[Craig T]

I think the second part of the question related to debt should be "What is Your Net Worth?"...or to avoid competition.."Is Your Net Worth in the Black or in the Red?". What is the value of your assets and saving after subtracting your debt?

Many Pelican investors have made good arguments for using low interest debt as leverage on APPRECIATING assets. e.g. rental property, small business, primary residence, etc. I'm one of them. I don't consider having $400K in mortgage on $800K in real estate debt. I consider it $400K in equity. If the rent covers the P&I and taxes, it's a cash flow neutral appreciating asset. As rents increase (and they always do), it eventually becomes cash-flow positive. Plus, equity increases two ways, paying down the loan and appreciating home values.

Taking a 3.5% loan on a rental property with a 30% plus downpayment is a smart use of debt. There is some risk of a housing collapse if it's a short term investment, but real estate has proven to be a pretty solid investment long-term (>10 years)...And there have been very few RE corrections that dropped more than 30% in value.

As others have said...Car loans and credit card purchases for vacations and luxury items is just buying things you can't afford...Living above your means. Other than consumables, a new car is the fastest depreciating item I can think off. I couldn't imagine borrowing and paying interest on such a bad investment. I'd drive a 85 Ford pick-up with a primer'd door first.