Why is debt important to wealth?
Technically, you don’t need debt to create and have wealth. For most people, debt is part of their wealth. Whether it be for a home, car or just credit cards, most of us have it.
As a result, we need to manage it to minimise its costs and maximise its benefits. Good debt management can substantially improve your wealth and cashflow.
Whenever you are looking at investing for your financial future, you should always look at your debt and work out how you can use it to your advantage. I know that for many of our clients that we do financial planning for, we use debt recycling. Debt recycling just allows you to recycle non-deductible debt (like your home loan) for deductible debt.
Apart from this, using appropriate amounts of leverage in an investment can help give you greater returns over the long term. However, like everything with your wealth, prudent management needs to take place to ensure you get the most out of it.
If you aren’t sure about how you could manage your debt better, the best thing you can do is get professional assistance.
Owner of PCR Accounting & Advisory, Peter Marmara-Stewart is a top-tier accountant and financial advisor dedicated to helping clients reach their business goals and achieve financial freedom. Peter is highly regarded for his client-focused approach and entrepreneurial spirit, catering to a diverse range of professionals across a wide scope of industries all across the country. Peter’s expertise can help you plan effectively, set goals, maximise profits and protect your assets. Get in touch today on (03) 9847 7516.