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If your return on capital is higher than the interest rate, you should take on debt. If it's not (and for most it's not), then you shouldn't. Pretty simple. A
by Mikeb85 10y ago
If your return on capital is higher than the interest rate, you should take on debt. If it's not (and for most it's not), then you shouldn't. Pretty simple.
Anyhow, the article is an interesting anecdote about Bourdains life, but has little to do with money. He makes money from TV and books, can live comfortably because he makes quite a bit, but he's no financial savant.
- camillomiller 10y agoIndeed. That's why Apple takes on debt and does bonds to pay dividends, buy back stock and other stuff they need to pay big money for. With their cash reserve money is dirty cheap and they can actually make more money cause people will rebuy their debt like hot cakes.
- tonyedgecombe 10y agoThe return on capital includes a risk factor, there is no risk that you won't have to repay the debt (other than death or bankruptcy).
- paulddraper 10y agoDeath won't automatically void the debt, though of course it's only the beneficiaries of your estate that will feel the effects.