You’ve been taught to associate debt with over-the-top impulse spending. When you hear the word debt you immediately think of someone that went out and purchased a whole bunch of stuff with little or no thought as to how they’d repay the money.
You use your access to credit sensibly by paying off debt balances at the end of the month. We hope that after reading this article that maybe you should apply for a loan from us because you could use it strategically.
When you can’t avoid debt
Whether you like to think of this or not there will be times when you just can’t avoid debt. If you intend to buy a home, you will need a mortgage. That’s the first strategic way to use debt because the house you buy now will undoubtedly be worth a lot more 10, 15, or 20 years from now.
Debt can also allow you to purchase things that you need but you’re unable to pay for even through savings. As an example of this, your roof could become so damaged you would need to replace it, and using debt to get the job done would be using it strategically to your advantage.
Using debt to further your education
It would be great if you could get your education paid for with a scholarship and grants or by your company, employer or by winning the lottery but for most people this just isn’t the deal. In this 21st century, it’s almost impossible to have a good career without at least an undergraduate degree. And in some careers, you’ll need at least a Master’s degree or even a Doctor’s degree. So how could you pay for it? You’ll need to enlist the help of student loans.
But, again, this is strategic debt because when you get a higher education you’ll be more qualified to obtain better and better-paying jobs and, therefore should have a much higher income over your working lifetime.
Using debt to create good credit
Like it or not, the time will come when you will need to buy a car, start a business or buy a house. When this time comes, you will need to have good credit. You may think you have good credit because you’ve been paying off your debt at the end of every month but you don’t. You’re what’s called “credit invisible”. And potential lenders will be hesitant to loan you money because you basically have no credit history so get a loan today, pay it off on time and build your credit history.
Using debt to start a business
Would you like to work for yourself or start some kind of a business? If so, there are a lot of things you’ll need that aren’t cheap. You may be required to purchase special equipment or build up inventory on top of your normal operating expenses. Plus, you’ll need to pay yourself and employees something and there may not be enough money left over after you’ve covered all your business expenses The smart choice here would be to get a short-term business loan so that you’d have the ability to make cover your expenses. Get one of these loans and this would help you get your business up and running, which, in turn, will help you earn money.
Using debt to acquire property
We’ve already discussed the first strategic way to use debt, which is a mortgage. Debt can be used to buy income property, which could literally help you on your way to becoming a millionaire.
The interest you pay on a mortgage will likely be tax-deductible as well as the interest on any loans you use to acquire income property. There are literally thousands of wealthy people who started out borrowing money to fix and flip a house, used the profit to buy a couple more fix and flip houses and so on to the point where they now own multiple apartment houses so now is your time to get a loan to buy that property you so much desire.