Investors with non tax-deductible debts
Eliminating non tax-deductible debt is the most reliable investment available in the market, and should be automatic for anyone who is developing wealth. Lets review a standard bank loan with an average interest rate of 8.25% during the life of the loan (cash rate has averaged 6.52% over past 18 years).
We consider any funds used, in addition to the banks minimum repayment, to be investment funds. With our standard debt reduction program, the return on this investment over 14 years, averages 52% per annum. Further to this given you are saving money not earning money, you do not pay tax on this gain. There is very minimal risk, you are putting your money into your account, and returns are as reliable as the bank wanting their money.
This is a very powerful strategy, however it is not without its limitations. Firstly there is a limit to how many funds to invest into this strategy, i.e. you can't borrow money and leverage the returns further. Secondly, as with many investments it is a long term strategy: the returns are moderate in the first two years, but the compounding advantages quick build and continue to pay a return, through the life of the debt.
Regardless of these limitations, the returns cannot be denied and debt reduction for non tax-deducible debt should be automatic for all home and consumer loans. Once all non tax-deductible debts have been cleared, you implement a similar strategy for you investment debt. To find how our programs work, visit our debt reduction page through our menus, or simply click here now.