Gee, I don't know, $25k in student loan to make $80k at 19 years old doesn't sound "stupid" to me. Taking out $100k in debt for a job that makes $30k is stupid.
@E getting a degree without getting any debt is extremely hard to do and frankly not even possible for most people... now minimizing the debt is very reasonable but overlooked by most people too
The person who wins the lottery doesn't say it's stupid to play at the time. Doesn't mean you should start playing the lottery. This guy had a good outcome and chose a good degree to earn money with. His plan was much more reasonable and I'm glad it worked out for him, but I still wouldn't advise someone to do what he did.
@@drunclecookie216 extremely hard? No you just have to actually have a decent job and know how to work the system. Trying to get your masters or bachelors all at once is stupid and what makes it harder. Lots of pail grants, school grants from some jobs etc. that can help. If you really want to just go to school and work to pay for your associates. Get a better job with your new degree, work and save for a couple years then go back to school for your bachelors and so on.
"You don't have bills", except for property insurance, health insurance, phone bill, cable bill, gas bill, water bill, electric bill, life insurance, professional dues, etc...........
Those are just living expenses. No bills from debt and other unnecessary expenditures. I my case it was $1500 a month including property tax on a $160k salary.
Good debt pays off itself while bad debt is paid off by you! That’s it. Anything that takes away money from your pocket to get paid is bad debt. If you can leverage debt to make more $ on the side you turn it into good debt. Good video!
What 19 year old is out there making 80k a year and trying to buy an investment property??? Youre already weird, keeping being weird and dont follow this antiquated advice. ALWAYS consider risk, but this is as risk-free an investment as it gets. DO IT
You never know. This kid may have started learning HVAC around 15 or 16. Apprenticeships can be 2-3 years. HVAC Techs, at least in my area...start at $30 per hour
I bought a house and I rent out 2/3 rooms paying my mortgage. I got a HELOC and bought a house in cash that cash flows insanely. Invest when you know what you’re doing.
YES!!!!!!! I LOVE GOOD DEBT IT DOES WORK IF YOU KNOW WHAT YOUR DOING!!!!!!!!!!!!!!!!! IF THE DEAL DOES GO BAD I ALWAYS HAVE THE CASH TO PAY OFF THE DEBT
I found Dave at 24 YO. And he teaches good life long investment strategies but it won’t help you jump classes. Now in my thirties owning real estate investments I also learned if I stay only listening to Dave’s strategies I will stay in the middle class and won’t be financially independent until I’m retired.
Great response. I hate to say it but all of his advice is totally fear based. As a believer, that is not correct. Everything is based on "oh I did it and lost" or "oh this happened in the past and could happen again" and people lose our so much listening to this through and through. However I do think his advice for saving emergency funds and all that is good no matter who or where you are.
Absolutely. Dave is great at making poor people a little less poor, and teaches a scarcity mindset that keeps people poor. If you follow his advice, you will live life in fear of loss, and never really enjoy it.
his advice is useful to people with virtually no financial literacy. His advice is geared toward all debt avoidance, not creating wealth. It's frustrating how Dave tries to conflate these two things. He would probably tell someone to work a janitorial job for 10 years to make the money to pay off medical school upfront. Don't even get me started on his archaic takes on credit cards and the price of housing/cars
Bro, get the duplex and start investing when you’re making the money. Throw as much money as you can towards the principle. I don’t agree with the advice they’re giving you. I took out a mortgage and paid my house off, going against Dave’s advice to not take out a mortgage.
agreed this advice is meant for people who are not emotionally stable with finances. As long as interest rates are low i would argue debt can be good and catapult you into a good place financially. just don't live beyond your means.
I agree. but in Dave's defense, most people won't pay off the mortgage fast and never get ahead. maybe he's playing to the bigger general audience now.
Yea bro get the duplex even tho he has no money to fix it when something breaks and let's not forget it cost around 5k-10k he's gonna get 4k a month profit after paying the duplex and taxes. U guys never think a head all u think about is the profit that is not guaranteed. If he had 100k saved I would say go for it now
U see I'm a God I just watch this show for fun and when I'm bored. U guys have to watch it to listen and do what they say cause you guys have no knowledge
Good debt allows you to own assets, or improve your income, or increase output if you are a business. Bad debt is when you buy a liability or something that goes down in value.
That being said, good debt can go bad real quick if it hurts your income down the road. College kids borrowing all this money just to get shafted after they get their degree. Businesses that end up folding because the loans can't get paid during economic hardship/times of low revenue. Going into debt is fundamentally no different than handling snakes or playing with fire. Something goes wrong and you get bit/burned and like they said at Ramsey, that income gets offset by what you owe and you can even go deeper in debt if you can't make ends meet.
@marks90004 in your case thats awesome......you get sick? major car crash? child got sick? gotta take care of parents? hurricane flood your house? someone steal from your business? if not thats awesome.
Just the fact that 19 year old asks for advice already fascinates me! Kid is smart - he will be alright whatever life throws at him! (If monthly payment below 25-30% of the aftertax monthly income - it is safe to get it imho)
@@mattschmitt9924 that property is still an asset that will gain in value over time compared to buying a liability such as a vehicle that will decrease over time.
