There are bad debts and there are good debts. Bad debts- loaning money to buy a car that won't be used for business ( Uber, Bolt). Loaning money to buy a pair of shoes, clothes, a piece of furniture etc.
Good debts - loaning money to purchase something that would appreciate in value over time. Real estate, precious metals, commodities etc.
They say poor people have bad debts and rich people have good debts.
One of the popular pieces of advice you'd hear in the Bitcoin space is to never borrow to invest in it.
Despite the volatility, our hope is that Bitcoin will appreciate in value.
Would you classify borrowing money to invest in Bitcoin as good debt or bad debt?
This topic has been worn down countless times, although it is a very welcome one as it talks about the difference between what poor people use debts for vs what the rich people would use their debts out of.
Simply put, if you've read Rich Dad Poor Dad by Robert Kiyosaki, you'd be well informed that poor people go on debt for liabilities, while rich people go on debt for assets. Poor people take loans and buys stuff that would make them look rich, cars, better house, phones, the latest gadgets and clothes, all that stuff. And when the rainy day comes, they don't have money left for themselves, they're forced to either take out another loan or sell these purchased items which have already diminished in value, and then the cycle continues.
Rich People on the other hand, buys stuff that would make them really rich. properties, commodities, stocks, bonds, anything that appreciates in value, a Rich man would buy it. Now, the magic happens when they take out a loan, as they are essentially making the bank pay for their capital, to make them profit. They take out these massive loans not to buy the latest gadgets and all that, but to buy multiple points of profit that they will then use to pay off the debts they owe the bank, and then from there they basically start smooth sailing.