What gets me hot here is that he completely discounts all the people who are doing what they love, are working their “Soul Purpose”, but unlike his ilk, don’t do it by leaching commissions out of others. For many of these folks whose income is generally limited, he offers no practical advise except to take all your 401K money out and start your own business. Oh, also buy multiple real estate properties and rent them out right away so you can earn that $1000 a month in rent with no extra work involved.

Nothing new, and what few decent ideas or examples he had are so buried in the blather it’s not worth the read. I’m sorry I took Trent’s advice and waded through this one.

All Debt Is Bad. Always. All the time. For the Debtor.

Now…that doesn’t mean it isn’t necessary. Or needed. The reason can certainly be good.

There are several instances where debt is useful, or necessary, or desired, or needed. Some of the examples from above, like med school or needing money to save a life are all instances. Borrowing money to buy a home is sometimes necessary.

But that doesn’t make debt good. That makes the reason for obtaining the debt good. The debt itself…always bad.

NOT needing to borrow money for any reason is what is good. Having cash is good.

An action and the reason behind the action are sometimes different.

I would say that a student loan that results in a good degree is not necessarily a “bad” debt – likewise perhaps starting a business.

For example, the computer in front of me, even though it’s five years old and on its last legs, is worth far more than the raw materials that went into its manufacture. Same goes for my refrigerator, my cell phone, my LED flashlight, and my guitar, just to name a few things that I can see from where I’m sitting. When people figured out how to make these things, and then made them, the world became wealthier.

It’s also not true that rich countries have become richer by causing poor countries to become poorer. Poor countries have become richer too. Africa as a whole has become vastly wealthier over the last 200 years. Even when you account for the increasing population, the “average” (there’s that word again) African today is much better off than was the average African in 1809.

Yes, there are people who accumulate wealth that has nothing to do with resources (actors, etc) but that is because what they do earns money for other people that enables those people to get their hands on something tangible. All wealth eventually comes back to resources. It might seem to people like us in the Western world that there is an infinite amount of resources, but that’s mostly because we are leeching the resources of the poorest countries.

To say there is an infinite amount of success means a redefining of success to things like love, happiness, knowledge, etc. I don’t need to make you ignorant to be more informed. I don’t need you to be miserable to increase my happiness.

The fact is, in business, a certain degree of leverage is healthy and can create lots of wealth. What many fail to understand is that the “lifeblood” credit is used to CREATE and PRODUCE – NOT CONSUME. Every time a business wants to launch new operations or products, they try and finance it with the most “ideal” mix of debt and equity, depending on what is created. And no good business is going to borrow unless they are creating more than they are borrowing.

The reason credit cards and car loans are “bad” is because the debt does not create anything – it merely facilitates consumption. The reason student loans are considered “good” (and I understand that they can be used to excess… but let’s assume in this example someone that prudently used loans for medical school) is because they create value and facilitate production.

All debt is not bad. And your comment that it is is completely naive and sounds pretty uneducated. Do you have a mortgage? Did you have student loans (could you have gotten your education without them?) We all know you have a car loan, because you decided that your “equity” was better to have liquid earning nearly as much as what you would be paying in interest. – It seems like you know these basic principles in practice, so why did you make that statement that “all debt is bad,” when by your actions you don’t believe it?

Is that what your Dave Ramseyite readers have come to expect from you?

Or are you seriously prepared to argue that taking out loans to pay for med school (assuming that you want a career as a doctor, obviously) isn’t a good thing? You would likely make that money back several times over the cause of your career especially since so many people are heading for that time in their life where they need more health care?

If your child where to need health care that was not provided by your insurance and which your emergency found couldn’t cover, would you not take out a loan to pay for it, if her life depended on it? What if it wasn’t urgent, but would seriously impact her quality of life – say surgery to correct blindness?

I can definitely see the problem with a gray area, but to go from there to assuming that all debt are bad is, to me, an emotional overreaction.