Good vs. Bad still an ongoing story
- B.J. Yoder: Young Money
- September 21, 2022
- 582
This has been an ongoing story since the beginning of time and will not stop until the end of time. Good versus bad can reach back to David and Goliath and stretch all the way forward to Batman versus Joker. It’s a timeless classic that we love to see in movies — who is going to prevail in the end?
Whether the villain’s plans to take over the city get foiled or the damsel in distress gets rescued, we always want the good to prevail. We also want to see the good in our lives, but are we making the decisions to back that up? We can see good versus bad in movies and stories, but it can apply to the debt in our lives as well.
When people hear the word “debt,” it immediately brings a negative connotation. I know it does for me, it beckons stress, anxiety, and the feeling of being trapped. If there is bad debt, of course that means there is a thing such a good debt. Good debt includes rental properties, a home mortgage and a business loan. I love the way Investopedia defines it – “Good debt is a loan that has the potential to increase your net worth.” I recall asking someone who was older than me if I should go into debt if it is considered good? His reply was simple and to the point — “Yes, because it’s just that, good.”
Debt is a scary thing to willingly enter. One guy was talking to me and he told me how much he hates debt, probably because of the scars from student loans, and he knew that buying a house, when he could afford it, was good debt. He finally bit the bullet and bought the house, and has not regretted it since, I’m guessing because of the appreciation of value that a new house brings to its first owner. Good debt can and will be as stressful as bad debt, but if you’re going to go through that stress, you might as well benefit from it, right?
The most controversial portion of this is student loans. College debt can be worth it sometimes, but along with it comes a lot of regret. The Washington Post reported that about 27% of college graduates actually get a job in the field that they studied in college. I know I am not part of that 27%, but I am still glad I went to college because I was able to experience things and have doors opened to me that wouldn’t have been possible otherwise. College debt will be another article, but for now, it can be a good or bad debt, it all depends on the situation and truthfully, the major. There is no point in putting yourself $50,000 in debt for a major that is worthless, that would be considered bad debt.
I know Dave Ramsey preaches to never, ever, no matter what, go into debt. That’s why it almost pains me to write this article, because I am such a staunch believer in him, but there are some things that just aren’t do-able without debt. Going through college without debt is manageable because I did it myself, but like I’ve said before, most of us do not have $150,000 cash to drop on a house when it’s time to go out on our own. Buying a car without debt is accomplishable, but cash-flowing a rental property is next to impossible as a young person.
Think about what kind of debt you’re currently holding. Mounting credit card debt, going out and buying a brand-new car with 100 miles on it, and vacations that are out of your budget are obviously bad debt. The first step is getting rid of the bad debt before you even think about the good debt. I would never recommend going into debt if you don’t want to, but like I mentioned before, good debt is just that, good.
Holmes County native BJ Yoder is an insurance agent by day and a finance enthusiast by night. This column is for informational purposes only. He can be emailed at benjamin.john.yoder@gmail.com.