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Topic: Bitcoin Investment: Good Debts vs Bad Debts - page 11. (Read 1451 times)

full member
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Every part of life has benefits and drawbacks. For the average person, carrying some debt has become the standard.
While the majority of people are in debt, it is critical to recognize that not all debt is made equal. Debt, when used irresponsibly, can have disastrous financial repercussions, but when managed properly, it can also be a tool for wealth creation.

You may find yourself in a situation where you must pay. The payment is greater than the asset's value because it is stretched out over a long period of time at a high interest rate.

Taking on too much bad debt at this time may make digging yourself out of a hole later on more difficult.
legendary
Activity: 3500
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Poor people have hard time living, and they are barely able to buy things that rich do not even care about when buying. Just to give an example, buying the latest iphone is a stupid move for a poor person, why would you spend that much money on a brand new phone, there are a lot cheaper options, right?

But buying 10 brand new iphones would not even move a dent in a rich persons wallet, they do it, they live like that, they buy a new phone every time the old ones memory ends, instead of deleting photos, they buy a new one, they are that rich. So, it is normal that rich people only get a loan for smart stuff, but poor people have to get for bad stuff as well, it's normal.
hero member
Activity: 1540
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If you owe money, you're in debt. It's as simple as that. However, I do understand your point of view that taking a loan to purchase a property is something that is likely to result in a positive outcome in the future, while going into debt in order to buy expensive furniture could be considered reckless by some and doesn't have any prospects of flourishing financially in a few years.

You should also take into account that not all purchases can be conducted without receiving a loan; buying a house with cash is impossible for the majority of the population nowadays, thus, a loan is required. Buying expensive items that you don't necessarily need usually doesn't work, and if you can't afford them, you shouldn't buy them.
hero member
Activity: 966
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There are bad debts and there are good debts. Bad debts- loaning money to buy a car that won't be used for business ( Uber, Bolt). Loaning money to buy a pair of shoes, clothes, a piece of furniture etc.

Taking a loan to buy a car is not a bad idea even if if it is not for  ulber. it is only bad when their is no meaningful purpose of having a car or not having any plan on how to pay back the loan. If I'm very sure I can pay back in a specific time then it is not bad for me. Having my personal car will bring more opportunities for me and to make movements to be vety easy for me to get to any distance or location at anytime. Not having a car deprive people from having their preferred job because of distance and it also limits one from doubling the hustle by getting other side jobs.

Taking a loan to buy car is not bad if only one understands why he or she needs a car and if the reason is sensitive to play a good role in everyday of life.
sr. member
Activity: 350
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There are bad debts and there are good debts. Bad debts- loaning money to buy a car that won't be used for business ( Uber, Bolt). Loaning money to buy a pair of shoes, clothes, a piece of furniture etc.
Taking loan to do whatever you want to achieve either to invest or for ceremonies is not a bad debt,when you have a salary job,because the loan will be deducted from your salary bit by bit which might not have an effect on your income. Taking loan becomes a problem when the person doesn't have a monthly income or a salary job that can help him pay up the loan before the time duration elapses, if he is not investing the money. For,instance you take a loan to get married to your wife without you having a job,you have done a great harm to yourself.

Would you classify borrowing money to invest in Bitcoin as good debt or bad debt?
Taking loan to invest in bitcoin is a good decision if you understand the market and bitcoin movement but if you don't understand any of these, it becomes a risk for you because of volatile nature of bitcoin. Let's take for example,bitcoin halving will be experienced next year and if by early next year,you take a loan to invest in bitcoin to pay back by 2026. This is a good loan because after bitcoin halving, the bull run comes in and at 2025 bitcoin price will get to ATH. When you sell off your investment you can make much profit and pay back your loan still have enough funds with you to start a new bear market
full member
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actually debt is a bad thing or it could be the other way around. what to avoid or what? Okay, to answer this question, we first need to separate debt based on use and benefits. The first is bad debt and the second is good debt. Bad debt is easy, debt is used for consumption matters, now there are also many types of consumption here, ranging from basic needs to debt just to fulfill lifestyle, it's as simple as this. This bad debt is like us borrowing money from our future income to fulfill present desires.

Debt Whether it's debt that is used to make, buy or learn something that can get our new income in the future. The value and benefits of this type of debt give us the opportunity to own useful assets and create new sources of income in the future. Like investment.

If we return to the first question, are all bad loans or vice versa? If we look at it from a financial perspective, it's okay to do bad debt or good debt as long as we can calculate the risks and our ability to pay in the future.
sr. member
Activity: 903
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There are bad debts and there are good debts. Bad debts- loaning money to buy a car that won't be used for business ( Uber, Bolt). Loaning money to buy a pair of shoes, clothes, a piece of furniture etc.

Good debts - loaning money to purchase something that would appreciate in value over time. Real estate, precious metals, commodities etc.

