A useful way to think about millions and billions is with time. One million seconds is a little over 11 days. One billion seconds is about 34 years.

I think you and I actually agree, we just use different terminology. I understand why student loans and mortgages could be argued called good debt, I just simply choose to refer to them as "less sucky" debt. Either way it sounds like we both have similar goals, just different strategies.

Remember, when buying a house you've essentially made a gamble – you've borrowed at a certain rate in order to invest in the home – you are betting the price of the home appreciates at a higher rate than the interest rate on the loan. If this appreciation doesn't materialize, what has actually happened is you have incorrectly estimated your opportunity cost of capital – you expected the home to increase in value more than it did, and now you have lost money on the investment.

You need to realize that your personal opportunity cost of capital should be a risk-adjusted average – i.e. the rate you expect to earn over the long term (well technically, the life of whatever debt instrument we are talking about – so 30 years for a mortgage). That's why even if you have earned 25% in the stock market this year, you should not use that amount as your opportunity cost of capital – you should still use ~8%, which is your expected LONG-TERM return on invested assets. This 8% accounts for the average of both your +30% years and your -20% years – it is a long-term rate of return.

Notice I did not say a student loan or mortgage is inherently "good" debt, only that they are USUALLY CONSIDERED "good debt" because they typically have lower interest rates. It all comes back to the comparison to your own personal opportunity cost of capital. It is different for everyone, and estimating accurately is the whole key here.

In order to make the distinction, you need to first determine your own personal "opportunity cost of capital". This is a fancy economics term for the return you earn on money that you have saved. If all of your spare change is sitting in a savings account, your opportunity cost of capital is probably around 1%. If you have it in bonds, probably around 3-4%. Stocks, ~8%.

You can now make the distinction – if you can borrow at a rate that is BELOW your opportunity cost of capital, that debt is GOOD DEBT. Since I have historically achieved +-10% annual return on my savings (equities mostly), I would gladly borrow $1 million tomorrow (if someone would lend it to me) at any rate below 10%. I would then take the $1 million and invest as I usually do, pocketing the difference between the interest rate I borrowed at and the 10% return I receive on the invested $1 million.

This is why most people consider student loans and mortgages to be "good debt" – their interest rates are typically very low because they are either asset backed (mortgage) or government subsidized (student loans). It makes more sense to put your spare cash into an investment that earns 10%, rather that eliminating a debt that costs 5%. Follow?

My student loans suck – especially because I went to a crappy school, had half my credits transfer and still ended up taking $40K in loans. The $2K interest I get back (if that…), makes me classify that loan as "bad" debt.

Long story short – I think classifications of debt as "good" or "bad" are truly a personal decision. One size does not fit all when it comes to our tolerances for certain types of debt.