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Sure if you want to discuss personal versus investment then its a different concept.
But the point is simply this, which would you rather have?
A. Assets producing no cash flow with a current value of $200,000 and no debt.
B. Assets producing positive and growing cash flow with a current value of $1 million and $600,000 of debt.
I'll take the $200K clear, with no interest, no debt servicing costs, no lienholders lurking with legal power to attach my assets, and no day-to-day necessity to successfully and profitably maintain my business liquidity.
And since this discussion is about starting at square-one, and not with a million in assets already presumed to have been earned, I would never go into a $600K debt on your promise that someday I'd have a guaranteed million dollar asset as a happy result, no matter how incompetent my business or investing skills..
So the point is not "simply" as you described it. Life would be so easy if everyone was a better-then-average businessman. Spoiler alert: You do not get $400K ahead on borrowed capital without some kind of risk exposure, and not everyone who tries it succeeds.
Ditch the debt you can, start over, it will take you just as long to pay off the debt as it would to regain your credit standing. Interest rates will kill you. Put all the extra money in a shoe box under the bed until the collectors go away. Open a savings account after a few years. Good luck
Oh, and don't buy anything else unless you NEED it, no wants for several years unless it's under $5, like a good cup of coffee.
The good thing about Capitalism is they forgive bad debt after a few years because they need you to be a consumer.
Above all: Change bad habits, read good books, learn from it and you will be happy once again.
Make a complete list of all of your debts, include everyday expenses, such as gas.. at the bottom you will have a number for your monthly debt column.
Make a T-Bar.. spread sheet:
Debt Name - Budget - Actual - +/-
you have four columns... make one for each month
example:
rent 500 500 0
phone 200 100 100
credit card 50 100 -50
=========================
750 700 +50 This plus amount is money you budgeted, but did not use, use
this 50 for payment towards another debt. In your list, you need to make sure you include, gas, groceries and little things
right down to the penny... you will be amazed when you get this filled out. I had set our budget up exactly like this, included EVERY penny we made and we are and have been completely debt free, yet I still stick to my budget for grocery, etc... The savings accounts have grown.
Find out how much you bring home each month, use that as the amount going out... use a line for savings, that way you are now a bill also... it may take awhile, but... once you have it laid out, you will like it.
If you take the above advice then do not assume any more debt as the interest rate will really kill you.Bascially the key is what you see people doing now plus changing your use of debt to your advantage in the future.Then you will be the well qualified borrower gettig that 0% interst auto loan while using what you would have paid to build more welath. You also will be the one saving huge amount when you fiance a home especaily with the changes coming which will either eliminate your as a homebuyer or cost you dearly in the long term interest payments and mortagge insurance. Credit is not the problem as the weathiest use it all the time as well as busineses. Its the use to your advanatge that matter in your life.
I got a 0% interest loan, as a matter of fact my loan gave me interest until I bought my car with cash.
I simply loaned my self the money out of my savings. I made a car payment to my self for 2 years and wallah, cash for a new car, interest plus!!!!
Sure if you want to discuss personal versus investment then its a different concept.
But the point is simply this, which would you rather have?
A. Assets producing no cash flow with a current value of $200,000 and no debt.
B. Assets producing positive and growing cash flow with a current value of $1 million and $600,000 of debt.
Your dead on when it comes to investements. I am just thinking that within this thread the OP is meaning consumer debt, maybe a personal residence, a car and paying off student loans. Sure I will take that debt with the income. That is not bad debt to have. Consumer debt or debt that doesn't make any money are to be avoided if possible.
I got a 0% interest loan, as a matter of fact my loan gave me interest until I bought my car with cash.
I simply loaned my self the money out of my savings. I made a car payment to my self for 2 years and wallah, cash for a new car, interest plus!!!!
This is what I do as well. I save up every month putting money into investments as sort of an upfront car loan, then when I have enough to buy my car, I cash in and buy my car for cash, then I start the process all over again.
People say they can't afford to buy a car for cash but yet can afford a car payment to a bank for 3,4, or 5 years makes no sense. If you can afford the monthly car payment to a bank, you can afford the monthly car payment upfront to yourself. Why pay a bank interest after you buy, when you can pay yourself ahead of time and have someone pay you interest instead. An added benefit is the repo man can't take that brand new car away from you. You own it.
To the OP, you are young and lots of younger people are in debt. As you get older and make more you can climb your way out of it. Good luck.
Your dead on when it comes to investements. . . . Sure I will take that debt with the income. That is not bad debt to have.
Has Willy702 guaranteed you that if you take the 600K debt, you'll make the million? How does he back it up? Do you trust his assurances that it will work out for you? How many of us can Willy float, if our investment of our borrowed start-up doesn't yield the results he has promised?
Maybe Willy is so sure of himself, that he will wire-transfer me the $600K, so I can invest it and make the million he is so sure I will earn. I promise to pay him back when I hit the million mark. Really, I do.
Has Willy702 guaranteed you that if you take the 600K debt, you'll make the million? How does he back it up? Do you trust his assurances that it will work out for you? How many of us can Willy float, if our investment of our borrowed start-up doesn't yield the results he has promised?
Maybe Willy is so sure of himself, that he will wire-transfer me the $600K, so I can invest it and make the million he is so sure I will earn. I promise to pay him back when I hit the million mark. Really, I do.
Why don't you do it yourself? Why would I or any sane person invest in anyone with a fearful mindset who wouldn't take a calculated risk?
Sure this is related to investments, but its a mindset. A mindset that has people believe paying down a mortgage is such a wonderful thing. I personally think its a stupid thing and get berated for saying such things. But I always get back to thinking how did we get a populated with such poor education? They really sleep better making an investment which they can't easily access and rarely generates a positive return compared to their other choices. Yet they have the nerve to tell me they are doing smart things with their finances. What happens if these people lose their jobs and the next payment comes due and they can't make it? Can they ask their bank nicely to give them back the extra principal so they can keep current on their payments?
I guess they are probably right because they are too financially illiterate to to figure out how to safely invest money that earns a return which beats low-rate mortgage interest which they are probably are getting a tax deduction on. Better not to tempt yourself, give the bank (or more likely your mortgage servicer) your extra savings and have them reduce their risk in your loan. They ABSOLUTELY love you for it and show their love by charging you $10 a month to keep your money in their institution and charge you 15-25% on your credit cards when they can borrow money at less than 1%.
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Put all the extra money in a shoe box under the bed until the collectors go away. Open a savings account after a few years. Good luck 
