Debt Management Strategies

[Derek Loveland]

Any recommendations regarding information pertaining to debt management? The more I read and listen to, the more I realize there are multiple approaches to debt management. The predominant minset I've carried most my life is debt=bad, get rid of it as soon as possible. However, from what I'm gathering, it doesn't sound like that would be the best approach when investing in real estate.

[Steve Vaughan]

Not all debt is the same.  Bad debt = bad.  Bad debt = credit cards, vehicle loans, personal loans. Debt on things that depreciate in value.    

I have however taken a personal loan or 2 to buy property and make great returns.  Installment or revolving debt in general, especially if not used to buy good assets.

Good debt can be good.  We'd all love to have no debt someday, but a fixed rate 15 or 30 yr mortgage at around 5%, sometimes with small tax benefits even, to own an appreciating asset can be good. 

Personally I have zero consumer debt and run about 50% LTV on my portfolio. But that's been paid down over time. I wouldn't borrow more than 75% on anything and have good reserves always. 3 months of expenses per. Good discussion!