Is the real estate industry declining? Despite all the industry gurus crying wolf, it is still a lucrative industry for the average middle class person to invest in real estate. Debt is good is what many advocate. So what exactly is good debt? Good debt is when this type of debt helps you leverage your current assets and helps to increase or supplement it.



An example of a good debt is when you take a mortgage and buy a house. The house will only increase in value due to the market conditions. Hence when the risk of taking a loan is supplemented with an equal or increased rate of return, it is considered a good debt.



Finance gurus advocate that in modern times, most people cannot live without debt. Without, a strategic plan in place, most middle class families cannot afford a house or a mortgage.



Look at it this way, instead of dipping into your savings, you can borrow from the bank and buy a house or a car. A house would, of course, work out better than a car as the house will increase in value. Also, when taking a loan for a house, it is also tax deductible.



Hence, if used wisely, a good debt only goes to increase your portfolio and having a good financial plan in place will help protect the golden nest egg for your retirement.

 

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