Putting Your Net Worth on the Fast Track

What the Industry considers bad and good debt…

It’s bad debt if you borrow money with usually high interest credit cards, to purchase items that quickly depreciate in value.

It’s good debt if you borrow to invest - you can benefit from a larger lump sum today and your interest cost is tax deductible! It usually applies to anything that is tax deductible and provides value as the asset appreciates.

Benefits of borrowing (Leveraging)…

Most people are unable to fund home purchases or take out an RRSP loan with a significant single lump sum. When managed properly, leveraging has the potential to accelerate the growth of your savings, achieve long term financial goals more quickly, and build a larger and more diversified retirement portfolio, etc.

If done incorrectly, it can have negative effects and present undue risks. It’s important to leverage responsibly with an amount that results in payments you can afford comfortably; this strategy may very well help you reach your financial goals.