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As the old adage goes, the only things certain in this world are death and taxes. It was written a number of years ago before there were any forms of credit. It's almost time to rewrite that adage to include debt.

Now not everyone will go into debt. Some are born into wealthy families; others will save up enough cash to pay for their belongings. But for the other 95% of us, at one point or another we will choose to be or even need to be in debt.

You can look at debt in two ways: good debt and bad debt. This article will explain both sides of owing money and what you can do to convert bad debt into good debt.

GOOD DEBT

The key word to any form of good debt is "investment". The largest purchase you can get on credit would typically be a house. Having a mortgage is classified as good debt for a couple of reasons: 1) you need a roof over your head, and 2) it is a MAJOR investment. Houses generally increase in value as time goes on, especially in areas that see more development than others (e.g. a small town that has just announced a large employer setting up shop there). Owning a house makes more sense than renting...you will never own a rented property whereas over time you will own a house. Statistically speaking, the average value of a house has increased by anywhere between 80% and 120% or more in the last 15 years. In some major cities such as Calgary, AB where the economy is red hot, housing markets have went through the proverbial roof. Some houses 5 years ago valued at $170,000 are now selling for close the half a million mark. Now take into consideration your mortgage...for example let's say you purchase a house valued at $250,000. Unless you own a construction company or have a lot of equity behind you, it will take about 25 years to pay it off. Factor in the interest rate and by the time all is said and done, you've paid back close to or over double the amount of the original value of the house. However with the markets constantly increasing, the value of that house will go up to the same level in far less time than the amortization period of your mortgage. Your $250,000 home could be worth $500,000 or more in 15 years, so if you decided to sell after 15 years you would likely make a nice sum money on your house after the mortgage is paid off.

Another form of good debt would be to take out a personal loan and put it into an RRSP. Having money set aside for your golden years is a very wise choice! By taking out a loan for an RRSP, it will benefit you come

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