05 Jun 2017

Debt Levels

It really depends on where you are at and where you are pitching yourself in the market and how much you are actually having to borrow to get into the market that gives you an amount of passive income.

As you get older, as you get a little bit closer to retirement age your resistance might be a little bit higher. You might want to have a much lower debt profile in order to make things more positive.

In fact some of your strategies might be to actually use your years of wealth creation, where you’re in there generating and making things happen, to get chunks of money that you can actually reduce your debt levels so that the core investments that you have, that you want to have long-term in your retirement actually have fairly low debt levels.

As we see the economic climate change what you’re going to find is that more and more people will drift towards that style of positivity because it is a lower risk profile.

Those that are younger, that are active, often have a bit more of a ‘it doesn’t matter’ kind of attitude. They can get out there and go and get a job in the worst case scenario or they can go and do something else and have got plenty of time to make the money all over again. They may well have a higher debt-level profile.

Most people think when going learning about cash Positives and 100% borrowing that there is a very high level of risk, however that isn’t necessarily the case.  In a lot of cases, cash Positives are at a lower debt level, particularly as interest rates rise, and this tends to make them more favourable.

In order to have that lower debt level, something you may look at is actually manufacturing growth or getting chunk deals which produce sums of money that can be applied to your cash Positives that you are keeping long-term. By using this manufactured growth, over time, those properties become more and more positive because rents will continue to go up and your level of debt decreases.

We always recommend that you seek professional advice as this blog is for general information only