Would you consider education/study loan as a bad debt?

What are bad debts? Well, refer to a previous entry on what I’d consider as a bad debt. Basically, when you take out a loan to purchase things that has no ability to yield anything towards your wealth-making journey, then that’s a bad debt. That’s my interpretation anyway.

Anyway, think about this situation. How about if you take out a loan to further your studies or skills? Would you consider that as a bad debt?

Now, let’s put a spin to that scenario. How about if you already have other qualifications and you are already working? Would the loan then qualify as a bad debt? For example, you already have a Bachelor’s degree in Finance and you’d like to fund your MBA studies through study loans. What do you guys think?

Reason I’m asking is this. As a lot of you might already know, I want to become a pilot. Unless an airline can take me on, the only way I can become one is by funding the training myself.

If I stay here in Australia, I can work (assuming somebody will actually hire me) and pay my flight training on an ad-hoc basis. If I return to Malaysia however, I need to train on a full-time basis, thus coming to the need of having a huge lump sum to fund the training. The only way to get that huge sum of money is through financing. Now the million-dollar question is, am I willing to include a RM250,000 long-term loan on my balance sheet?

Oh, by the way, ditching the flying bug is definitely not an option that I’ll ever consider.

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Disclaimer: This article is not a specific nor general advice on managing or investing your money. This article does not constitute a recommendation nor does it take into account your investment objectives, financial situation nor particular needs.

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About nadlique

This blog is about the journey of a 28-year-old Malaysian towards financial freedom. This blog was started back when the blogger was 21 years old. However, his journey towards financial freedom had begun way before that. Materials such as investing, business, entrepreneurship, equities, and real estate are presented. The author also posts his thoughts and observations on life in general.

Comments

  1. hard to say.
    if you’re planning to be a pilot as your main job, I’d say go for it. But RM250 000 for a secondary job doesn’t worth it lah.

    RM250k tu, baik kau buat beli rumah (tapi maybe tak cukup.)

    do I get the million dollars now?

    • Well, obviously flying will be my primary job la. Haha. What other jobs did you think I was interested to undertake?

      Career-wise, the aviation industry is where I want to be in.

      Tapi, tak boleh nak deny, berat jugak loan RM250k.

      Food for thought, rumah bila bila boleh beli. Masa utk mengejar impian terhad 😉

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