What is Debt? According Investopedia, “ Debt is an amount of money borrowed by one party from another.” Many people may consider debt as the amount of money they owe to someone or any organization. It is not wrong to say that.
However, in the business world it may have different meaning. As I read Richdad's book about “Rich dad Poor Dad” written by Robert Kiyosaki, the prominent guy giving education on how to be rich, defined the debt as the what that costs you money. In other words, the debt makes money flow out of your pocket. To me, I do agree with this definition because what I understood before, debt is the money and debt is the money I owe others. That’s why I spent ¼ of my life to spend money on the debt, the things that make money flow out of my pocket.
All in all, the general meaning of the “debt” is acceptable, yet you need to know the meaning in the business world if you want to be rich and get out of debt.
I will briefly describe about good debts and bad debts in the next article.
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