@@ItzCharlemagne double check your definition of asset vs liability. If you have something that costs money every month (and in this example, you are having trouble collecting rent, finding renters or dealing with renters that destroyed your property - I.e. reality) that would not be an asset when it is foreclosed. Also, the mortgage is set up with different terms when it is an investment property and not your primary residence.
@@mattschmitt9924 risk=reward bud. Dave is absolutely terrible of any risk if you aren’t stupid you can easily use debt to your advantage. A 2% intrastate rate on a rental house is the same as inflation so you aren’t even losing money it’s great
@@mattschmitt9924 any property that cash flowing is an asset. Thats literally the definition. As soon as you don’t make money on that property then yes it is a liability I’m not arguing that. I’m just stating the obvious. If you make more than you pay then that investment is an asset.
In the context of borrowing, principal is the initial size of a loan say for example from a financial institution. This incurs interests which the amount a lender charges a borrower and is a percentage of the principal-the amount loaned. Good debt is when you invest the borrowed money in a business that yields more than the interest charged by the financial institution and returned the money on time specified in the agreement. 😊 Bad debt is when the borrowed money was only used to buy liabilities or things that does not earned you income and failed to fulfill the obligations.
And what happens to your 'good debt' when then business or industry you invested in tanks. 2008. 2020. Or as Rachael puts it, Life. Dave simply teaches to avoid risk, and having debt is a risk.
@@MrTurner999 Millionaires take calculated risks. In running a business, the owners is almost at a risk and they accept challenges that's why they are RICH.
Student loans debt can be good and bad.. spending 160k on a sociology degree is bad as is any degree that results in you earning less than 50k. Paying 50k for a degree that will increase your income 25k a year is good debt. A degree that results in over 100k income can be good debt. Also, they always tout how they interviewed 1000's of millionaires and yet continue with no debt is good.. yet wealthy people use loans and debt all the time. It is how they become wealthier.
I figure people won't know how good or bad their student loan debt will be until they retire. I'm retired and can now say my $12k student loan debt paid off quite well. Never had any other debt but nine year mortgage. Millionaire next door by 30.
Jamie sounds like a financially responsible, intelligent dude. He may not have to follow the ramsey plan, if he did he'd be working a minimum wage job by not taking a student loan which seems like a great long term investment. I'd say ramsey plan is to avoid risk at all times, but I disagree. If you are responsible, intelligent and intentional taking some calculated risks in life may actually benefit in long term.
Overall the amount of people studying and the poor degrees they are studying and with poor recruitment, is the average person actually better off going to college ?
@@yofinance1777 Probably not, we need data to prove if college is actually helpful. In my observations though college works for anyone who is disciplined and motivated
He still should pay off his student loans first,then build n emergency fund before getting the duplex. Ignore that 15yr mortgage through 30 is the way to go with how low interest rates are on mortgages.
Goodness George and Rachel, mortgage debt on rental properties that cash flows does not steal from your income, it adds to it. Mortgage debt on a strong cash flowing rental does not steal from your income the way debt on a Silverado does. Tell the guy yes it pays you but it adds risk if you want, but at least make sense in your argument.
"From a certain point of view", all debt is good debt if your the one getting paid. For example, Sally Mae likely thinks all the debt people pay to her is good debt. "Unfair to the payor, not the payee." Pizza the Hutt (Spaceballs)
Exactly. If your debt is in rental properties that pay you more than what the debt costs than it is good debt because it cash flows more than it costs. To say that all debt is bad is just wrong. Debt is like a gun, if you are experienced and educated with it you have a great tool.
@@acedeadeye2052 There is some risk with that method. If tenants don't pay (like my evicted from everywhere deadbeat cousin) or you can't find tenant's, you could lose $. I'm not saying don't do that but that you should be prepared for the risk factor in case Murphy shows up. "What can go wrong, will go wrong" Murphy's Law Edit: Come to think of it. My home was once a rental property that was actually lost by one of its previous owners during the early 2000's housing crash by someone trying to do exactly what your talking about.
Good debt is debt that will make you money so if you refinance your property and use that extra money to by an investment property it will make you money. Bad debt is car loans, cc debt, student loans...
Not just her. A lot of people go to college debt free. I didn't (because I didn't know how), but if I had known then what I know now, it's very possible.
No such thing. Debt is debt. You can platitude the descriptions all you want. Debt free is the way to be. Dave goes over the reasons for mortgages, and also states that those who become wealthy pay their homes off as early as possible.
Yes debt is debt but some debts makes people wealthy. Some debts are better than others and if we didn't have mortgages people would poorer and the rich would get richer. Dave went broke in the 80s doing 90 day mortgages, no wonder he is scared. He did the single dumbest possible way of financing properties
Wrong. What makes more financial sense? Getting a loan to become a doctor and paying it off with a doctor's income or working for several years at a much lower wage to be able to pre-pay medical school? The opportunity cost for doing the latter would easily tally in the millions.
