Good Debt v. Bad Debt
episode
DIY Money | Personal Finance, Budgeting, Debt, Savings, Investing
27 min
4 speakers
3 chapters
transcribed 1 month ago
Transcript
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Transcript generated automatically by AI and may contain errors.
How do the hosts introduce the episode and why does the big-picture matter?
Hey, this is Daniel. Thanks for listening to DIY Money. If you haven't already, be sure to give us a five-star review on iTunes so your friends know that they can learn from the show. Now, enjoy the show.
Welcome back. Ladies and gentlemen, you're listening to another edition of DIY Money.
DIY Money. A. Howard in the house. It's been forever.
It's Q&A. Q&A. DIY Money Q&A.
We are back, baby. We are back.
I love it. What's new? If we ever launched another show, it would be you and I, and I would title it Q&A. Oh, I get it. Last time you and I were on together, I got you cracking up about something. You were just rolling, and I don't remember, just right from the start. And you had made a comment, and I just really want to talk to you briefly about how much I appreciate it.
Oh, I thought this was going to be an intervention.
No, we can do that next. that you were the way you took the last question you and I were on together about giving. And you, you said, you know, irrespective of the tax ramifications, the capital gains, the debt, et cetera, make sure your heart's in the right place and that you're giving, you know, with a cheerful heart. Uh, and I thought that was just, I was listening to that and I was like, gosh, that's so good because so often we get lost in the weeds of things and we forget that sort of what the end goal is, what the objective is. And I'm going to bring this full circle here in a second and get to what we're talking about today. But I'm at the stage right now where I have a 17-year-old who's going off to college soon, and the custodial account that we have built for him is sort of going to be used.
And more than likely, most or all of it will be used towards his education. And what's interesting is I've done all the right things, right? I've put money aside. I've dollar cost averaged. I've invested. I've been well allocated. Now I'm backing off risk or whatever. And the other day I was getting so annoyed because I've taken the max gains for this year. And, you know, there's some nuances. I mean, it's not perfect. So I can't just like take all of it and put it in money market or something, even though sometimes I wish I could because, again, it's less than five years and we're probably going to be using it. But I was so in the weeds and then I forgot. I was like, my gosh, my son's going to college and I've put this money away from him.
Like like I had this realization, this upward like we did it. We had this goal 18 years ago, and by the way, 18 years ago when we had our first son or 17 years ago, we were not, I mean, I was living in Florida getting ready to reestablish what became Juul Financial. It was not like we were high on the hog.
We were running on empty.
And I'm like – we had our son, and we started putting – and it was like, okay, we're not going to be eating out. We're not going to be doing this. We've paid off the bad debt, which we're going to talk about in a second, and we're now saving and investing for his future. Fast forward 17 and a half, almost 18. He turns 18 in a couple weeks. 18 years later, and we're there. We're there. And so what I'm saying all that is to say this. Don't forget the big picture of where you're progressing and why you're doing things because what we're going to talk about today is the difference between good and bad debt. And this will be the final in our kind of what sort of organically become a three-part series.
We started with stop, right, because our concern over consumer spending and debt and delinquencies and so forth. So if you missed that one, go back and listen to that. The second one, Family Inc., so the family business, if you will, and how to approach your family assets and investments or your income and so forth like a business would and developing a budget and so on and so forth. And now we're going to conclude it. These are in a particular order because it's important, but these are sort of the biggest hot buttons I think we see, and that is business. bad debt and and and the steps to take first of all what is it and then the steps to take to be paying off that bad debt and the the rationale is is that when you start down this process
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