I'm getting tired of all this "live debt free!" nonsense. There's good debt and bad debt, and people like this should learn the difference before giving financial advice.
That's the "norm". That's what "everyone" does (everyone who is in a first world country and has a decent job).
Is that somehow "smart debt"? Really? What's so smart about it?
It is smart for whomever loaned that money out ... they get back free money paid consistently over the years. How is it smart, in 90% of the cases, for the borrowers?
Our culture tends not to see this in the same way fish don't see water.
http://www.nerdwallet.com/blog/credit-card-data/average-cred...
Now explain why the same logic doesn't apply to a landlord being the smart one, and a renter being the dumb one.
If you can do that great.
But if you're about to finance your second new car (0% is not free money, that means that you're paying more for the car than you should have to because I can always get a better deal paying cash than someone that takes a 0% loan, and that's an indication that you don't understand this stuff nearly as well as you claim) or if you plan on getting a third credit card to pay off the previous one and you wonder where all your money goes then this post is for you.
Regarding a mortgage and 2 car loans, I'd like to offer a defense of why it's smart / good debt.
The primary reason that your mortgage is considered "good debt" is because the asset you purchase with that debt (your house) will typically appreciate faster than the interest you pay. I'm not including black swan events like the 2008 crisis. When you eventually sell, you'll be in the black.
Regarding car loans, the only type of "smart" car loan is 0% financing. A 0% loan lets you keep your money in your pocket for longer (and in that time, you can invest it however you see fit). 0% loans can be found depending on when you see the dealer. End of the month? Quota wasn't reached yet? Perfect time to negotiate.
I'm certain jaquesm's point is that lots of people get in over their head with their purchases, especially large purchases like homes and vehicles. However, DontBeADick's point has some validity: Taking on debt can allow you to realize further gains than you would have otherwise seen (basic leverage).
Any money manager will tell you that what you just said is false. Excepting a few cities, when you look at the data and adjust for inflation, owning a house is not a particularly good investment ( http://files.foreclosureradar.com/images/foreclosuretruth/Hi... ). Add in that the average home loan lasts about 6ish years before folks sell/refi, the fact that interest/fees are front-loaded into the first 5 years of the loan, and that avg. annual maintenance on a house (NOT improvements) tend to average about 1% of the value of the home per year, it gets worse.
What it CAN be (if you're disciplined and lucky) is leverage and liquidity. Example: I have my house paid off. I get a mortgage on it, essentially getting a loan at 4% for $700k. Now I have $700k that I can make work for me-- a worthwhile idea if I can find a way to make more than 4% on that $700k via other investments (which are not remotely risk-free, but can pay off). Of course, what most people do when they re-fi their house is self-indulgent stuff-- buying a vacation home, a boat, home improvements that don't pay for themselves, etc.
Compare (+equity -mortgage -maintenance -taxes) to (-rent)
As for a mortgage, as others have explained in this thread, it could be a smart debt given the right conditions. For example, if I had a bank loan to buy a house with the similar value to the one I currently rent, I would be paying a smaller amount of money to the bank than what currently is being transferred to my landlord monthly. I could live forever without a mortgage, but in 30 years time would find that I had spent a lot more then if I did.
It's not all 'several loans = bad money management vs no loans = good money management' sadly.
It's sorta a UI problem. The simpler, the better for the average person. "Live debt free" is painfully simple and it'd be a great start for most people.
Risk, like debt, is not always a bad thing, as long as you're informed and understanding of it.
As Daniel Kahneman said in 'Thinking, Fast and Slow', people ought to take more opportunities with risky outcomes with positive expected values - some you will lose, but over your life, taking a large number of these risks will result in a positive outcome.
(Obviously, only take risks where the negative outcome is one you can get through, i.e. it won't kill you, or leave you completely penniless etc.)
Hint: don't be a dick.
Look into the concept of leverage sometime.
It's not about how to allot your surplus millions, but about dealing responsibly with the income and the debt that most ordinary, middle class people have.
On a side note, based on your tone, I'm guessing that your username is based on how people refer to you. Cool it.