{"id":41376,"date":"2018-12-06T18:57:59","date_gmt":"2018-12-06T23:57:59","guid":{"rendered":"https:\/\/olduvai.ca\/?p=41376"},"modified":"2018-12-06T18:57:59","modified_gmt":"2018-12-06T23:57:59","slug":"the-other-two-kinds-of-debt","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=41376","title":{"rendered":"The Other Two Kinds Of Debt"},"content":{"rendered":"

The Other Two Kinds Of Debt<\/a><\/h3>\n

\u201cAny corporation, private or governmental, that wishes to provide for a sound and equitable continuity of its business must take steps towards the systematic retirement of debt immediately after it has been incurred. Postponement of all payment for property or privileges by those who presently enjoy their benefits is calculated to bring uncomfortable consequences to them or those who succeed them.\u201d
\n\u2014 Engineering Economics, by C.R Young. 1949
\n(Read on Guerrilla-Capitalism.com)<\/p>\n

We frequently hear pundits and talking heads talking about how short-sighted government policies and unfunded entitlements are in essence \u201cstealing from the future\u201d or at best \u201cborrowing from the future\u201d and I found myself thinking about the difference between the two ideas.
\nNormally when we think about \u201cthe two kinds of debt\u201d we think productive versus unproductive debt. Exemplified in the Richard Kiyosaki \u201cRich Dad \/ Poor Dad\u201d series, we learn that productive debt is that which you incur and then use in a way that will help pay itself off.
\nExamples include vendor or bank financing on buying a business that you would then pay back with the earnings from said acquisition, something I\u2019ve done a couple times over my career; or taking out a mortgage to buy an investment property. From there you would use the rent to pay off the mortgage.<\/p>\n

I emphasize paying off the mortgage here as opposed to simply servicing the debt with minimum payments or interest only, and we\u2019ll see why shortly. Contrast this with unproductive debt, which is borrowing money to go on vacation or buy consumer goods, or do anything else with it that leaves you with the bill afterward. As Kiyosoki frequently stresses, it\u2019s the difference between debt that makes you money vs debt that costs you money.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

The Other Two Kinds Of Debt \u201cAny corporation, private or governmental, that wishes to provide for a sound and equitable continuity of its business must take steps towards the systematic retirement of debt immediately after it has been incurred. Postponement of all payment for property or privileges by those who presently enjoy their benefits is […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[195,23383,14273,23382,16663],"class_list":["post-41376","post","type-post","status-publish","format-standard","hentry","category-economics","tag-debt","tag-mark-e-jeftovic","tag-medium","tag-productive-debt","tag-unproductive-debt"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/41376","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=41376"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/41376\/revisions"}],"predecessor-version":[{"id":41377,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/41376\/revisions\/41377"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=41376"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=41376"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=41376"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}