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There are 2 things that most people ask me once they’ve found out my background as that is;
- How do I get out of debt…… and
- How can I get an investment property?
Okay so you’re in debt and yes you want to know how to get out of it as fast as possible.
Then you want to know how to start investing in property because having the ability to drive past and see your investment is what we Australians love to do.
We have a love of property.
1. My answer to the first question is if it’s credit card debt then cut up the card.
This can seem a little extreme for some when they have come to rely on it, but if you can’t manage to pay or sweep of the balance owed at the end of each month then my solution to this is to look to a getting a visa debit card facility.
Essentially, they work the same but you are using your money not the banks and you won’t incur the hefty penalty rates for not paying the balance off every month.
This is a great a solution as you only spend what you have in your account.
Regardless whether it’s credit card debt or other personal debt – there is a system that you can follow that will see you paying your debts off in no time.
There’s a worksheet you can download that will help get you started to working out which debt to pay off first and you can access this worksheet HERE.
2. So, in answer to the second question I get asked about buying an investment property.
I gently say to people that you shouldn’t be thinking about investing until you get your debt under control and start to have some disposable income available.
There are other ways in which a person can get into an investment property even if they have some debt and that’s if they have equity in their home.
For those that are not sure what I mean by equity it means that if your home is valued at $450,000 and you owe $400,000 on it then the $50,000 difference is known as equity.
You also need to take into account your credit rating, which is affected your ability on how you are paying any outstanding debts off.
Understanding how your credit rating affects your ability to borrow is something I will talk more about in another blog.
So, that’s it the top 2 questions I get asked.
Until next time…to your financial health.
and the team at Financial Management 101