Savers are losers and debtors are winners. – Robert Kiyosaki
Are you in debt right now and are struggling to pay the minimum every month? Maybe you spend your time worrying, and regretting the things you bought that put you in debt? Or maybe, you have no choice but to be in debt because you don’t have enough savings and an emergency hits you.
I should say, you are not alone. Most people are in debt, but not all people are in BAD debt.
There are 2 kinds of debt. Bad Debt & Good Debt.
The basic description of the two is that it’s bad debt if it makes you pay/ lose your money, the good debt however is the opposite because it makes money for you.
Many would say, “It’s not good to be in debt,” or “You stay out of debt if you want to save yourself from trouble!” Others would also go tell you to cut your credit card to avoid incurring debt or “Pay off your property quickly so you are not owing the bank interest” While this is good advice, having the right financial mindset will make you think analytically about why it is being said.
If you know how to use DEBT to your advantage, it will actually make you wealthy.
Why is having good debt good for you?
YOU CAN MAXIMIZE YOUR INVESTMENT MONEY
If you have saved enough money to buy another property, instead of paying the property in full, you can actually use it to leverage more properties. Instead of buying 1 property, you can buy multiple properties with the current money you have. With that, you are leveraging your money & the bank’s money. The money that the bank will lend you to purchase your property, you’ll pay it, and the interest using the cash flow or income that the same property will give you.
YOU CAN DIVERSIFY
When you use debt to buy property, you can maximize not only your investment money but also, you can diversify your savings through options. You can buy properties of the same value or you can choose a higher value & a lower value property.
Yes, you’re gonna have to pay your debt but take note that you’re actually gaining more than what you invested or borrowed.
YOU WON’T BE SCARED EVEN IF THE MARKET CRASHED
The beauty of looking at property as a savings mechanism is that it won’t bother you even if the property market is down.
Why? Because money will still flow inside your pocket. When the market is down, normally there will be a rise in tenants, so if you have a property that’s giving you cash flow every month through rent, your income on these properties won’t be affected.
All of these are, of course, should be done with proper research and logical thinking.
Yes, we can use GOOD DEBT to leverage on property, but we should also base everything on facts. Look into your current situation if you really can afford it so the good debt you have won’t become bad debt. And speaking of bad debt, if you are still in bad debt, make sure you get yourself out of there as soon as possible to avoid losing more money!
In property, having debt is really the best way to go.
Why? Because it will make you earn money out of other people’s money if you are wise enough to think about your options.
If you want to learn more about how you can leverage GOOD DEBT to gain or add to your wealth, we’re here to help you. Send us a message to get started.
