With all due respect, anyone who thinks that debt is a universally bad idea, simply does not have a very good understanding of debt.
With all due respect, there isn't a modicum of respect in telling someone they don't know what they're talking about. But for the record, I think my understanding of debt is above satisfactory.
100% of the time, debt on your ledger subtracts from your net worth, which also usually results in less available income to save, invest, or give. That's simple math. If you can show me an instance from your personal experience where that is not the case, I will gladly retract.
Well first, there absolutely IS respect in telling someone that they are incorrect. You changed it to "telling someone they don't know what they're talking about". That might be taken as disrespectful. But that is not what I said. You used absolutes, and I merely pointed out that you are simply incorrect. No disrespect there.
Second, if you think that debt is universally bad 100% of the time, then I must disagree that your understanding of debt is indeed above satisfactory. In fact it shows a very over-simplified understanding. But that is really OK. You are a Lawyer by trade, and most people do not understand debt, and its uses beyond their own personal experience with credit cards.
You seem to think that paying for something with cash is always better than credit. I would say that may absolutely be true in most cases....especially when viewed through the lense of your own personal experience. Does it make sense to finance that TV when you have cash? Of course not. And with most transactions normal people deal with, that holds true. But those transactions are not the entirety of what Debt entails.
Thirdly, and lastly, you ask me to give you a real world example where debt is the correct choice. I absolutely can give you many. However, you seemed to have moved the goalpost in your request. You now ask :
"100% of the time, debt on your ledger subtracts from your net worth, which also usually results in less available income to save, invest, or give. That's simple math. If you can show me an instance from your personal experience where that is not the case, I will gladly retract.". Regardless, I will respond:
-Debt is always offset by the asset it purchases, so it does not always decrease net worth. In many cases the value of the assets, or future revenue, more than offset the debt on the balance sheet.
-Debt can actually create MORE liquidity on the balance sheet that can be used for savings, investments, giving. it can allow for GREATER cash flow to be used for other things. If you used the cash, you would have LESS cash for those purposes, and less for expenses and emergencies.
So I answered your question....though the question didnt make much sense.
The ACTUAL question was....can debt be GOOD? Or, can debt be the CORRECT choice?
The answer is 100% YES it can be.
Here is the example you asked for, and I will expect your retraction. I deal with specific examples like this on a regular basis.
Joe Smith has a company. Joe has revenue of 2 million a year selling widgets. He has been in business 10 years. Slow and steady growth. Has 500k in the bank in cash.
Joe lands a contract for $1 million a year, but he does not have the capacity to fulfill that order. He has the ability to grow his revenue 50%, but does not have the cash, raw materials, machinery/equipment, or facilities to fulfill that order.
Joe goes to a financial institution to get a line of credit, to make sure he has the cash flow to support the operations for short term periods...usually the time from when he orders raw materials to when he gets paid on his receivables.
Joe also gets a term loan to finance the new upgrades to facilities, equipment, hiring new employees, etc. to support the new business.
Without leveraging debt, he loses the ability to grow his business. The interest incurred is a non issue compared to the increase in revenue for his business.
If Joe even can pay cash for all that growth (which is very rare), Joe then cant pay his employees or suppliers as he now has no cash.
DEBT allowed Joe to spread the cost of his expansion over say 5 years, which allowed the business to grow 50%.
Without the debt, that opportunity is lost. If he uses cash, he does not have enough cash flow to keep his company running, much less for emergencies.
Leveraging debt allowed Joe to take advantage of an opportunity to expand that would be otherwise unattainable, or by paying cash put his business and employees at high risk.
Maybe Joe has a very seasonal business. Maybe Joe has no revenue for large periods of time, so he uses a Line of Credit for short term financing. Keeping the doors open for the 6 slower months to pay his employees, until his receivables come in. It allows him to keep some liquidity available for emergencies as well.
Maybe Joe Finds out he can get a 10% discount if he can increase the size of his order from his supplier and pay cash upfront....instead of the smaller normal order with 30 days net.....but he doesn't have the cash flow to cover it. So if he gets a line of credit to pay for the much bigger order of raw supplies, he may pay 4% interest, but saves 10% on the supplies? Joe just netted 6%.
I hope these examples makes sense to you.
This is similar to the debt capital markets. Why do you think companies issue bonds? They need access to capital (cash) to use to expand/grow/operate their business. If they can get a 20% return on this borrowed cash at 5% interest.....is it better to get no return because they dont have the cash to use? Also, there is another positive effect of debt....to the people who own that debt. Bonds are a great investment for a lot of people for a variety of reasons....be it a fixed income, or a hedge to equities, etc.
I hope this example shows you how very important debt is, and how it can be used in a positive manner. In many cases it is a simple necessity.
If you can leverage the debt, and have your return be greater than the cost of that debt, then it is SIMPLE MATH that Debt can be good.
You seem to think that debt is always used to buy some consumer product that depreciates. In that one view you are mostly correct that debt is not the best course of action.
But there are a plethora of scenarios where debt can buy OPPORTUNITY and many other positives other than a depreciating consumer product. That is where you seem yo have blinders on.
I agree that there are many bad ways to use debt, but that is not what you asserted. You said it is always bad...I'm simply, and respectfully, showing that you are wrong.