Good debt is nonsense financial institutions use to persuade us to buy/invest now. All debt is bad, regardless of the actual 'good' be it a profitable business, skill or asset, which can also be losers! Is it still good debt when I can't get a job with my Bachelors?
@@OTOWN2STOCKTOWN Nothing wrong with following a system or program that is working. Like in fitness or diet or other things. No need to invent the wheel every day new if it works use it, if not, change it. Daves System with the baby steps works and is simple. I am gratefull that I found them years ago.
This is where i kinda differ in values from Ramsey. There is actually good debt. However. The real issue is people categorize debt into good and bad buckets and that's the flaw and what gets you in trouble. The vast majority of debt scenarios is bad debt. You can call it leveraging. You can call it debt for school most of it is bad. The preference is no debt. Imo good debt is debt that you can pay off quickly. And one where when you paid it off your mathematically in a better state. That second point gets calculated out wrong the majority of the time. Like people talk about spread. Which actually can lead you to the wrong conclusion. You have to do a break even analysis which includes risk & opportunity costs. Most people don't do this and error with debt. If you were to.. you would rarely take a debit.
No, the culture does not call student loans “good debt.” Bad debt is debt used for a depreciating asset like a car, appliance, furniture or a risky investment like substantial student loans. Good debt is a mortgage with all likelihood that your house will appreciate at a higher rate than your mortgage’s interest rate. Is it riskier than paying cash? Sure. But it’s also a much slower way to build wealth to pay cash for everything.
Devils advocate: if every future doctor, dentist, or lawyer followed this advise, we would have little to no doctors, dentists or lawyers… to me doctorate programs are also “good debt”
We all know what Dave’s principles and plans are structured for. So if you don’t agree then do your own thing and why call in or argue on the comment section? It makes no sense.
I had zero debt. Got a $5k loan. Bought some cars to flip. Make 2k of profit a month. Payment is $200 a month. This is a side job for me. Good debt. My profit pays the loan.
This poor kid. That duplex is a great idea and if he listens to them he's gonna lose out on that great idea. Nothing is certain, doesn't mean you shouldn't do something.
good debt is what you take on in order to do what *I* want you to do, like buying whatever I'm selling. Bad debt is what you take on to satisfy your own selfish, short term whims, like renting a penthouse and three hookers in Vegas, or paying for your kidney transplant. There is no such thing as good debt. Sometimes there is debt that is less bad than what happens without it.
If you want to play the debt-investment game, you can and you may succeed. But it's really freeing to have no debt! Now, with no offsetting debt, I can invest and the investments are all mine. If some go down a bit, there's no corresponding debt to care about.
First, Jaime should pay off the student loans. Second, once those are paid, then perhaps consider saving a down payment for a two or three family home. He should live on one of the floors, to not only maintain the property, but have the other tenants pay for the mortgage. Third, if he has the ability to pay additional monies toward the prinicipal of the loan, then he should. Fourth, once the two/three family home is paid off, he can either sell it, or keep it for investment purposes. However, within keeping the home, comes the responsibility of paying taxes, in addition to, the maintenance, repair, and to replace appliances/items when necessary. Good luck Jamie !
Worst bias suggestion Good debt = buying stuff appreciates Bad debt = buying stuff that lose value Dont just listen to them Read the book rich dad poor dad Largest wealth building tool is your investment, NOT income No man can out earn investment by trading time for money (job)
The wealthy are known for their work ethic, not for borrowing money. If the opposite was true, everyone would borrow money to invest and no one would work.
In my book, there is no such thing as “good debt”. It’s simply debt, and the goal is to get out from under it as quickly as possible. Mortgages included
YES!!!!!!! I LOVE GOOD DEBT IT DOES WORK IF YOU KNOW WHAT YOUR DOING!!!!!!!!!!!!!!!!! I HAVE A LOT OF GOOD DEBT IF THE DEAL DOES GO;S BAD I ALWAYS HAVE THE CASH TO PAY OFF THE DEBT I GET A CHECK EVERY FRIDAY
Wrong! Good debt is debt that puts money back in your pocket. Bad debt is debt that takes money away from your pocket. You can get a million dollar loan and buy an apartment complex, that million dollar debt was used to generate income.
There is this "idea" on this platform suggesting that all debt is bad debt. (except mortgage). So student debt is bad debt? Okay, all prospective medical/dental and pharmacy students will have to take out a loan (except the very VERY few). By this rationale, the USA would run out of medical professionals after one generation. A young doctor graduates with a ton of debt (as sad as it is), but with the salaries doctors are getting, I can only imagine this debt to be a good debt. Once again, if all medical students who cannot attend med school without a loan, would simply not go to med school, we will end up in a HUGE crisis! Think about it for a moment...
If enough people would just buckle down , study well and make good grades in highschool, get the grand and scholarships and stick to a sensible budget..they could pay their way through medical college..yes it is possible and yes I realize it isn't a common thing these days
There is no such thing as "good debt"... It sounds like "healthy cancer". Even a mortgage is a high risk long term debt. Better start small with your house, pay off and move up over time if needed.
