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Thanks for expounding on your views. In essence, it seems that we share similar opinions on debt and leverage.
Debt is a tool, just like a nail gun. You can still drive nails without the gun, but it sure takes a lot longer. Likewise, if you don't know how to use the nail gun you can hurt yourself.
Is it still called debt when you have revolving credit that you pay off before being charged interest? Say, I have a credit card that earns me 5% cash back which I choose to use instead of paying with cash. I rack up 100k each year but it's paid off each month in full, and make myself 5k a year cash rebate. Is the 100k some sort of 'unrealized' debt? Sorry, I don't know my economic terms. Well whatever it is, I guess I'm getting 'free' money off of debt at the expense of others (merchants?).
Is it still called debt when you have revolving credit that you pay off before being charged interest? Say, I have a credit card that earns me 5% cash back which I choose to use instead of paying with cash. I rack up 100k each year but it's paid off each month in full, and make myself 5k a year cash rebate. Is the 100k some sort of 'unrealized' debt? Sorry, I don't know my economic terms. Well whatever it is, I guess I'm getting 'free' money off of debt at the expense of others (merchants?).
The difference is that your not incurring "interest" unless you don't pay it off in the billing cycle...
just a note: I have AMEX blue....cash back is a great thing...
My whole business is run on "debt". By that I mean, I buy on credit, then the customer purchases at a higher price. I haven't actually used any of my money to pay for the product and it is paid off.
Seriously, the debt issue is dramatically different from a business vs a personal point of view. It seems all that is happening here is that people are talking past each other because some are talking about it from a business perspective and others from a personal perspective.
Quote:
There's a difference between leveraging debt and gambling.
Not really, many business fail because they couldn't pay their debt. They made a bet about what was going to happen in the future and it didn't work out.
Location: Georgia, on the Florida line, right above Tallahassee
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Quote:
Originally Posted by Agung
What debt are considered a good debt?
My credit card debt. I use it instead of cash. I get amazon points, which I used to buy even more crap. I pay it off every month...I get free money...well Amazon coupons. $2500 bucks on the card ='s 25 Amazon cash points.
I got like 300 free bucks last year. WOOHOOOO. I put EVERYTHING on that card. It's amazing how fast it adds up. I charge something, then go online and pay it off the next day....or the same day.. Yeah.
Seriously, the debt issue is dramatically different from a business vs a personal point of view. It seems all that is happening here is that people are talking past each other because some are talking about it from a business perspective and others from a personal perspective.
Not really, many business fail because they couldn't pay their debt. They made a bet about what was going to happen in the future and it didn't work out.
I agree.
'Business' debt is slightly different from 'personal' debt.
And yet both are still very much the same. If things turn sour, you are holding the bag and that bag is earning interest.
So all debt is 'bad'.
Some debt is worse than other debt.
Some debts at least can be a mechanism to allow you to build from.
While other debts are simply debts.
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