Monday, January 9, 2012

I owe, I owe, so off to work I go...

Sounds like the song of the modern city worker. Mortgage, car loans, credit card bills, the list is long but the message is clear: we need to manage our debt. Managing your debt is an important part of investing. In fact, do not even bother to invest your money if you have bad debts floating around. There is no sense in earning 7% from an investment if you are paying 20% interest on a loan. Start paying those with the highest interest and work towards keeping your debt at a comfortable level relative to your income; and stop taking on new ones.



Remember the saying:

Gold is the money of kings,
silver is the money of noblemen,
barter is the money of peasants,
debt is the money of slaves.

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