Debt & Cash Flow

Borrowing money has never been easier — and that’s why it’s also easier than ever to find yourself in debt. But not all debt is bad debt.

Understanding the difference between good and bad debt, and having a plan to manage both, can make a real difference to your financial wellbeing.

Good debt

Good debt is borrowing that helps you build long-term wealth — for example, taking out a loan to buy assets that can grow in value or generate income.

Borrowing to purchase shares or an investment property are common examples.
In many cases, the interest on good debt may also be tax-deductible.

Bad debt

Bad debt is borrowing that doesn’t help you grow your wealth — such as using a credit card or personal loan to fund holidays or buy luxury items.

These types of loans generally aren’t tax-deductible and can quickly become difficult to manage.

How we can help

Managing debt effectively is an important part of creating financial stability and improving cash flow.

At Harvest Wealth, we can:

• Develop a debt management plan to help you pay down bad debt sooner
• Explore ways to use good debt strategically to build wealth over time
• Help you make confident, informed borrowing decisions
• Review your overall cash flow to keep you on track

Should you borrow to invest?

Borrowing to invest (also called gearing) can be a way to accelerate wealth creation by allowing you to invest more than you could with your own funds alone.

While it can magnify potential gains, it can also increase potential losses — so it’s important to have a clear strategy and understand the risks before proceeding.

To discuss your debt management and cash flow needs, contact one of our qualified advisers at Harvest Wealth Services on (03) 9557 3188.