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I listened carefully to what was said about debt during this last Saturday's show and, while I generally agree with the commentary, I disagree on some things. In particular, I disagree with the lady that called in and said that she has never used credit, nor does she see any reason to EVER use credit.

I believe that using credit is an alternative, given other opportunities. I'm not for loading up on credit card debt, but I am for using other people's money to make sure you get a better return on yours.

For example, instead of paying more principal on my mortage every month, I set aside the amount I could be adding to the payment and invest it. It doesn't make any sense to me to add, say, an extra $200 to the payment because I would be getting less than an 8% return. Since both the mortgage and investing are long-term endeavors, my bet is that I can get a lot more return on my $200 by doing something else with it. In the end, I may have paid more for the house, but the additional gains I make on the investment money (hopefully) more than make up for it.

Any decision about money needs to take into consideration the various opportunities and opportunity costs associated with the available options. Since using credit is always an option, it needs to be considered. Whenever I can, and it makes sense, I use other people's money to get things done. To me, I'd rather do that than use up my cash reserves or, worse, sell some of my investment "infrastructure" to finance or pay something off.

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