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How you can use debt to grow your wealth

Debt can be a great way to grow your wealth, if you know how to use it.

I know it seems odd: Get into debt in order to become wealthy. It sounds like it goes against everything you know about debt and wealth, doesn't it? Surely you should be concerned about getting rid of your debts, and not thinking about how to get into debt?

Well, it turns out that the wealthiest people in the world use debt to increase their wealth, because they know how to use debt as a tool.

The good news is that you can do this too.

The basics of using debt to grow your wealth

This topic is enormous, and I don't have space to cover everything, but here is a very quick outline.

The famous wealth author Robert Kiyosaki teaches others how to use debt to create wealth. In his cornerstone work, Rich Dad, Poor Dad, Kiyosaki wrote:

With each dollar bill that enters your hand, you and only you have the power to determine your destiny. Spend it foolishly, you choose to be poor. Spend it on liabilities, you join the middle class. Invest it in your mind and learn how to acquire assets and you will be choosing wealth as your goal and your future.

Kiyosaki's view, one with which I agree, is that good debt is debt that makes you money.

As a professional with good income, you can choose either:

  • to use debt to create liabilities (like a home you live in)

  • to use debt to make you money.

This is what the super wealthy mean when they say, 'don't work for money'. Kiyosaki calls it making money work for you.

How do you take this pathway?

Before you decide to go down this road, there are two things to consider.

First, you must acknowledge that your decisions are often emotional decisions, especially when it comes to money. Investing requires you to make decisions with a cool head. If you tend to react to things, rather than think clearly, rethink whether investing is for you. You must be able to make decisions with clarity.

Second, you will still have to mitigate risk. For example, relying entirely on rental income to pay your loan in a fickle or difficult market carries a high level of risk. You might not be comfortable with that or know how to mitigate it.

Both are valuable reasons on their own to contact a mortgage broker.

I'll show you why:

On the one hand, your broker will help you to see situations clearly. This way, you can make a good, emotionless decision, even in a time of crisis.

On the other hand, your broker will make sure that you can manage repayments on an investment property, even if you have to endure a period without its cashflow.

And finally, your broker can help you obtain a clear understanding of the best areas in which to invest. By giving you access to property data and property trend analyses, you will be able to decide where your money will best work for you.

There are many options for structuring your debt so that your money works for you

These options include interest-only loans, which are valuable when you're working to pay other debts that don't have a tax benefit. They are also useful as entry-points to investing, particularly if your property's value is going to increase substantially. Contact me for more options and alternatives.

Working with a mortgage broker by your side, you will come to understand:

  • the best way to structure debt to meet your circumstances, goals, and objectives

  • the types of debt that will work best for you, and why

  • how best to manage repayments, which is particularly important if your goal is to expand your investment portfolio

  • shifts in the market and how best to prepare for times both good and bad

  • how you can use debt to build your equity.

Most importantly, they will be able to help you shift your loans so that your money is working for you, and not against you.

Start making your debt work for you!

Call me today on 0423 515 251 for a conversation about how you might be able to use debt to grow your wealth. It's free, there is no obligation, and the outcome might give you a happy surprise.


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