4.1.4 "Good debt" and "bad debt"

Although there is nothing inherently right or wrong about borrowing, financial experts often distinguish between "good debt" and "bad debt."

Keep in mind, though, that a debt may be "good" or "bad" depending on the circumstances. For example, a mortgage is usually considered a good debt because it's an investment in property that is expected to increase in value—but it could be a bad debt if you can't afford the payments.

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