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How to Reduce Debt Faster?
I've got too much debt. How do I reduce it?
Sound familiar? It certainly does to us. In fact, this is one of the most common conversations we have with our Medical clients.
Before formulating an effective debt reduction strategy, we first need to understand precisely what type of debt we're talking about because, from a cost of servicing perspective, there's 'good debt' and 'bad debt'
Good debt is debt where you can claim a tax deduction for the interest. This includes loans for medical equipment and goodwill loans. Bad debt is debt is where you cannot claim a tax deduction for the interest cost. The primary source of bad debt is the home mortgage.
The real cost of bad debt can be almost double that of good debt! The huge benefit here is that the additional cash flow created by the tax deduction on the good debt can be used to pay down your bad debt much faster, saving you a significant amount of money in the long run. However, to take full advantage of this, you must have the appropriate structure in place.
That's where we come in.
If you'd like help with debt reduction, let's talk. It's a conversation well worth having.