Ipswich Financial Adviser

Posts Tagged ‘debt’

So what debt would you rather have? It is interesting when you start thinking about the consequences of the type of debts that many of us have.

Not all debt is necessarily bad, if you are borrowing money to buy an asset that appreciates in value or gives you a regular income or return, then the debt could be seen as being good. By borrowing money you can increase your overall wealth. The classic example of this is using a mortgage to buy a property. (but remember the bank can take the property away from you if you don’t keep up the repayments to the mortgage)

On the other hand ”bad debt” is taken out to buy something that falls in value or does not pay any sort of income or return to you.  Examples would be a car loan or credit cards. These debts can not add to your overall wealth.

What you want to do is repay any ”bad debt” you may have as quickly as possible and then look for opportunities to have “good debt” that could increase your overall wealth.

Remember borrowing any money always has a risk attached to it!! If you need any fianncial advice please contact Thompson Financial Consulting Ltd

Your home may be repossessed if you do not keep up repayments as your mortgage.