27 Apr There’s No Catch – Just Simple Math The Overlooked Strategy by Financial Advisors
Many of us have read the advice given by financial advisors – don’t use a line of credit.
Based on the way most people use a line of credit, it’s excellent advice. If you’re like most people, the experts are right. Let’s look at a couple of examples.
- You have no budget.
- You really want that home extension, new car or vacation.
- You withdraw dollars but have no idea how quickly you can repay the balance.
The interest that you’ll pay will be a lot more than the interest you’ll earn. This approach will not help you achieve your long-term goals. Every day the balance you owe is costing you money. This is what most people do. Don’t be like most people.
There’s a way to use a line of credit to build your financial wealth. It’s simple and it’s rarely discussed.
Shifting your income to the line of credit is the answer. Imagine the first month withdrawing $5,200 from your line of credit, making an additional payment on your mortgage and paying just five dollars in interest. Your mortgage will be paid in full 19 months earlier and you’ve saved over $20,000 in interest on the mortgage. This simple move cost you just $5! What a great way to keep your hard earned money in your pocket.
Solution: Use the bank’s money and not your savings to pay down your debt. Moving your income dramatically lowers the interest you’ll pay.
You’re in a unique position, you’ve got a budget, you’ve got your emergency fund and you’ve experienced the power of keeping your money working for you. You’re ready to use a line of credit to accelerate building your financial wealth.
By the way, this is not a new strategy. Banks provide this service to their best corporate customers. It it’s good for them, why shouldn’t you use it too?
In our next post, I’ll show you how easy it is to get started.