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.

[Read more…]

Return to top of page

Copyright © 2019 · Faliq Fauzi · Log in