Bad debt versus good debt
One of the most confusing things for people with regards to investing and planning for retirement is getting comfortable and understanding what is good debt. Most of us have not been taught this by our parents. We were told to pay cash for everything and owe no one anything. How things have changed.At Think Money, we teach people that to be able to retire comfortably you need to have good debt, property investment preferably. Of course, if you can pay cash for all your properties and not owe any money well lucky you, but if you are like most of us, working and living life with kids, etc, etc., that may not be the case.First, we focus on reducing your home mortgage. We then teach you how to use equity to build a property portfolio by using OPM… other people’s money i.e. the Banks! We focus on teaching you how to cash manage so that you know where every dollar is going. We also help you set up tracking systems so that your personal income is separate from your investment income.We teach clients about the value of money. How money sitting in a bank account will devalue over time and how to use it towards paying off an investment property that will help you grow an income in retirement if not before.Understanding the holding costs and how to manage them are critical parts of the process, and once our clients understand this and manage this process ongoing, it all becomes pretty clear that having good investment debt to pay down wins out every time.
We teach clients about the value of money.We repeat this information time and time again here at Think Money, after all, why would you change something that works so well!If you would like to know more feel free to come along to one of our educational events. Simply go to https://thinkmoney.com.au/eventsLook forward to seeing you there.Kind regards Lynn