Good Debt vs. Bad Debt: A Finance Expert's Guide to Smart Borrowing

Understanding Good vs. Bad Debt: A Finance Expert's Perspective Millions of people struggle with debt, but not all debt is created equal. Graham Stephan, a renowned finance expert with 4.9 million YouTube subscribers, recently shared his insights on differentiating between "good" and "bad" debt. His video, uploaded from Mexico on May 25th, 2025, quickly gained traction, accumulating over 12,300 views in just over two weeks. Stephan's core argument is straightforward: good debt makes you more money than it costs. He illustrates this with the example of a business loan. "Let's say you have a business and you're able to borrow money at 10%, but that borrowed money makes you a 50% ROI because you could run ads with it. Then that's fantastic debt." This highlights the importance of considering the return on investment when evaluating debt. He also uses the example of a low-interest mortgage, stating that if the inflation rate is higher than the interest rate, it's effectively a good debt. However, he cautions against high-interest debt, such as car loans, which may not offer a comparable return. The video's simplicity and clear explanations make it a valuable resource for those seeking to improve their financial literacy. Stephan's expertise and large following lend credibility to his advice, making his perspective valuable for both novice and experienced investors. His engaging presentation style ensures that complex financial concepts are easily digestible, encouraging viewers to take control of their finances.

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