This question, in society today, are often answered with a resounding “YES!” but from our perspective, this thought should be processed more fully and one must understand the nature of debt and the roll it plays.  This coming from a blog and company that are here to help you get out of debt sounds like counter-productivity but bear with us and find out!

Some may hold to an addage that I personally subscribe to, things are not good or bad, they are just things (this may include ideas and concepts such as debt). It is the people that use the tools for good or bad that decide for themselves… What does that have to do with debt?  Debt is just a concept and idea, it is neither good or bad, merely neutral.  Now i’m sure many would love to argue this point and that is fine in that may just agree to disagree.  The point is that whether or not something is good or bad is based on its use, the user, and the context of use.  Today, many are experiencing the “bad” of debt.  At the same time, there has been more than once that debt was a phenomenal tool.  Take for example an aspiring entreprenuer who utilizes a student loan to get through business school where many contacts are made and upon graduation, starts a business with another modest loan.  The business becomes phenomenally successful allowing the entreprenuer to payback all loans in timely fashion.  Contrast that with one that does not attend school nor starts a business due to the stigma of loans and ends up working in a low wage job that he/she hates.  Maybe they do start a business but due to early cashflow issues common to startup businesses, it fails.  Debt should be used with an exit strategy and contigency planning without excessiveness as compared to income and revenue levels.  If one has a plan to pay back the loan and a back up plan if things do not go according to original planning, as well as managing the debts to be within the “means” of the business or personal financial situation, debt can be the bridge to future success, progression, and personal well being.  Should one always have debt? probably not.  If debt is excessive, it becomes that shackles of progression, holding it back.  As can be seen today, many a person and business have failed due to “over-leverage,” too much debt.  Most lacked any sort of contingency plan and failed on the fact that things didn’t go according to their initial hopes and dreams.  Rarely to circumstances follow the initial plan and this must be accounted for and understood.

I recently read an article by MSN money that speaks of this dichotomy of good and bad debt.  One thing that seems left out in the article is that many people during the recent bubble and burst were intending to use there debt as “good debt” but ultimately, it destroyed them financially.  One argument is that home ownership is a great investment but again, i say that depends on the person, their financial situation and their education and understanding of real estate.  Many have been burned by trying to use debt productively only to go out of their means and capacity in a hopes of making a profit, again without contingency plans or true exit strategies.  Even the good debt as shown in the article can become bad rather quickly with a shift in markets.

All in all, i contest that there is some good that can be created with debt BUT it must be fully understood, managed, and within reason.  In most cases debt should not hold a permanent position in ones life.  Remember, it is just a tool.  The hammer can build a house or destroy it, it is the user who decides how to use it.