Читать книгу More Straight Talk on Investing - John J. Brennan - Страница 44

So far, I've been discussing how to manage the assets on your personal balance sheet. Now let's think about liabilities—the debts you owe in the form of credit card bills, car payments, mortgage payments, and so on. Part of a sound financial plan includes developing a philosophy on debt. My philosophy can be summed up with a simple proverb: “Loans and debts make worry and frets.”

I've long had a strong aversion to debt. My wife and I started our life together with sizable loans from graduate school and no tangible assets other than a 10-year-old Volkswagen Rabbit. I loathed writing those loan payment checks every month throughout the early 1980s, especially because of the relatively high interest rates that existed at the time. As a result of that experience, my wife and I resolved to avoid debt whenever possible. Not everyone feels as strongly about debt as I do, but even if you don't, you should give serious consideration to several debt issues.

With debt, I recommend borrowing only for long-lived assets. An education serves you throughout your life, so college loans are okay, or “good debt.” A house will last a long time, so mortgage loans are necessary and sensible. You will also be building equity in your home. That said, be cautious about home-equity loans and other second mortgage borrowing. Cars also are relatively long-lived purchases, so car loans at reasonable interest rates make sense if the length of the loan is less than the length of time you expect to own the car. But borrowing for consumables—clothes, dining out, entertainment, and travel—is likely to get you into trouble and hinder reaching your investment goals. I would consider a credit card balance with a high interest rate as “bad debt.”

Indebtedness is both an economic issue and a peace-of-mind issue, so the following are some other important debt considerations to weigh.