit Counseling ? Signs That You May Need Help

Credit counseling is a viable option for those who are... Read More

Bouncing Back from a CCJ

Should you be unfortunate enough to face a CCJ ?... Read More

You Can Make Financial Resolutions Anytime

The New Year often brings with it a desire to... Read More

Learn The 15 Debt Elimination Steps You Must Take Immediately!

What Everybody Needs To Know...Learn The Truth About Debt Elimination... Read More

The Effects of Consumer Debt

Consumer Borrowing Consumer borrowing in the UK has now crashed... Read More

Fast Track Out of Debt

You go to the mail box and scan - a... Read More

Debt Collectors; And what you can do to Get Them Out of your Life

FTC opinion letter on validation Section 809(a) of the FDCPA,... Read More

Senate Passes New Bankruptcy Law

The United States Senate passed a law on March 10,... Read More

Debt Consolidation Versus Debt Negotiation

Debt consolidation versus debt negotiation are two options that are... Read More

What the Mail on Sunday Said

Anyone considering Bankruptcy may have experienced fear after reading an... Read More

Worried About Debts?

Having trouble paying your bills? Getting dunning notices from creditors?... Read More

Out of Credit Card Debt - Without Filing Bankruptcy

To be out of credit card debt is your dream... Read More

Assess Your Financial Attitude and Eliminate Your Debt Forever

Want to know if your attitude towards your finances is... Read More

Is My Credit Card Debt A Problem?

For most Americans, credit card debt is a dangerous and... Read More

Bankruptcy As An Option

If your financial worries are preventing you from sleeping at... Read More

Eliminating Credit Card Debt

The overwhelming task of eliminating your debts can often seem... Read More

Life After Bankruptcy

Bankruptcy and Credit - What Happens After Your Debts Are... Read More

Slowing Spending - The Key To Your Debt Plans Success

Anyone who embarks on a debt reduction program should know... Read More

Debt Free Living - 5 Tips To Get Out Of Debt

A few times I wonder what sort of credit system... Read More

Personal Bankruptcy ? If Its Unavoidable, File Now

The Bankruptcy Abuse and Consumer Protection Act, signed into law... Read More

Five Major Ways to Save Money

There are two main roads to improving your personal finances:... Read More

What Does A Bankruptcy Trustee Do?

Once you file bankruptcy a court appointed bankruptcy trustee will... Read More

Personal Bankruptcy: Last Option To Legally Stop Bill Collectors

Do you have stacks of unpaid bills?Are you in debt?Are... Read More

Your Secret Weapon... A Budget

For many, the word 'budget' immediately sends shivers down the... Read More

The Simple $10 Debt Elimination Solution

Ask a friend what resolutions they made for 2004 and... Read More