On one hand, there is good debt where you borrow to invest and your investment grows in value or earns money. Good debt actually works for you. On the other hand there is bad debt where you borrow for a car, boat or use a credit card to buy items that depreciate in value and don’t earn you any money. You lose twice here – the capital value and the interest you’ve paid. That’s why before you start accumulating assets, it’s important to check what you owe – how much, in what form and at what interest rate. Then you can see whether you can arrange your debt more efficiently.
To defeat the insidious costs of small debt you need to look at consolidating your debt, streamlining your paperwork and rationalising your interest expenses.
Many people wait until their home loan is repaid before starting to invest. Unfortunately, this means they invest later in life, limiting the growth potential of their investments.
There is, however, a strategy that lets you invest now and continue to pay-off your home loan reasonably quickly. It’s called ‘debt recycling’ and involves three key steps:
Debt recycling may mean it takes a little longer to pay off your home loan, but you still have the potential to create extra wealth.
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Our Enjoy Factor is spending time in retirement with the grand-kids and having fantastic holiday adventures. - Jim & Connie Medew
My Enjoy Factor is volunteering for the Nakuru Hope Gabriel Learning Centre in Kenya. I get the ‘joy’ in my enjoy factor, from the smiling faces of those I am privileged to be able to help; those who so desperately need it. - Gayle Greenwood
Thanks to careful planning by our wonderful team at Provident, we have been able to travel around America and the United Kingdom enjoying the beginning of our retirement visiting family and friends. - Gerri Garland & Steph Mutch
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Paul, Greg and the team at Provident have become more than just financial advisers to us over the years and are as much friends as they are advisers. - John & Vicki Evans
Thanks Polly and Greg – you remove plenty of worry from my life! - Richard Murrell
Provident, Paul Carter and Greg Neill have done an excellent job organizing our financial affairs such that we can draw funds as needed to enjoy these fabulous overseas holidays. - Bob & Bev Berven