The Debt crisis Crisis, what crisis? Just a few years ago at the peak of a very long bull run, one would have been forgiven for such an incredulous response to the phrase "debt crisis".
Over the last few years and particularly during recent months it has become a buzzword among other phrases such as "rescue package" and "austerity measures".
And who could have imagined during those (very recent) good old days that not only would most individuals in the world soon be drowning in debt - but entire countries as well! The mortgage crisis of barely "just the other day" has since been overshadowed by what is now commonly known as the "Euro zone Crisis".
And if we do not learn from the mistakes of history, many similar lessons will probably continue to be learned in the future.
Bad debt So, what is the cause of this irony? When some of the poorest individuals on the planet have a better balance sheet than some of Europe's finest? Any debt that exceeds the income of an individual or country is bad debt.
It's that simple.
To prevent the future recurrence of current scenarios the simple solution is that all of us - countries and individuals alike should simply start spending less than we earn.
There is nothing wrong with the pursuit of a better lifestyle and the increasing acquisition of the finer and more luxurious things in life as long as we do not enjoy too much of today with tomorrow's money.
Financing lifestyle with short - term debt and high interest bearing loans, especially on wasting assets has brought us to where we are right now.
Good debt It is no secret that many individuals who went to make, sustain and retain their fortunes did so with a loan.
It seems then, that debt incurred in the pursuit of a well - considered business proposition has delivered great wealth to discerning people who had a vision to be wealthy and prosperous.
Credit cards were designed for ease of transaction and eradicated the need for carrying cash but there is a big difference between using it for the consumption of luxury items compared to investing a cautiously considered amount in the pursuit of making more money.
There are three simple and time - tested steps to wealth - (1) start spending less than you earn (2) reduce or eradicate your bad debt and (3) invest the difference between your income and expenditure wisely.