The Difference Between Good And Bad Debt Could Change How You Build Wealth Forever

Most people are in debt and staying poor while the rich are still in debt but getting richer. Here's how. So there's two different types of debt. One is bad debt and one is good debt. Now, good debt is used to buy assets. Assets are things that put money in your pocket. Bad debt is used to buy liabilities. Liabilities are things that take money out of your pocket. So an example of an asset would be I go and get a mortgage, which is debt, to buy an apartment building or a single-family home that I'm going to rent out. Ultimately, the tenant, is going to pay for that debt plus pay me a profit. So that is considered good debt. It's being paid by somebody else. The asset is appreciating. The value of the debt is going down because of inflation, and that is considered good debt. And that is how the rich get richer. Now, on the bad debt side, this is your credit card debt, your car payment, your primary residence even. This debt takes money out of your pocket. It does not produce income for you. And poor people in the middle class generally acquire liabilities which is bad debt, takes money out of their pocket, while the rich are taking out good debt, which is putting more money in their pocket.