Sorry but this is limiting - tell Amazon and Apple who are sitting on piles of cash they were wrong to take on debt to increase their own business even though they didn't need to. Tell someone who makes 30k a year their income is going to be their path to freedom. Debt has to be structured correctly and used for the right purposes - so for improving the return and growing wealth - not spending it on consumer goods or depreciating assets.
They don't say there's good debt. Rachel even says this in the video. They say that a mortgage is the only debt that is acceptable under their guidance because houses cost so much, they don't want people putting off a house, for decades, just to buy it with cash. But, if you can save enough money to buy a house with cash, that's their ideal situation.
@@ItzCharlemagne What I don't know is what you're talking about with real estate. You should re-watch the video and show me where they say going into debt for real estate investment is good debt. They said that the only acceptable debt is a mortgage for a primary residence. Please pay attention.
@@aweisen1 there is such thing as good debt. Any debt used to pay for something that is cash flowing more than the mortgage and all bills related to maintain said asset. Remember asset = money coming in, and liability = money going out.
You guys know nothing about debt........ There are several good debt that you guys never mentioned in your show ever....... If we take debt for buying rental or comercial property or buisness or production then it is always a good debt as cash flows into your pocket through that assest and all the debt that are bound with assets nor liability is known as good debt as it helps to build wealth....... By simple means if your take debt for your personal reasons then it will always be a bad debt and of you take debt for providing service to others or building or producing something then it was/is/will be always a good debt and debt is needed for wealth building as you all know all kind of debt is tax free.
the show does not ignore basic economical math; it understands there is much more to money, and especially to financial peace which is what they teach, than basic economical math
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Gee, I don't know, $25k in student loan to make $80k at 19 years old doesn't sound "stupid" to me. Taking out $100k in debt for a job that makes $30k is stupid.
like 95% of 19 year old aren't making 80k a year
get reak
@E getting a degree without getting any debt is extremely hard to do and frankly not even possible for most people... now minimizing the debt is very reasonable but overlooked by most people too
Wrong. Ask Amy about her 280k tuba degree too. Seriously, no one should have debt from school.
The person who wins the lottery doesn't say it's stupid to play at the time. Doesn't mean you should start playing the lottery.
This guy had a good outcome and chose a good degree to earn money with. His plan was much more reasonable and I'm glad it worked out for him, but I still wouldn't advise someone to do what he did.
@@drunclecookie216 extremely hard? No you just have to actually have a decent job and know how to work the system. Trying to get your masters or bachelors all at once is stupid and what makes it harder. Lots of pail grants, school grants from some jobs etc. that can help.
If you really want to just go to school and work to pay for your associates. Get a better job with your new degree, work and save for a couple years then go back to school for your bachelors and so on.
"You don't have bills", except for property insurance, health insurance, phone bill, cable bill, gas bill, water bill, electric bill, life insurance, professional dues, etc...........
A more accurate statement would be you dont have any payments on loans.
Those are just living expenses. No bills from debt and other unnecessary expenditures.
I my case it was $1500 a month including property tax on a $160k salary.
Good debt pays off itself while bad debt is paid off by you! That’s it. Anything that takes away money from your pocket to get paid is bad debt. If you can leverage debt to make more $ on the side you turn it into good debt. Good video!
I wish I had found DR at the age of 19 instead of 39! I would probably be retired now if I did!
I'm in the same boat. I'm almost 50 now and all I can do is salvage and do the best with what time I have left.
So true. I wish.
Magic words are
Debt steal from your income
100% correct
What 19 year old is out there making 80k a year and trying to buy an investment property??? Youre already weird, keeping being weird and dont follow this antiquated advice. ALWAYS consider risk, but this is as risk-free an investment as it gets. DO IT
You never know. This kid may have started learning HVAC around 15 or 16. Apprenticeships can be 2-3 years. HVAC Techs, at least in my area...start at $30 per hour
I bought a house and I rent out 2/3 rooms paying my mortgage. I got a HELOC and bought a house in cash that cash flows insanely. Invest when you know what you’re doing.
That’s awesome man. Quick question, what websites or places do you go to buy a Duplex? I always hear about duplexes but I can’t find any
You used a heloc to buy another house ? That’s not cash
@@phreshfx Since you aren’t aware, buying a house in cash just means without a mortgage.
YES!!!!!!! I LOVE GOOD DEBT IT DOES WORK IF YOU KNOW WHAT YOUR DOING!!!!!!!!!!!!!!!!! IF THE DEAL DOES GO BAD I ALWAYS HAVE THE CASH TO PAY OFF THE DEBT
I found Dave at 24 YO. And he teaches good life long investment strategies but it won’t help you jump classes. Now in my thirties owning real estate investments I also learned if I stay only listening to Dave’s strategies I will stay in the middle class and won’t be financially independent until I’m retired.
