Good Debt, Bad Debt

How Jon Hanson survived his "near debt expierence."

 Ever heard of paradebt?

It's a term coined by Jon Hanson in his book Good Debt, Bad Debt (worth a read, if only for the funny cartoons).

We already know what debt is:

When you borrow money from someone and are expected to repay it, often with interest.

When debt is compounding, the balance of what you owe can keep going up even if you don't add to the debt.

Paradebt is something you'd probably not think of as debt. It's an ongoing charge you're obligated to pay, even though you haven't borrowed the money. It's a streaming service, a meal kit subscription, an unused gym membership, a "free" trial you forgot to cancel.

After all, what's the difference between paying a $250 student loan debt bill (traditional debt) and a $150 gym membership or $200 in subscriptions per month?

The difference is that you can cancel the gym membership. You can cancel the streaming services.

For better or worse, we live in a world where spending money takes zero effort. With a single tap

- you can order an Uber
- get food delivered
- buy extra lives in a game
- or subscribe to yet another app

Convenience is amazing, but it's also dangerous. When money leaves your account without friction, it's easy to lose track of how much is going out. You don't even feel it... until your account balance does. 

Here's a bold idea: Instead of just canceling your paradebt... reclaim it!

Turn those outflows around to help you build wealth.

Here are some examples of the power of reclaiming paradebt.

I added it up for you. It's $1.8 million.

I've also linked my calcs in case you wanted to check out what your own paradebt is costing you.