They say poor people have bad debts and rich  people have good debts.
Not all poor people have bad debts, because there are some poor people who make debts to run a business, even if only on a very small scale. While the rich do most of them have good debts, but there are also those who are rich who make bad debts even though it is not at all burdensome to pay and does not make him fall into poverty immediately because of these bad debts.

Quote
One of the popular pieces of advice you'd hear in the Bitcoin space is to never borrow to invest in it.

Despite the volatility, our hope is that Bitcoin will appreciate in value.

Would you classify borrowing money to invest in Bitcoin as good debt or bad debt?
I think this really depends on everyone's principles in assessing and classifying borrowing money for something. For me it is really not suitable to invest from borrowed money because it will really bother me to invest calmly and free from the burden of debt that I have to pay off when it matures. So I would be happier if I invested with my own money without getting involved with a loan, especially since the investment is in Bitcoin
sr. member
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There are bad debts and there are good debts. Bad debts- loaning money to buy a car that won't be used for business ( Uber, Bolt). Loaning money to buy a pair of shoes, clothes, a piece of furniture etc.

Good debts - loaning money to purchase something that would appreciate in value over time. Real estate, precious metals, commodities etc.

They say poor people have bad debts and rich  people have good debts.

One of the popular pieces of advice you'd hear in the Bitcoin space is to never borrow to invest in it.

Despite the volatility, our hope is that Bitcoin will appreciate in value.

Would you classify borrowing money to invest in Bitcoin as good debt or bad debt?

   -   If I can afford to pay the debt, I can do that to buy Bitcoin and hold it until it reaches the value I want before I sell it.
And I can consider it as a good debt.

That's why it seems that most people borrow because they have emergency purposes, or as you said, other reasons. And I also don't see anything wrong if the loan is sold for bitcoin as long as it is paid properly to the person who borrowed it.
legendary
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I do not distinguish bad debt or good debt because that is a debt that I have to pay at all costs. Borrowing money is not recommended because you will be in trouble if things don't go according to your plan. But if you're calculated and ready to take the risk, borrowing money to start a business or invest in bitcoin is not a bad idea.

I also used to borrow for business and failed, so I do not support anyone borrowing money to invest, but I would not ban someone if they know what they are doing, and even if they fail, they still have a different way of handling it. Borrowing money is not the problem.
legendary
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Every investment is subject to risk. Bitcoin appreciates in value, which is the belief. However the market isn't the same as traditional market where it is possible to make closer prediction. With bitcoin and other cryptocurrencies we were able to experience wild changes in no time. As stated rather than investing on car and other luxury things to make life comfortable it is good to invest on bitcoin and with the profit invest on car, properties etc.

In my locality primary focus of people is to have an own house. Later slowly they buy a car and have some jewels which helps in emergency. Now only slowly awareness given and the same will result in more people getting interested into investment over savings.
legendary
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One of the popular pieces of advice you'd hear in the Bitcoin space is to never borrow to invest in it.
~
Would you classify borrowing money to invest in Bitcoin as good debt or bad debt?
You already said this:
Good debts - loaning money to purchase something that would appreciate in value over time. Real estate, precious metals, commodities etc.
Now you are asking if borrowing money to invest into Bitcoin is considered a good debt or bad debt? What is your definition of good debt? You said that when you loan to purchase something that would appreciate in value, it is considered good debt right? Why asking for Bitcoin when it also appreciates in value?

Volatility you said? Isn't Real Estate, Precious metals and commodities volatile? Bitcoin is just more volatile than those 3, but their price is decreasing and increasing as well. Now to answer your question, I consider borrowing money to invest into Bitcoin a good debt because the price of it appreciates. I tried this already just a few months ago when Bitcoin is at it's bottom. I got a loan from a cooperative here, and I'm paying it monthly. To cut the story short, I'm now in profit because of the price increase of Bitcoin.
full member
Activity: 785
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I'm not sure if the people here agree on the idea of ​​borrowing money to invest or not, the use of financial leverage is not always successful when we do not have the knowledge and skills to operate it properly. indifferent way.
However, from the perspective OP is talking about, I see the problem that the OP is asking, but let's see here as I said before, financial instruments will bring both good and bad things. for the economy. And the problem is sometimes the applied cognitive behavior of people.
hero member
Activity: 2786
Merit: 578
Would you classify borrowing money to invest in Bitcoin as good debt or bad debt?
This is actually a good argument to be talked about. But before classifying it as either, it depends to the person who had made the loan. If that person doesn't have other source of income and any means to pay the loan but just relying to bitcoin then I can say that it's a bad debt.

Calculating all of the interest rates until the price increases for bitcoin and then the time of selling, I guess that profit won't be that much or could just be break even.

