> Young men starting in life should avoid running into debt. There is scarcely anything that drags a person down like debt. It is a slavish position to get in...
Well, that put student debt in perspective no ?
Well, that put student debt in perspective no ?
"Mr. Beecher advised young men to get in debt if they could to a small amount in the purchase of land, in the country districts. “If a young man,” he says, “will only get in debt for some land and then get married, these two things will keep him straight, or nothing will.” This may be safe to a limited extent, but getting in debt for what you eat and drink and wear is to be avoided"
In some ways, student debt is similar to land in that it can provide a return on investment that allows for paying off the debt over time. The main difference being that land is tangible and can be sold to pay off the debt completely.
Borrowing for food, clothing, and other items that tend to be used up or worn out before they're paid off does seem like a terrible idea.
In my case the choice was use student loan money to pay for living expenses (which were extremely meager) while in college or not go to college at all. It was part of my educational investment.
It was totally worth it, the loans are long paid off, and the investment has paid untold dividends in the form of a salary I wouldn't have the chance at if I didn't go to school.
He went to a several month long intensive coding bootcamp, with tuition fees for the entire course is between $10-15k
For comparison, I am paid $58/hr with benefits, my co worker is paid $50.
Higher education is vastly overcharged and overrated.
Comparing student debt to buying land is funny.
At least with land you are guaranteed to be the owner of an asset. Something physical, a location, that other folks might at some point pay a price for (regardless of what you paid).
Student loans don't guarantee anything. :)
No, not even a pass.
While this makes sense for capex intensive businesses. It's an irrational choice for a tech startup that may need to pivot, partner or be acquired. For those choices you need a source of capital with similar incentives as the founders.
wha? selling debt you are committing yourself to a financial obligation, selling equity you are committing yourself to a strategy in the hope that that strategy will be successful.. yes, it is not binding fiscally and so the strategy can be renegotiated without penalty, but that doesn't by proxy imply the converse that debt inherently requires a fixed strategy..
this is why you can get cash flow/line of credit loans based simply on historical accounting data, etc..
that said getting loans under false pretenses is also fraud. YMMV
> Mr. Beecher advised young men to get in debt if they could to a small amount in the purchase of land, in the country districts. <snip>
> This may be safe to a limited extent, but getting in debt for what you eat and drink and wear is to be avoided.
Or if you ever got laid off.
Or if you ever got injured or severely sick and found yourself with shocking hospital bills.
When life hits you with something like that, suddenly that monthly payment, and the risk of foreclosure, bankruptcy, and severely damaged credit, all looms large over your head like the Sword of Damocles.
Yes a mortgage is real debt.
Do you own that much? Let's put some real numbers on this. You buy a $350k house, and put down $70k (20%). That leaves you with a $280k mortgage at 4%. This gives you a monthly mortgage payment of $1,337.
If you pay that monthly, you would own 51% of the house ($175k of equity) some time in the 16th year of your mortgage. After making 188 mortgage payments. Note, this doesn't include housing value appreciation.
COST
20% down - $70k
mortgage payments ($1,337 * 188) - $251,356
https://www.investopedia.com/articles/pf/12/good-debt-bad-de...
That being said, it's a general statement, specific cases of those can be "bad debts" if they are taken out recklessly and/or without forethought and planning and budgeting.
You also pay interest, which could be a huge amount (depending on how quickly, if ever, you pay off your principal).
Never forget though, you are paying quite a bit for the use of that money (i.e. the banks). This is mitigated in a rising market, but lots of houses (well land, really) don't appreciate fast enough to counter this.
Not to mention the additional costs. It might be more accurate to think of your house as a depreciating asset (the house) bundled with a (hopefully) appreciated asset (the land it is on)
Did you really just not read the article at all? He is clearly referring to things like consumer debt rather than investments.