It’s ok to borrow five times more than you own for a house, most folks say. We got into trouble when people borrowed the entire value of the house. I’ve heard it argued that you can apply the same rule for investments. Borrow two to three times as much as the value of your investments. In boom times, this works well, and you make tons of money. Of course, if you don’t get out in time for the crash, then you are in wrist-slitting territory. We borrowed to buy our house, and put 20% down. A few more months, and it’ll be ours. We’ve never leveraged our investments, so, although we’ve lost 35% of the value, like everyone else, at least we aren’t in trouble because of it. Credit card debt, though, is the worst. You’ll never be able to save anything if you don’t pay off in full every months. That’s because you pay 18% interest, and if you only pay the minimum, the amount you owe will grow and grow. That $100 gadget will end up costing you $500. Better not to spend, but to save as much as you can. There are good debts and bad debts. A debt that helps you earn is good (like houses and investments). A bad debt leads to nothing (credit card debt) because you consume what you buy, and there’s nothing left after it’s gone, but the money you owe on it.