DD: Des Deighton here with Jason Dwyer – managing director of station sponsor, Dwyer Property Investments.
Jason, you grew up on The Coast and have been involved in the local property market, most of your life.
JD: That’s right, Des. My brother, Wayne, owns Dwyer Quality Homes – one of the most trusted building companies on The Coast.
And we’ve been helping Queenslanders build beautiful homes and invest in property for more than thirty-five years.
DD: You’re going to talk about ‘debt’ today. Now to most of us, Jason, ‘debt’ can be a bit of a scary word...
JD: You’re right Des and yes, a lot of people think all debt is bad. But if it’s thought through sensibly, ‘healthy’ debt can deliver very good outcomes, especially when it comes to property investing.
DD: So, what’s the difference between ‘good’ debt and ‘bad’ debt?
JD: Debt is ‘bad’ if it’s used to buy something that will decrease in value and doesn’t earn you any money.
Things like car loans, loans for holidays or to maintain a certain lifestyle are unproductive forms of debt.
Credit card debt is particularly bad, as it usually comes with very high interest rates and can encourage excessive spending.
‘Good’ debt, on the other hand, has the potential to give you an income and increase your wealth. It can even be tax deductible.
DD: Give us some examples of ‘good’ debt.
JD: Taking out a loan to buy an investment property, or to start a profitable business… they’re the best kinds of debt to have, because they can make you money.
An investment property generates rental income to help pay-off the loan. The property also appreciates in value over the longer term and with compounding growth, that can be a substantial amount of growth.
DD: But isn’t the goal to be debt-free?
JD: Well, here’s a fact, Des. Very few wealthy people have zero debt. They’ll tell you… you have to spend money to make money, and property investing is an example of that.
With the plan I’m talking about, you can have a guaranteed, cash-positive return on the money borrowed to buy a property, plus capital growth.
DD: What’s the secret to managing ‘good’ debt, then?
JD: The key is to structure and leverage productive debt, correctly. Do that, and it can help compound your net worth over time, and give you confidence about a financially secure future.
DD: I’ve been chatting with Jason Dwyer. If you want to find out more about how ‘good’ debt can help you build wealth, visit the Dwyer Property Investments YouTube channel, or call Jason for an obligation-free chat today.