Great response. I hate to say it but all of his advice is totally fear based. As a believer, that is not correct. Everything is based on "oh I did it and lost" or "oh this happened in the past and could happen again" and people lose our so much listening to this through and through. However I do think his advice for saving emergency funds and all that is good no matter who or where you are.
Absolutely. Dave is great at making poor people a little less poor, and teaches a scarcity mindset that keeps people poor. If you follow his advice, you will live life in fear of loss, and never really enjoy it.
his advice is useful to people with virtually no financial literacy. His advice is geared toward all debt avoidance, not creating wealth. It's frustrating how Dave tries to conflate these two things. He would probably tell someone to work a janitorial job for 10 years to make the money to pay off medical school upfront. Don't even get me started on his archaic takes on credit cards and the price of housing/cars
This kid will be a millionaire at 30 if he plays his cards right.
True , well if you get inherentenses , like the ramseys its easy to say😂😂😂 pay cash,fresh and fit is the real deal
Good debt is debt owed to you; bad debt is debt you owe others.
Bro, get the duplex and start investing when you’re making the money. Throw as much money as you can towards the principle. I don’t agree with the advice they’re giving you. I took out a mortgage and paid my house off, going against Dave’s advice to not take out a mortgage.
agreed this advice is meant for people who are not emotionally stable with finances. As long as interest rates are low i would argue debt can be good and catapult you into a good place financially. just don't live beyond your means.
I agree. but in Dave's defense, most people won't pay off the mortgage fast and never get ahead. maybe he's playing to the bigger general audience now.
Yea bro get the duplex even tho he has no money to fix it when something breaks and let's not forget it cost around 5k-10k he's gonna get 4k a month profit after paying the duplex and taxes. U guys never think a head all u think about is the profit that is not guaranteed. If he had 100k saved I would say go for it now
U see I'm a God I just watch this show for fun and when I'm bored. U guys have to watch it to listen and do what they say cause you guys have no knowledge
why would you pay it off early that makes no sense. He should invest elsewhere with the income from the renal property
Good debt allows you to own assets, or improve your income, or increase output if you are a business. Bad debt is when you buy a liability or something that goes down in value.
Until you get sick and can’t pay it. Immediately turns into a burden. Should of cash flowed it
That being said, good debt can go bad real quick if it hurts your income down the road. College kids borrowing all this money just to get shafted after they get their degree. Businesses that end up folding because the loans can't get paid during economic hardship/times of low revenue. Going into debt is fundamentally no different than handling snakes or playing with fire. Something goes wrong and you get bit/burned and like they said at Ramsey, that income gets offset by what you owe and you can even go deeper in debt if you can't make ends meet.
@marks90004 in your case thats awesome......you get sick? major car crash? child got sick? gotta take care of parents? hurricane flood your house? someone steal from your business? if not thats awesome.
@@phillipmoore6249 thats the purpose of saving money... to protect your assets.
Just the fact that 19 year old asks for advice already fascinates me! Kid is smart - he will be alright whatever life throws at him! (If monthly payment below 25-30% of the aftertax monthly income - it is safe to get it imho)
Dave / the personalities do point out when there is good debt
Debt used to purchase income producing assets, such as rental properties, is good debt in my opinion.
...until your property doesn't collect the rent...
@@mattschmitt9924 that property is still an asset that will gain in value over time compared to buying a liability such as a vehicle that will decrease over time.
@@ItzCharlemagne double check your definition of asset vs liability. If you have something that costs money every month (and in this example, you are having trouble collecting rent, finding renters or dealing with renters that destroyed your property - I.e. reality) that would not be an asset when it is foreclosed. Also, the mortgage is set up with different terms when it is an investment property and not your primary residence.
@@mattschmitt9924 risk=reward bud. Dave is absolutely terrible of any risk if you aren’t stupid you can easily use debt to your advantage. A 2% intrastate rate on a rental house is the same as inflation so you aren’t even losing money it’s great
@@mattschmitt9924 any property that cash flowing is an asset. Thats literally the definition. As soon as you don’t make money on that property then yes it is a liability I’m not arguing that. I’m just stating the obvious. If you make more than you pay then that investment is an asset.
In the context of borrowing, principal is the initial size of a loan say for example from a financial institution. This incurs interests which the amount a lender charges a borrower and is a percentage of the principal-the amount loaned.
Good debt is when you invest the borrowed money in a business that yields more than the interest charged by the financial institution and returned the money on time specified in the agreement. 😊
Bad debt is when the borrowed money was only used to buy liabilities or things that does not earned you income and failed to fulfill the obligations.
And what happens to your 'good debt' when then business or industry you invested in tanks. 2008. 2020. Or as Rachael puts it, Life. Dave simply teaches to avoid risk, and having debt is a risk.
@@MrTurner999 Millionaires take calculated risks. In running a business, the owners is almost at a risk and they accept challenges that's why they are RICH.
80k at 19 god that’s nice I was 19 making under 20k or 20 at most
Student loans debt can be good and bad.. spending 160k on a sociology degree is bad as is any degree that results in you earning less than 50k. Paying 50k for a degree that will increase your income 25k a year is good debt. A degree that results in over 100k income can be good debt.
