I agree up to a point. Debt used to acquire income producing assets is good debt. If what you are buying on credit does not produce income, that is bad debt if you carry a balance. Financing the purchase of a rental property is good debt if the rental income is paying off the loan. Using a credit card to buy groceries, a vacation, a restaurant meal, etc. is bad debt but only if you don't pay off the credit card statement balance in full each month. Most would consider the mortgage on a primary residence a liability (because the asset does not generate income), but necessary debt to provide a roof over your head. There is no magic number of loans or credit cards for a good credit score. What matters is your payment history and the length of your credit history and your % credit utilization. I see a lot of posts in this thread that claim there is a limit on the number of loans and credit cards you can have for a high credit score. I have 9 mortgages, and seven credit cards and two HELOCs that are treated as revolving credit lines. My credit score last month was 843 with a credit history of on-time payments for the past 30 years. My credit card utilization rate is under 10% right now only because I have some credit card balances at 0% APR. These balances will all be paid in full by the time the 0% promotional rate period expires. A couple of years ago, one bank I use offered a 0% interest, $0 cash advance fee for a 13-month cash advance. I used the cash advance to borrow $25000, then used the money to buy a few CDs at my credit union. The credit union paid me 2% interest ($500) over the following 12 months. I made minimum payments ($250) to the credit card balance then paid the balance in full when the CDs matured. I just viewed that experience as receiving a $500 cash gift from my bank for being a good customer. The point I am trying to make is credit can be your friend if used responsibily.
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If you want to save for retirement stay away from savings accounts. I do like the 6-12 months expenses in a high yield savings account that’s good advice. A lot of this depends on how old you are. If you’re just starting in your early 20’s get the apps like digit, this will help you save for different things but the money doesn’t yield any interest really. The app called Betterment let’s you open IRA accounts and you can set up automatic contributions. You can also decide which how your money is allocated depending on your risk profile, if you’re young you want to be more risky because you have a long time until retirement. If you’re older maybe less risky. But the key is to be consistent and keep up never stop contributing to your future. Definitely if you have an employer that has a 401k use it! And if they have a match max it out and go beyond it just to help it grow. If you have access to an HSA account that is a really great way to help save for your health care needs now and for the future and you can use that when you retire. 401k’s and HSA’s through your employer are great because that money is tax free which means you’re keeping MORE of YOUR money. I did the math in my pre-tax contributions and found out I get to keep like $250 more each paycheck that would have gone to taxes by putting it into a 401k and HSA.
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