A short thread about my thoughts on Debt. 
One of the best investment you can make is to pay off your debt, whatever debt you may have.
I've accepted that the money saved on interest by not having debt, is better than any return you could get by investing your money, whether in the stock market or in real estate.
I've accepted that the money saved on interest by not having debt, is better than any return you could get by investing your money, whether in the stock market or in real estate.
I say that as an investment manager and someone who manages portfolios for a living. Interest is earned or it's paid. If you have debt, you're someone's investment and they are making a high profit off your lack of restraint.
If you continually miss payments or only pay the minimum on your balance each month, someone is making a fortune off you. Someone is making a fortune off you because you wanted something so badly, you deemed it rational to pay more than what it's worth.
I'm not judging, I've been there, done that, got the revolving overdraft, credit card and loan. It's taken me years of discipline and adhering to a stringent budget to dig myself out of a hole made of quicksand. I know that pain and hope to never go back.
A typical personal loan ranging between R1,000 and R200,000 with a minimum repayment of 12 months, and a maximum repayment period of 72 months, is typically calculated at 27.5% interest per annum. Absolute madness!
If it comes down to either or, pay off your high-interest debts, then invest your money into a low-cost, globally diversified portfolio over multiple decades (not months).
If you need help doing so, contact me on mduduzi@luthulicapital.com
If you need help doing so, contact me on mduduzi@luthulicapital.com