Also, they always tout how they interviewed 1000's of millionaires and yet continue with no debt is good.. yet wealthy people use loans and debt all the time. It is how they become wealthier.
I figure people won't know how good or bad their student loan debt will be until they retire.
I'm retired and can now say my $12k student loan debt paid off quite well.
Never had any other debt but nine year mortgage.
Millionaire next door by 30.
Good debt is a term used to describe bad debt by idiots to justify their stupid purchasing decisions. All debt is bad debt.
I would buy the duplex only if you live in one half and can afford the whole mortgage on your own then the other half is gravy.
Jamie sounds like a financially responsible, intelligent dude. He may not have to follow the ramsey plan, if he did he'd be working a minimum wage job by not taking a student loan which seems like a great long term investment. I'd say ramsey plan is to avoid risk at all times, but I disagree. If you are responsible, intelligent and intentional taking some calculated risks in life may actually benefit in long term.
Overall the amount of people studying and the poor degrees they are studying and with poor recruitment, is the average person actually better off going to college ?
@@yofinance1777 Probably not, we need data to prove if college is actually helpful. In my observations though college works for anyone who is disciplined and motivated
@@yofinance1777go for stem you will not regret it
Caller: “What’s the difference between good and bad debt?”
Ramsay Show: “What’s your household income?”
Sell the car
I thought Rachel's explanation was excellent.
Rice and beans
Good debt: Debt you can get back or more
Bad debt: Debt you can partially get back or nothing
A better term probably is necessary debt and unnecessary debt. Necessary debt would be a mortgage.
This is a good way of putting it. Thank you!
Could be described as unnecessary since you can always save while renting
dont listen to them jaime! BOOMER STEPS! Get that duplex! Pay debt off faster! Like meet kevin and ben mallah
He still should pay off his student loans first,then build n emergency fund before getting the duplex. Ignore that 15yr mortgage through 30 is the way to go with how low interest rates are on mortgages.
Goodness George and Rachel, mortgage debt on rental properties that cash flows does not steal from your income, it adds to it. Mortgage debt on a strong cash flowing rental does not steal from your income the way debt on a Silverado does. Tell the guy yes it pays you but it adds risk if you want, but at least make sense in your argument.
"From a certain point of view", all debt is good debt if your the one getting paid. For example, Sally Mae likely thinks all the debt people pay to her is good debt.
"Unfair to the payor, not the payee."
Pizza the Hutt (Spaceballs)
Exactly. If your debt is in rental properties that pay you more than what the debt costs than it is good debt because it cash flows more than it costs. To say that all debt is bad is just wrong. Debt is like a gun, if you are experienced and educated with it you have a great tool.
@@acedeadeye2052
There is some risk with that method. If tenants don't pay (like my evicted from everywhere deadbeat cousin) or you can't find tenant's, you could lose $. I'm not saying don't do that but that you should be prepared for the risk factor in case Murphy shows up.
"What can go wrong, will go wrong" Murphy's Law
Edit: Come to think of it. My home was once a rental property that was actually lost by one of its previous owners during the early 2000's housing crash by someone trying to do exactly what your talking about.
People don’t like to see risk, but the ones who do, win the game.
But, those who understand risk management wouldn't need to call a talk show for advice.
Rachel is not very good at this. Misuse of the word “like” is highly annoying.
Good debt is debt that will make you money so if you refinance your property and use that extra money to by an investment property it will make you money. Bad debt is car loans, cc debt, student loans...
Yes Rachel, you could go to college without debt because your father paid for it.
Why didn't your father pay for your college?
@perotal And after graduation, her father made sure she had a job waiting for her.
@@2b4evermusical Well Dave is hardly going to have a job waiting for someone else over his own flesh and blood 🤣
Not just her. A lot of people go to college debt free. I didn't (because I didn't know how), but if I had known then what I know now, it's very possible.
@@IrishFrank22 where did I say my father didn't?
This young man has a bright future!
Buy the duplex.
No such thing. Debt is debt. You can platitude the descriptions all you want. Debt free is the way to be. Dave goes over the reasons for mortgages, and also states that those who become wealthy pay their homes off as early as possible.
Yes debt is debt but some debts makes people wealthy. Some debts are better than others and if we didn't have mortgages people would poorer and the rich would get richer. Dave went broke in the 80s doing 90 day mortgages, no wonder he is scared. He did the single dumbest possible way of financing properties
Wrong. What makes more financial sense? Getting a loan to become a doctor and paying it off with a doctor's income or working for several years at a much lower wage to be able to pre-pay medical school? The opportunity cost for doing the latter would easily tally in the millions.
We need Anthony O’Neal.
There is nothing good about owing people money
Good debt is nonsense financial institutions use to persuade us to buy/invest now. All debt is bad, regardless of the actual 'good' be it a profitable business, skill or asset, which can also be losers! Is it still good debt when I can't get a job with my Bachelors?
George is doing great. Good team George and Rachel. Keep it going so Dave can go fishing.
