Don't give up this debt for 2 reasons:
1. That you are making higher returns from it than the interest rate that you have to pay. (If this is not the case, then you should pare it down)
2. It is not easy nowadays to get such leverage of 10x your annual income.
In the current climate of low loan interest rates and high inflation rates, it is the borrowers who stand to gain. A $1m of loan in 10 yrs will only be worth $700k+, just due to inflation.
So if you are able to put that $1.2m in an investment that can minimally keep up with inflation, you would already gain. Stocks and shares are quite easily beat inflation.
Quote:
Originally Posted by Unregistered
I'm an average Joe, keen on picking the brains of the many successful people here.
Debt= 1.2 mil
Savings= 150k
Income= 120k p.a.
Passive income: 80 k p.a.
I wonder if this is the time to deleverage. As you can see, I'm rather highly geared vis-à-vis my relatively low (work) income.
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