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Doesn't this all depend on how you use that specific debt? If you use the above example, if I can generate $500k each year using $1m in debt, how is perpetuall
by charlesdm 11y ago
Doesn't this all depend on how you use that specific debt?
If you use the above example, if I can generate $500k each year using $1m in debt, how is perpetually serving the interest expense on that debt bad then?
Use it well, you can create additional profits. Use it poorly, you'll end up with nothing (or even lose capital).
Maybe you mean that the lever effect shouldn't exist, so that it's a zero sum game?
- laotzu 11y agoWhile it is a two-way street (both parties "agree"), what I'm saying is that in an honest, straightforward arrangement people should not be contractually obligated to run in the rat race their whole lives trying to pay off a debt that by design can never be paid off. So yes, a zero sum game sounds quite logical.
- charlesdm 11y agoNow you're talking about "consumer" debt. i.e. debt to buy a car / house / student debt / etc. That's bad debt. If it's not intended to be used for investment, I would personally never use debt.
- branchless 11y agoYou have no choice other than to enter into the land based debt system. Don't want to borrow for a mortgage? Pay high rent on a place because someone else bought it with a big mortgage. That is land enclosure.