There are bad debts and there are good debts. Bad debts- loaning money to buy a car that won't be used for business ( Uber, Bolt).
I quite disagree that all Loans taken to buy car not use for Uber/bolt is a bad debt. I can get a car for person use say, I need a car for my daily transportation to work place, as the daily transit fee is accumulating then it is wise debt to just take a cooperative loan to buy the car and then pay back through salary or wages.
I get the point on this and being comfortable with your commute is a good reason for you to take a car. And if you value your comfort, it is not a liability if you get a car loan.
hero member
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Debt is just what it is, either way. Due to some unforeseen circumstances, a good debt can become a bad debt. The car being bought for business purposes could get stolen or something else, but God forbid. I am just trying to say that if we are in debt, it's definitely required that we repay the loan, and if the results we expected in our business to enable us to repay the loan are not what we are getting, it can result in a bit of a challenge in repayment of the loan. But I'm curious why someone would take out a loan to buy clothes and shoes.

OP, I get your point, which makes me think that "Taking a loan to acquire more liability is not a good economic plan" should have been the title of your topic. For example, when someone takes out a loan to buy a car, they will need money to buy fuel, money to buy engine oil, money to repair the car, etc.

Taking a loan to do business is not bad, but using a loan to acquire more liability for oneself may even add more debt to the person's financial stability.
full member
Activity: 657
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Would you classify borrowing money to invest in Bitcoin as good debt or bad debt?
From your analysis of your point of view, I think it will be difficult to judge whether the debt is good or bad. Because that investment will not be completely profitable and not entirely a loss. This market fluctuates over time, there are people who come to it to make short-term big profits but still lose money, but there are also long-term investors who are not too concerned about debt to invest. Which I think we need to have knowledge and experience to invest in Bitcoin, smart enough to make the right investment decision.
hero member
Activity: 672
Merit: 855
There are bad debts and there are good debts. Bad debts- loaning money to buy a car that won't be used for business ( Uber, Bolt).

I quite disagree that all Loans taken to buy car not use for Uber/bolt is a bad debt. I can get a car for person use say, I need a car for my daily transportation to work place, as the daily transit fee is accumulating then it is wise debt to just take a cooperative loan to buy the car and then pay back through salary or wages.

A loan should be considered bad loan when the loanee doesn’t have any means of livelihood or income and then takes the loan to acquire materialistic things or spend them on ceremonies.

Despite the volatility, our hope is that Bitcoin will appreciate in value.
Would you classify borrowing money to invest in Bitcoin as good debt or bad debt?

It is not entirely bad to take loan to invest on ROIs but the major problem with investment like bitcoin is the lack of certainty of when the dump will occur. If the loan becomes due for payment and we say the bitcoin market is still bearish, the pressure to pay back the loan will definitely cause the loanee to sell of the coins at a loss.

Bitcoin is assured to grow in profits when it is hodl for a very long term, so the ability to have patient to hodl for long will be from money that wouldn’t be need in short term. So the duration of the loan repayment will determine whether it is a bad or good debts
legendary
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They say poor people have bad debts and rich  people have good debts.
Rich people borrow to invest in assets, poor people borrow to invest in liabilities.


Good debts - loaning money to purchase something that would appreciate in value over time. Real estate, precious metals, commodities etc.
All these are examples of the investment that the rich make with the money they borrowed. They are rich and although they may not have had all the money required for an investment immediately which has made them to seek for loans, they are at a position where they can pay back or exchange collateral as settlement should thing go sideways. The poor man is not in the same position.


Would you classify borrowing money to invest in Bitcoin as good debt or bad debt?
Depending on your financial status, if you are rich and the money you are borrowing to invest can be repaid even if your investment does not perform as expected, then you can go ahead to borrow, it is a good debt in this situation. If you are poor and you cannot afford to pay back the money you intend to borrow for investment if it does not go as expected, it becomes not advised as it will be a bad debt.
hero member
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I think the debt can be avoided if there is no urgent need.  I mean even if you take a loan to make an investment it's not too wise for you to do because if you get a passive income per day/week/month you can set aside some of your income to invest in the long term it's wiser than you take a loan.

Addiction to taking loans will also have a negative impact in the future because things that we don't want can happen in the future and that will prevent you from being able to pay off the loan. So my advice is it's better to live without debt and have no burden in everyday life.

Indeed, some of them are quite successful by using loans to manage their financial side of the business they manage or they are lucky in every way.
legendary
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Would you classify borrowing money to invest in Bitcoin as good debt or bad debt?

I would classify it as a good debt, only under the condition that it is done based on a 4+ year period or 4 years minus (reduce years that have passed since last halving). If someone is borrowing for the sake of trying to make more dollars as quick as they can, or even within a year for that matter, then I would consider it a bad debt...as that is essentially the same as gambling.
legendary
Activity: 1512
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Before you borrow money, you should make calculations and be certain that you will be able to meet up to pay the loan before the expiration time. That is what I can define as good debt.

Although, buying assets and properties that their price and value appreciate with time is a wise choice.
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