Debt Management

Borrowing money is easy these days and that’s why it’s even easier to get into debt. Seeking debt management from a professional can help you take back control of your finances and your future.

But, did you know, not all debt is bad debt?

Having a debt management plan in place and understanding the different between good and bad debt could help you make better financial decisions. 

Good debt

“Good” debt is when you borrow to invest to purchase wealth-building assets – meaning assets that are likely to increase in value over time and/or give you an income. This kind of debt may also be tax deductible.

An example of good debt is borrowing to purchase shares or an investment property.

Bad debt

“Bad” debt is a loan used to purchase non-income producing assets and where the interest on the loan is not tax deductible.

Using a credit card or a personal loan to fund a holiday or to buy luxury items are examples of taking on bad debt.

How we can help

Knowing how to manage your debt can help you take control of your financial future and manage your cashflow.

We can recommend a debt management plan to help you pay down your bad debt whilst using good debt to build long term wealth. 

Our adviser, Luke Marton, is well practiced in debt recycling and has been implementing these strategies for clients for almost 2 decades. Reach out to us today and find out if debt recycling is right for you.

Should you borrow to invest?

Borrowing to invest (also called gearing) may help you accelerate the process of wealth creation by allowing you to make a larger investment than would otherwise be possible. This greater exposure gives you the potential to magnify your returns, but can also magnify your losses.