With all of the debt ceiling debates and the Standards and Poor’s credit downgrade of the US, it is difficult to believe that not all debt is bad debt. Some debt can really hurt you in the long run, but there is some debt that can actually help you build wealth.
The first thing you should do when trying to assess your good debt, is figure up your own net worth. You can do this by adding up all of your savings, investments, and assets to determine how much you are worth in total.
Staying up to date on things like TLS Share Price is the only way that you will be able to put your money to work for you. When you have your net worth figured, it is time to sit down and review the rules for creating wealth with your debt.
When doing your evaluation, you should determine the amount of worthless debt that you have acquired. If you have financed things such as trips or expensive dinners, then you have worthless debt which will not help you in your wealth building venture.
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If you finance things that have no asset attached to them, then you will impact your net worth in a very negative way. This does not mean that you should not enjoy a nice dinner or relaxing vacations, what this does mean is that you should not finance these luxuries instead you should pay cash if possible.
The other benefit of paying for these things with cash is that you will avoid high interest rates and payments that may affect you in the future. You should only finance things that have assets attached to them such as houses or cars.
When trying to build your wealth with asset debt, you should not think about the initial price of the item. You should consider the long term value of the asset and how well the asset will retain its value.
For example, if you invest a great deal of money in a car, you need to know what the resell value is of that car to assess the potential money to be made from the vehicle. The same principle should be applied to other assets such as a home.
Generally, homes retain their value if you keep them in good shape over time. By doing minor upkeep and aesthetically pleasing additions, you can add to the value of your home. Adding to the value to your home can increase your return on the investment.
With the right amount of planning, you will be able to amass the wealth that you need to live life to the fullest.