They are Dave's Yes men and women, too bland
@@OTOWN2STOCKTOWN Nothing wrong with following a system or program that is working. Like in fitness or diet or other things. No need to invent the wheel every day new if it works use it, if not, change it. Daves System with the baby steps works and is simple. I am gratefull that I found them years ago.
George is finding his voice.
@@MariaInIowa Exactly. I like him. He seems down to earth. Btw, you have a german name.
This is where i kinda differ in values from Ramsey. There is actually good debt. However. The real issue is people categorize debt into good and bad buckets and that's the flaw and what gets you in trouble. The vast majority of debt scenarios is bad debt. You can call it leveraging. You can call it debt for school most of it is bad.
The preference is no debt. Imo good debt is debt that you can pay off quickly. And one where when you paid it off your mathematically in a better state. That second point gets calculated out wrong the majority of the time. Like people talk about spread. Which actually can lead you to the wrong conclusion. You have to do a break even analysis which includes risk & opportunity costs. Most people don't do this and error with debt. If you were to.. you would rarely take a debit.
No, the culture does not call student loans “good debt.” Bad debt is debt used for a depreciating asset like a car, appliance, furniture or a risky investment like substantial student loans. Good debt is a mortgage with all likelihood that your house will appreciate at a higher rate than your mortgage’s interest rate. Is it riskier than paying cash? Sure. But it’s also a much slower way to build wealth to pay cash for everything.
Simple: All debt is BAD! There is no such things as good debt.
this is not true
@@tynorman7457 you are wrong. But hey, keep borrowing other people’s money….it looks good on you
Devils advocate: if every future doctor, dentist, or lawyer followed this advise, we would have little to no doctors, dentists or lawyers… to me doctorate programs are also “good debt”
Good point!
I agree
The cost of those degrees would drop drastically. Loans didn't make college affordable as much as they drove up the price.
all debt is bad; some is just worse
We all know what Dave’s principles and plans are structured for. So if you don’t agree then do your own thing and why call in or argue on the comment section? It makes no sense.
Because giving people alternative options is never an issue...
I had zero debt. Got a $5k loan. Bought some cars to flip. Make 2k of profit a month. Payment is $200 a month. This is a side job for me. Good debt. My profit pays the loan.
This poor kid. That duplex is a great idea and if he listens to them he's gonna lose out on that great idea. Nothing is certain, doesn't mean you shouldn't do something.
good debt is what you take on in order to do what *I* want you to do, like buying whatever I'm selling. Bad debt is what you take on to satisfy your own selfish, short term whims, like renting a penthouse and three hookers in Vegas, or paying for your kidney transplant.
There is no such thing as good debt. Sometimes there is debt that is less bad than what happens without it.
If you want to play the debt-investment game, you can and you may succeed. But it's really freeing to have no debt! Now, with no offsetting debt, I can invest and the investments are all mine. If some go down a bit, there's no corresponding debt to care about.
First, Jaime should pay off the student loans. Second, once those are paid, then perhaps consider saving a down payment for a two or three family home. He should live on one of the floors, to not only maintain the property, but have the other tenants pay for the mortgage. Third, if he has the ability to pay additional monies toward the prinicipal of the loan, then he should. Fourth, once the two/three family home is paid off, he can either sell it, or keep it for investment purposes. However, within keeping the home, comes the responsibility of paying taxes, in addition to, the maintenance, repair, and to replace appliances/items when necessary. Good luck Jamie !
THERE IS NO SUCH THING AS GOOD DEBT
this is not true
@@tynorman7457 Yes it is.
How about medical doctors that take out a loan and start making $250K a year out of residency. That’s still bad debt?
False
Low risk low reward medium risk can mean massive reward
The only good debt is no debt!!
Good debt other people pay it for you, bad debt you pay it by yourself. It is that simple.
One will never become very wealthy by not getting into "debt"
Good Debt should be any debt that you have to pay out of your income. If renters are paying for all your debt then that is good debt.
One exists and the other one doesn’t.
Bad debt is bad and good debt doesn’t exist
Worst bias suggestion
Good debt = buying stuff appreciates
Bad debt = buying stuff that lose value
Dont just listen to them
Read the book rich dad poor dad
Largest wealth building tool is your investment, NOT income
No man can out earn investment by trading time for money (job)
The wealthy are known for their work ethic, not for borrowing money. If the opposite was true, everyone would borrow money to invest and no one would work.
@@insideoutsideupsidedown2218 working is just for the jump start, once the money starts rolling work. Is optional
John, yes you’re right. I read rich dad poor dad and my mindset has totally changed for the better.
They're so closed minded with the idea that all debt is bad... that can't be further from the truth
They don't believe it. They just say it because Dave believes it and they won't have a job if they don't say it
@@aqm8470 yeah lol you must conform or else!
This advice is honestly for mediocres, you have to use it right.
