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Smart Debt Strategies
for a Secure
Financial Future

Use Debt to Advance Your Future

Ask yourself two questions: Is acquiring debt sooner really better? Can I pay off debt in a reasonable timeframe? Using debt to advance your future is a powerful concept, yet one that should be approached in a mature way.

Before you incur debt for anything, you need to ask yourself the following hard questions:

Is it worth it for me to finance this in order to acquire it sooner rather than later?
Can I pay the debt off in a reasonable amount of time?

Is Acquiring Debt Sooner Really Better?

Starting or buying into a business. 
Often the opportunity may be right at a specific time. The income from the business will generate enough revenue to pay off the loan, with interest, and then some. If you wait, the opportunity may be gone. So in this case, sooner is better.
Capital Direct Tip
Buying an income property. 
If you plan to buy a property that produces rental income, the sooner you buy, the more income you will get. Therefore, sooner is better.
Capital Direct Tip
Financing an education.  
In today's global economy, education is becoming a requirement not an option. If you have the opportunity to go back to school for say an MBA, the sooner you do it, the sooner you will enjoy the higher income. Sooner pays off in this scenario.
Capital Direct Tip

Here's how that works. Let's say you are in a 40% tax bracket meaning that for every dollar you earn, you pay 40% in income taxes. Let's say you are paying off a loan at $1000 per month. In the first year you would pay $3942.99 in interest. Because the loan is a business expense, you receive 40% of that amount or a $1577.20 tax return. This is equivalent to a significantly lower interest rate.

This tax advantage could apply to:
  • A business that you started or bought into.
  • Renovating your house to create a rental apartment.
  • Buying a rental property.
  • An equity investment in a Canadian company.

When considering the tax implications of an investment, you should always consult a certified accountant or your financial advisor.

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