Good Debt vs Bad Debt

[Joe Au]

Is there a such thing as good debt?

If I have to categorize debt, I would say the debt I am paying for, it's bad debt. A debt someone else is paying for, it's good debt.

Which means, if I have a mortgage on my house and I am paying for it. It's a bad debt. 

Thought?

[David Dachtera]

Good debt is debt which pays for an income producing asset. That is, income from the asset pays the debt and leaves profit after.

Bad debt is debt which pays for a liability. The item itself produces no income and does not enhance your net worth.

The loan on your home is not entirely bad since it provides you with shelter while the equity build-up enhances your net worth at the expense of the interest you pay. The interest still provides a deduction against your taxable income, also.

My $0.02...