"'O God!' I screamed, and 'O God!' again and again; for there before my eyes — pale and shaken, and half fainting, and groping before him with his hands, like a man restored from death — there stood Henry Jekyll!" – from “The Strange Case of Dr. Jekyll and Mr. Hyde”
“The Strange Case of Dr. Jekyll and Mr. Hyde” is a well-known example of a psychiatric disorder, commonly known as split personality.
Split personality is a mental disorder that is characterized by “at least two distinct and enduring identities or dissociated personality states that alternately control a person’s behavior”.
There is a very similar “character” suffering from split personality in the world if money…
Debt.
Debt has two very distinctive sides, one is evil and destructive (like Mr. Hyde), the other side is constructive and one of the most important tools for building wealth (Dr. Jekyll). Two completely different sides to the same coin.
Thus… “The Strange Case of Good and Bad Debt”.
Let’s discuss the “Mr. Hyde” of debt… bad debt.
If the debt is created simply to spend on consumption—a vacation, jewelry, or shoes that you charge on your credit cards—then that is bad debt. Even the car loan that you write a check for each month is bad debt.
Bad debt is debt that you pay for out of your own pocket.
Bad debt tends to be more emotional and impulsive, much like Mr. Hyde.
Good debt would be the Dr. Jekyll of debt.
A good business person may borrow money to grow a business. That debt is good debt if it is paid back out of the positive cash flow of the business.
When you purchase a rental property, you will most likely have a mortgage or loan on the property. If you manage the property well, then the rent from the tenant pays the monthly mortgage payment. That is good debt.
Good debt is debt that someone else pays for you.
Like Dr. Jekyll, good debt requires rational thought and some education before it can be used safely and as a tool for building wealth.
Debt itself is not good or bad. That determination is based on how the debt is used and who pays the debt off.
If the debt is used to buy an asset that makes you money and can pay itself off, then that is good debt. The more you use good debt the faster you will become wealthy.
If you are not sure how to acquire good debt or how to use it, then let me introduce you to my survey. This survey will help you find the best instructor, course or even coach in an area YOU are interested in. It might be real estate, or stocks or even business.
To good debt,
Robert Kiyosaki
.jpg)