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When people talk about debt, it typically has a negative connotation to it. If used improperly, debt can be a huge stressor and a drain on your finances. However, if leveraged properly, you can use debt to make you wealthy at the end of the day.
Consumer debt is the one with the negative connotation. It includes things like credit cards, car loans, and basically anything else that doesn’t pay you. As we build your investment portfolio, living within your means and avoiding as much consumer debt as possible is key. It’s a hard temptation to resist, but if you do, you can use your debt to build something in the future and buy what you need without taking on debt.
Now, let’s look at income debt. This is debt that actually makes you money. One example is the income you receive from a rental property that you own. This is a simple concept, but unless we put it out there, it’s not going to happen. My job is to help you understand that there’s a big opportunity to use debt to your advantage in this market. There’s a lot of confusion out there, but I’ve been buying properties for a long time.
At the end of the day, if the deal works from a cash flow perspective and you have an interest rate that’s locked in for the life of the loan, it will work as well today as it does 30 years from now. You want to invest your money somewhere, get it working for you, and make a lot of money over time.
If you have any questions about using debt in a good way or how to stop using it in a bad way, don’t hesitate to give me a call or send me an email. I would love to hear from you soon.
