Other factors like tax deductions on depreciating business assets make a liability like a car more palatable. Concerning debt/risk, I find it’s better to be prepared for the worst and hope for the best.

http://www.ibrinfo.org/
http://www.staffordloan.com/repayment/forgiveness.php

Let me go through this one topic at a time. Everyone here has very good points.

Education:
The value does go down, not up. What you learned 30 years ago is not as valuable as you learn today because everything, technology, science, even economics, is changing. Companies are laying off old employees for new ones with new knowledge and cheaper salaries.

Side note: And not to sound like a conspiracy theorist, but what was taught before the Internet was based on what the government wanted you to believe. The history books and science is now being rewritten. And the Internet is making it harder to lie to people.

In addition, like someone else said, not many people end up in jobs using their degree. This is because employers are looking for people with experience as well as degrees. If you get out of school, the likelihood of you getting a job with no experience is slim. You can do internships to get experience, but most people going to school can’t afford to push coffee for free, while still not learning the skills they needs in the workplace.

My advice, is to go to a cheap school, start in a community college and then a state university. Save money while in high-school for your tuition, and live with your parents while going to college so that you don’t have to pay living expenses. Ask your parents to help you get involved in your state’s programs that help you pay today’s tuition and save money with interest, so that you are ready when you start school. Florida has a program like this http://www.myfloridaprepaid.com/ . There is also the Upromise program that your parents and family members can help you save for college and it doesn’t cost them anything http://www.upromise.com/welcome .

To get experience in your degree so that you are employable when you graduate, don’t do internships. Instead, contact companies that you would like to work for and offer to work for free but only if you get to do the job that you want to learn to do and can put the title on your resume. If they don’t let you do the work you are looking to do, go to another company and keep trying to find one that will let you.

Car:
I will never again buy a car with a loan, or brand new. The first car I had bought this way went up in flames (some engine problem) and we got back from the insurance way less than what we paid. In addition, after all the interest on the loan and the five years, we paid way more than it was worth brand new. After that we bought a used car for $700 that drives way better than our brand new car did, and it has lasted longer. Always buy used and pay all in cash. Never pay more than half of what the brand new version is going for. Try to buy no more than 5 years old, and no more than 60,000 miles. And try to get one that had only one owner. And not to sound discriminative, but the older the last owner was the better. Retirees don’t drive around as much as younger people and they take better care of their cars because they want it to be the last car they buy.

House:
The house you are living in is not an investment. An investment brings you in profits, a return on your money. I would advice that your mortgage should not cost more than a forth of your income. You should also have about 6-12 months of mortgage payments saved before you buy the house (because of the current unemployment I don’t recommend the usual 3-6 months). I say before you buy the house because when you start to live in it, you will see new expenses that you never planned for.

If buying a brand new home, don’t buy from a builder they overprice, instead by from a current home owner who has lived in it, and make sure it has aged five years. This way you can see if the builder made any mistakes in the construction; you usually don’t find out these things until a couple years later, sometimes 4 year later.

If you are buying a house for an investment (to rent it out), don’t pay more than 25-50% of its value. As we have learned, home values and rent does go down. Don’t buy during the time when home prices are rising, buy when home prices are at their lowest. This is good advice for someone buying a home to live in as well. But I will tell you that it is more profitable and less expensive to get into the business of virtual real estate (websites).

Don’t ever get an equity loan, and even more important don’t get one to pay off other debts. The banks will advice you to do this but it is in their best interest not yours. It doesn’t make sense to take an unsecured debt and change it to a secured debt with your home as the collateral. At least with the unsecured debt, it will harder for them to try to take your home away if you can’t pay.

Business:
If you want to start a business, it is better to save for it and grow it slowly, than to get business debt. Because when the business fails, you will still be stuck in business debt, and 9 out of 10 businesses fail. So the chances of this happening are pretty high. Don’t listen to the banks when they talk about leveraging your business with debt. Remember they are only trying to benefit themselves, not you.

Overall:
If we all worked to get our debt to zero and control our spending, prices all around will go down, inflation will improve, and our dollar will be more valuable and everything will balance out in the end for the better of all the people. But the banks, including the Federal Reserve “Bank” (it is not a government department), doesn’t want this to happen because that is where they are making all of their money and profits.

Debt is bad. Good debt is an oxymoron. Anyone who gets into debt when they can easily choose not to is a plain moron.

If you want to be rich, live like the rich. If you want to be poor, live like the poor. Rich people pay cash for cars and such. Poor people can’t pay for their cars, so they take out a loan. Hmm….

There is NO such thing on this planet as good debt. To learn more, or a better explanation of why, just google search Dave Ramsey and listen to/read anything this man says!

No matter what you buy you have to use good judgment and outweigh the cost versus the benefits of buying the item or borrowing money to purchase the item.

woo: re: “Mortgage companies exist to make money. “: so does Taco Bell, but I’m a customer of theirs anyway. The profitability of the seller is unrelated to the value of the product.

A loan is just like any other product: you are paying for something that is useful to you. Specifically, you are paying a lot of money over time for less money right now.