In my book, there is no such thing as “good debt”. It’s simply debt, and the goal is to get out from under it as quickly as possible. Mortgages included
Bad debt = bad debt
Good debt= bad debt
YES!!!!!!! I LOVE GOOD DEBT IT DOES WORK IF YOU KNOW WHAT YOUR DOING!!!!!!!!!!!!!!!!! I HAVE A LOT OF GOOD DEBT IF THE DEAL DOES GO;S BAD I ALWAYS HAVE THE CASH TO PAY OFF THE DEBT I GET A CHECK EVERY FRIDAY
There is no difference. Debt is debt.
Wrong! Good debt is debt that puts money back in your pocket. Bad debt is debt that takes money away from your pocket.
You can get a million dollar loan and buy an apartment complex, that million dollar debt was used to generate income.
(facepalm)
The that's like saying poisoned water is still good water because it still lubricates the human body lol.. nice fail
There is this "idea" on this platform suggesting that all debt is bad debt. (except mortgage). So student debt is bad debt? Okay, all prospective medical/dental and pharmacy students will have to take out a loan (except the very VERY few). By this rationale, the USA would run out of medical professionals after one generation. A young doctor graduates with a ton of debt (as sad as it is), but with the salaries doctors are getting, I can only imagine this debt to be a good debt. Once again, if all medical students who cannot attend med school without a loan, would simply not go to med school, we will end up in a HUGE crisis! Think about it for a moment...
If enough people would just buckle down , study well and make good grades in highschool, get the grand and scholarships and stick to a sensible budget..they could pay their way through medical college..yes it is possible and yes I realize it isn't a common thing these days
Where's Dave????
Retired
@@dr.bradshaw ohhh no..I'm in England..I had no idea..thank you 😘🇬🇧
@@switchbladeromance1466 I was only kidding. He just doesn’t always have time to do the show
@@dr.bradshaw ohh ok..thanks Dr 😐
Did Dave retire?
There is no such thing as "good debt"... It sounds like "healthy cancer". Even a mortgage is a high risk long term debt. Better start small with your house, pay off and move up over time if needed.
Stop lying!
Yes or save up while renting
No such thing as good debt. Mortgage should be the only exception.
Good debt is the debt you paid off.
*******
To banks:
Good debt is being paid on time.
Bad debt is uncollectible.
Sorry but this is limiting - tell Amazon and Apple who are sitting on piles of cash they were wrong to take on debt to increase their own business even though they didn't need to. Tell someone who makes 30k a year their income is going to be their path to freedom. Debt has to be structured correctly and used for the right purposes - so for improving the return and growing wealth - not spending it on consumer goods or depreciating assets.
*78% of people are loving paycheck to paycheck?!*
Don't take real estate investing advice from here 😅
Debt that makes you more than it costs you is good, risky but good.
Finally you acknowledge there’s such thing as good debt..
They don't say there's good debt. Rachel even says this in the video. They say that a mortgage is the only debt that is acceptable under their guidance because houses cost so much, they don't want people putting off a house, for decades, just to buy it with cash. But, if you can save enough money to buy a house with cash, that's their ideal situation.
There is NO good debt. A primary home is likely necessary debt but it is still not “good”.
@@aweisen1 you clearly have no idea how real estate works then.
@@ItzCharlemagne What I don't know is what you're talking about with real estate.
You should re-watch the video and show me where they say going into debt for real estate investment is good debt.
They said that the only acceptable debt is a mortgage for a primary residence. Please pay attention.
@@aweisen1 there is such thing as good debt. Any debt used to pay for something that is cash flowing more than the mortgage and all bills related to maintain said asset. Remember asset = money coming in, and liability = money going out.
George is not qualified to be a Ramsey Personality. Bad personality. I'm 30. He's annoying.
Agree. I thought maybe he over time he would improve, but so far I haven’t been impressed. Rachel and Dr. Jon are the best apart from Dave.
All debt is bad
Is she too young to remember what caused 2008? News flash, it wasn’t what she said it was.
Grant Cordoned don’t like.
You guys know nothing about debt........ There are several good debt that you guys never mentioned in your show ever....... If we take debt for buying rental or comercial property or buisness or production then it is always a good debt as cash flows into your pocket through that assest and all the debt that are bound with assets nor liability is known as good debt as it helps to build wealth....... By simple means if your take debt for your personal reasons then it will always be a bad debt and of you take debt for providing service to others or building or producing something then it was/is/will be always a good debt and debt is needed for wealth building as you all know all kind of debt is tax free.
Mortgage: semi good debt. Everything else, bad.
Who this pony boy? Haven't been here since the Chris thing ha
Rachel is so beautiful.
Not sure where you are from, but around here, she is average, at best.
I like Rachel more than Dave to be honest.
Did Rachel really just make fun of people who use math🤡🤡🤡🤡 wow this show is crazy
She did not make fun of people who use math. She pointed out that people play math games and in doing so, they don't account for risk.
This show ignores basic economical math
It's not about math.
It's about addressing the problem AT THE CORE....human misbehaviour
It's not rocket science.
the show does not ignore basic economical math; it understands there is much more to money, and especially to financial peace which is what they teach, than basic economical math
They are so misinformed and stupid 😭
108th
😎👍✌👌🖖😁