HomePersonal SituationThe There is No Good or Bad Debt April Net Worth Update

The There is No Good or Bad Debt April Net Worth Update

Net Worth Update

On January 18, 2011 I decided to start a new way to track my net worth.  I created a private spreadsheet and zeroed out my net worth.  This way I can share my progress each month, going forward without revealing how much is in my savings account, 401(k), etc.

What assets am going to include:

What liabilities am I going to include:

What is missing?

  • Credit Card debt – Don’t have any except a revolving AMEX account so no reason to put it up
  • Checking Accounts – Always changing and moving kept low on purpose so no reason to track it
  • Cars – I have no idea why people count cars as an asset.  Its transportation not an asset.
  • Jewelry – I joke that The Wife’s hand is worth more than my car…but there is NO way anything is being pawned/sold so why list it as an asset?

From March 1, 2011 to April 1, 2011 my net worth increased 6.95%

From January 18, 2011 to April 1, 2011 my net worth has increased 13.24%!

Like last month approximately half of my increased net worth is based solely on decreasing my large liabilities.  I have a feeling that as I eventually pay off the debt everything will exponentially grow.

There is No Good Debt or Bad Debt

Like last month when I complained that most e-books suck, there has been a topic that has been bugging me for months but it isn’t enough for a complete post so I’ll throw it in with my net worth update.  A lot of people view any debt as evil then there are those that view debt as either good or bad depending on the type of debt.  I think those types of classifications are simply wrong.  Debt can’t be good or bad it doesn’t have the ability to be so, just like money can’t be evil.

I was shocked when I looked up the definition of debt

Definition of Debt

You can just feel the horrid connotations associated with debt. If debt is not evil nor is it either good or bad what can debt be?

Debt is Either Smart or Stupid

Debt is so old it is discussed in the bible!

It is better that you should not vow than that you should vow and not pay – Ecclesiastes 5:5

Maybe banking is the oldest profession, actually if you ask anyone that is underwater on their home they will probably say that banking and the oldest profession may be one in the same.  Seriously though, could you even being to imagine a world where there is no ability to borrow?

  • Most people wouldn’t be able to purchase a home,
  • Post High School education would be very different
  • The automotive landscape would be completely different
  • Commercial businesses would be a much riskier venture
  • How would capital intensive industries even begin?
  • The Federal and State governments would collapse

I digress.  Merriam-Webster obviously has a problem with debt, look at those examples!  Despite their best effort to drive people away from debt – debt can’t be good or bad.  Debt is a tool, just like money is a tool or a computer is a tool.  You could use the computer to hack and ruin people’s lives (bad) or you can use it to cure a disease (good).  Similarly, you can use debt to fund your drug habit or you could use it to start a business that will employ people.

What Makes Debt Smart or Stupid?

People say that using debt to fund an education is good debt, but what if that education is in underwater basket weaving where there is so little chance to recoup the investment?  Some say starting a business is good debt…but what if that business is a scammy MLM?

So what makes something smart or stupid?  Whether you can actually justify a monetary profit from that investment.



  1. Net worth is looking great! It’s outpacing SP500 pretty handily. 🙂
    That’s a unique way of looking at debt. I think debt has negative connotation because almost everyone has bad experience with debt. Debt just sucks period. Good or bad, it is still hanging over your head. right?

    • It does hang over your head but sometimes you have to remember to control your emotions and let math win out!

  2. Your net worth growth rate is on fire! It’s a great feeling to close off those big liabilities.

    In my opinion, there is such a thing as a good debt like taking a mortgage for a house.

    • My point is that a house isn’t always good debt – what if you bought a house you can’t afford or over paid for the house?

  3. I like your approach to tracking your net worth. You have included what is important and left out the incidentals. Tracking the increase is the only thing relevant, not the balances. Keep it up!

  4. Terrific net worth performance. Opening a fund soon? Might have to sign up.

    Great point about debt and money being tools. The person wielding it makes it good or bad.

    • Considering the mid triple digit debt I am rocking I am afraid the Evan Fund would look more like the US’ balance sheet lol

  5. “From March 1, 2011 to April 1, 2011 my net worth increased 6.95% From January 18, 2011 to April 1, 2011 my net worth has increased 13.24%!” That is AWESOME! Congrats!

  6. Nice job getting out of debt! That is such a huge boost to your net worth! Once your debts are gone, you can spend that same money investing, and really grow your worth!

    • I have a LONG time before all the non-mortgage debts are gone. I left law school with approximately 75K of 30 year debt

  7. Nice net worth increase.

    When it comes to debt, my position is that all debt has one thing in common: it’s risky. It’s just that some debt is a whole lot riskier than other debt…

  8. dude can i move some of my money in your fund? growth rates look great. I agree with Jackie on the general sentiment about debt. that said, my risk appetite has allowed me to leverage debt (good debt in my books) to procure several rentals that are benefiting me short term (cash flow, tax benefits) and long term (equity buy down / appreciation)

  9. Great job on the net worth growth. Sounds quite impressive so far, and here’s hoping you keep it up.

    As for debt, I’m with you; borrowing money is just a tool. When I look at my debts and try to evaluate the good and the bad, I look more at the interest rate you have to pay. If I can borrow money at 4%, that’s much better debt in my eyes than if I need to borrow at 30%, regardless of what I’m using the borrowed money for. (

    • Maybe, but there is a lot of gray areas…like is a car you don’t need even at 0% a good call? Or a house that you can afford still ok at 4.2%…

  10. I say there is no good debt, but for a different reason.

    The fact is that if you have any debt at all, at least a portion of it can be attributed to consumer purchases. Let’s say you have a mortgage and owe $190,000 on it. If you bought (say) a $1000 bedroom furniture set, even if you bought it 20 years ago, you always had an alternative: Go without, and only owe $189,000 on the mortgage ($190,000 – $1,000), and still have the same house.

    So at least indirectly $1,000 of your debt (or more, given compound interest) is attributable to the furniture purchase, even if you paid cash for the furniture and didn’t buy that house until 17 years later. And it is completely irrelevant what you thought you were borrowing the money for, it could be a mortgage, it could be student debt, or even gambling debt. It is still the case that without that purchase you could have $1,000 less debt and still have everything else be the same.

    So at least a portion of ANY debt is “consumer” debt, regardless of what you thought the debt was for.

    • It sounds like you are arguing against a made up person. Your comment has less to do with debt and much more to do with you believe in a minimalist life. Which isn’t good or bad, just not at all what the post was about.

      • How does it matter that the person is “made up”? This is quite common type of scenario that real people in real places live in every day. (Do you know anyone who has a mortgage and has made at least one non-necessary purchase in their life?)

        And why must I believe in a minimalist life in general, as opposed to temporarily until you can pay cash for a house and then not-so-minimalist later on?


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