Understanding Debt: The Good, The Bad, and How to Manage It
Debt: Easy to Get, Tricky to Handle
It’s pretty easy to borrow money these days, and that’s exactly why it’s easy to end up in debt. But hold on – not all debt is a monster! Knowing the difference between good debt and bad debt, and having a plan to manage it, can really help your financial game.
Good Debt: Your Financial Friend
Think of good debt as a helpful tool. It’s the kind of debt you take on to invest in things that could grow in value or earn you money over time. Sometimes, this kind of debt even comes with tax benefits. For example, borrowing to buy shares or an investment property can fall into the ‘good debt’ category.
Bad Debt: The Not-so-Great Kind
Bad debt is the opposite. It’s for buying stuff that doesn’t earn you money or grow in value, and you don’t get any tax perks on the interest. Classic examples? Using a credit card or a personal loan for a holiday or luxury items. That’s bad debt territory.
How We Can Guide You
Managing your debt wisely can really put you in the driver’s seat of your financial future. We can help you figure out a debt management plan that tackles the bad debt while using good debt to build long-term wealth.
Should You Borrow to Invest?
This is all about ‘gearing’ – borrowing to invest. It can be a fast track to growing your wealth because it lets you invest more than you could with just your own money. This means you could see bigger returns. But remember, it also means you could see bigger losses.
Ready to Talk Debt Management?
If you’re thinking about your debt situation and want some expert advice, our qualified Financial Advisers are here to help. Give us a call, and let’s get your debt working for you, not against you!