It Is Not About the Money, Silly, It Is All About the Time

> Is that somehow "smart debt"? Really? What's so smart about it?

Regarding a mortgage and 2 car loans, I'd like to offer a defense of why it's smart / good debt.

The primary reason that your mortgage is considered "good debt" is because the asset you purchase with that debt (your house) will typically appreciate faster than the interest you pay. I'm not including black swan events like the 2008 crisis. When you eventually sell, you'll be in the black.

Regarding car loans, the only type of "smart" car loan is 0% financing. A 0% loan lets you keep your money in your pocket for longer (and in that time, you can invest it however you see fit). 0% loans can be found depending on when you see the dealer. End of the month? Quota wasn't reached yet? Perfect time to negotiate.

I'm certain jaquesm's point is that lots of people get in over their head with their purchases, especially large purchases like homes and vehicles. However, DontBeADick's point has some validity: Taking on debt can allow you to realize further gains than you would have otherwise seen (basic leverage).

There's also the option of spending a bit of that "free" money to live a life worth living instead of spending all of your free money paying something down which only offers benefits to your life later.

You might not be alive later. Don't put everything off until then.

Getting people to be more debt free would - in my circle of family and acquintances - do absolute wonders for their quality of life as perceived through their own eyes indicated by the level of bitching that I'm confronted with. Hence the post, it's not aimed at people like yourselves that are smart enough to figure this all out for themselves and that are capable of deciding between investing in a 7% average ROI annually real estate fund (read that small print), the impact of inflation and paying off a 4.1% mortgage.

If you can do that great.

But if you're about to finance your second new car (0% is not free money, that means that you're paying more for the car than you should have to because I can always get a better deal paying cash than someone that takes a 0% loan, and that's an indication that you don't understand this stuff nearly as well as you claim) or if you plan on getting a third credit card to pay off the previous one and you wonder where all your money goes then this post is for you.

> I spend a lot now (but not beyond my means) because these are some of the best years of my life,

I agree with the second part of the statement, but not with the first one. In my life, there is almost nothing that could be further improved by spending more (or a lot of) money on. Currently, my biggest expenses are rent (allows me to live in London and have a very good job) and food (I buy the best, mainly because I believe that bad food will tax my body in ways that will only become apparent in several decades - but I eat home-cooked food as often as possible, so it's quite cheap). Other than that, I spend very little. I enjoy reading (books are cheap, so is internet), good conversation (again quite cheap, no need to spend 100s in bars), nature (parks are free), dance and sports (climbing, running, bodyweight training, skiing and surfing - the last two are a bit more expensive, but you don't need to buy your equipment if you're not doing it that often). If I lived in a smaller town, I would probably have a used car to travel in the countryside. I'm probably really lucky, but I really don't see the appeal of most of the more expensive stuff/experiences.

I'm tired of seeing "people who are in debt waste their money" or "people who are in debt live beyond their means" as the default explanation for indebtedness.

I'm in debt. I have debt for a car, furniture, and medical expenses. (despite the fact that most of my furniture was acquired for little cost, and insurance covers most of my medical expenses) I also have a new MacBook Pro (I'm a developer), much to the chagrin of my baby boomer parents, who also think I should drink less Starbucks coffee. There's not a lot of understanding amongst the older generation that rent is high, food is expensive, and that's where most of the money goes, which makes it hard to pay off the debts. Starbucks represents about 1% of my income, the MacBook will be under 2% of my income over the 3 years I'll probably have it, and I'll make back probably 40% of that when I sell it.