Personal Finance

Good Debt

Definition

What is Good Debt?

Borrowing used for an asset or activity expected to create value, though repayment risk remains.

Example in practice

A manageable education loan may improve future earning capacity.

Keep learning

Money set aside rather than spent, often for emergencies or future goals.

Liquid savings reserved for unexpected expenses or income disruption.

Total assets minus total liabilities.

Annual portfolio withdrawals divided by the portfolio's starting or current value.

Think you know your investing terms?

Put your knowledge to the test with a quick quiz.