Debt has a bad reputation – wrongly. It depends on what for.
⚠
Placing debt
Good debt
Investing in the future
Create valuehome, education
Benefitabove the interest
Long termit pays off
Bad debt
Consumption on credit
Lose valueright after buying
Pay longfor what's used up
High interestmakes it costly
The rule of thumb
Value or consumption?
Create valuea loan can make sense
Consumptionbetter from savings
Rulevalue before consumption
Affordability
Can I bear it?
Affordabledon't burst the budget
Reservefor a rate rise
Overreachingmakes it dangerous
Good to know
Is your debt healthy?
💡 First step: Not every debt is bad: good debt creates value and is affordable, bad debt finances consumption at high interest. The decisive question – am I creating value or financing consumption?