Do scroll down and look at my previous post Good debts versus Bad debts - especially the comments page if you have not read it previously. You would get the context and perspective for this post. We can basically group the opinions into 3 main schools of though: 1) It depends  2) Debt is bad 3) Debt is good It depends Most of us will belong to this group. We will say if we buy this, debt is good. And if we buy that, debt is bad...   Conventional wisdom is that it's "good" debt if we take up a student loan for our MBA . Didn't they say the return on investment for education is the best!?  Tell that to graduating MBA students in a recession... You start with a financial minus the moment you step out of school.  And with no job, how are you going to pay the rent? Never mind about paying down the student loan... Conventional wisdom will also say it's folly to take up a car loan since the moment you drive the  new car out of the showroom, it's value drops significantly. Your car loan will be worth more than your car's resale value!?  Tell that to those wise car buyers who bravely took out a car loan and bought when COE prices were at their lows during early 2009. Fast forward to today. And we wonder why we like to buy high; sell low for our stocks!?   (Readers here may want to relook at my previous post's comment page and figure out why I agree with Coconut that during bad times, debt is good!?) How to classify a debt is good or bad based on the item purchased? You tell me ;) Debt is bad For those who believe all debts are bad, I won't ask you how you bought your first home or car. I just ask whether you carry a credit card? If you truely walk your own talk, you would only carry a debit card - not a credit card.  Otherwise, I will treat you as belonging to the "It depends" school. I don't listen to what you say; I listen to what you do. Debt is good During my jouney towards my own financial freedom path, I studied those poeple whose networth were much bigger than me and financially free themselves. One interesting fact is that all of them have used credit/debt/leverage or other people's money (OPM) during their journey!? Coincidence?  I also noticed that street-smart and savvy businessmen will secure credit lines with banks when their business are doing well and cash flow positive!?  That's how you can secure the best rates and credit limit - when you don't need loans from banks! Try getting a loan on favourable credit terms when your business is going through tough times... Similarly, private banks are jumping over themselves to offer favourable credit facilities to high net worth individuals - at interest rates mere mortal like me can't get.  (Who said life is fair?) And proactive investors with private properties, they already have got their home equity loans pre-approved by their banks - just waiting for the stock or property markets to crash - whichever comes first.  It's good to know that you have access to ready funds when opportunity present itself. Not see the opportunity, then apply for loans (and hope it will be approved) or run here run there asking family members and friends for loans.... It's better than cry daddy cry mommy when others have pipped you to the opportunity; and complain no one believed in your "investment idea"... Luck is preparation meeting opportunity. Me? I belong to the Debt is good school. Since I am the HDB heartlander class of speculator, I have more limited ways to secure credit. I only have the margin account, CFD, and futures route. Big fish got big fish methods; small fish got small fish methods. When I moved into 50% cash and the balance of my equities are showing healthy paper gains, I applied to my broker to increase my margin limit :) Hello!? Try asking your broker to raise your margin limit when your account is showing lots of red and very much under water! Why give your friendly broker a heart attack? Summary There's no right or wrong answer. Just be honest with yourself. Walk your own talk. Singapore Man of Leisure (welcome to my blog; just google it!) This post was written by a guest contributor. Please see their details in the post above. If you'd like to guest post for TheFinance.sg, feel free to contact me for details about how YOU can share your tips and knowledge with our community.