I have defined already that money is quantifiable trust.

You got a number in your bank account, your wallet, your bitcoin address. It is the way humanity found to quantify how much good you have done to society in the past, and how much you are entitled to redeem in the future.

Another way of thinking of it is by assuming it is some sort of social credit.

Sometimes we don't have enough of such credits, to do the things we wish – to expend in the economy, to invest in business, to grow our career. But some of us have more than enough, and they are willing to lend their credits if you pay a decent interest rate.

When you borrow someone's else social credits, you are creating debt. Actually, credit and debt are the same thing, but looked at different angles. Ray Dalio has explained it perfectly in this video:

Good Debt vs Bad Debt

Some times we need permission to do something beyond our means. We need our society to believe in what we want to accomplish and provide us this credit to play in the economy our game plan.

When we spend social credits from someone else, we are acquiring the risk we may not be able to repay them and lose credibility (credit score) in our community. But if we are certain we are in the right path, we may generate more credits than we would without having borrowed in the first place.

That's the key difference of good debt and bad debt. It is deemed as good when we are able to generate more value, or to scale the value we already generate, by employing that capital. That's the reason why many actors take on debt (specially when rates are low).

We say a debt is bad when the return over the investment is inferior the interest we pay. That happens quite often when people borrow from credit cards to purchase consumer goods by impulse, and don't pay the bill when it comes.

I used to think we had to live debt-free to be in a good financial position. Today I can see it is stupid to not get a loan to leverage your plans, specially when you're sure you can multiply the capital easily.

As long as the debt is good, it is alright.