Episode 125: Build A Money Making Machine: A Roadmap to Financial Freedom with Mel Abraham
The High Vibe Life Podcast
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Destructive Debt vs. Productive Debt
Destructive debt refers to the borrowing used for consumable goods and lifestyle choices that are not affordable, leading to momentary pleasure without increasing net worth or wealth. This type of debt arises from impulsive buying behaviors and a lack of intentionality in financial decisions. In contrast, productive debt is an investment that can enhance wealth, net worth, or cash flow over time. Examples include debt for purchasing equipment, funding effective advertising, or investing in rental properties. While both types of debt share the common trait of incurring costs, only productive debt contributes to long-term financial growth.
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