What to do at first with our money is to pay off the debts or make investments. This question is the most common amongst the people and asked the experts. The most reliable and understandable statement could be paying off the debts at first and then investing.
What if we are not paying off the debts that will not generate any returns where making investments would generate higher returns and that money can be used to pay off the debts? This is a pitiful opinion that commensurate inside those who can wonderfully play with money.
Therefore, most people follow this brilliant strategy. Then they would not have fallen in debts. And the people who assert that the money collected from the returns on making investments are highly qualified people and likely to call as money gamer or businessman.
Through this blog, you shall be learning the concept of having the most reliable and sensible arguments related to going with paying off the debts. What can be the methods of paying your debts first sincerely and then go with another kind of investments to make money from returns?
Along with this concept, you will see the financial help. You can get with a friendly mode of exclaiming the problems and seeking its solution through direct lending.
What to do at first
If you own a business, then this thinking or say, philosophy can work for you. If you are in a job where you find less control over your money, this will not work.
Let us understand this with a simple example. What happens is, when you invest, as far as the maximum chances of seeking profits, the higher chances of getting losses. I have my mutual investment charter, and the maximum investments in my mutual fund are 30% down.
These investments will certainly generate returns, not today then hopefully after a month or probably a year. I am not disturbing the mutual funds and have kept it as it is and investing something. These investments would generate returns for long terms and not for short periods.
Therefore, going with the above opinion of paying off the debts by making money with returns on investments is undoubtedly not practical. You shall be with the chances of facing losses every time.
The other losses
The other loss of having debts is that you are with high and higher interests. If you have borrowed the money from external sources, then there shall be at least 2 per cent to 5 per cent, and some lenders lend money at the rate of 10 per cent.
And if we talk if returns, you get it on an annual basis and maybe 10 per cent to 20-25 per cent. It means that every time we see that returns are lesser than interests.
The third thing is, if you tend to pay off the debts with higher interest rates, then there would be significantly fewer chances to become rich on a long term basis.
Many studies have proven that those who became rich first managed their debts and paid them off with prior commitments. These debts are mostly based on personal levels, not related to business debts. When you pay off your personal debts, you feel relaxed.
When you feel relaxed, you can think positive for your business, make reasonable efforts and manage your money as you do not give your money and wealth to others.
With the payoff of your debts, you become mentally relaxed and do not have concerns about paying every month’s instalments, interest, and no anxiety about dealing with a collector. However, you must not have even worries if you have sunk in the deep well of debts and could not pay off your debts.
There are CCJ loans, made available by direct lenders. They are authentic lenders and support your financial bases by making it strong with monetary help with flexible paying off debts and interests.
Therefore, when you got your money and thinking of making investments or paying off the debts, then without making further discussions on it, you move towards the latter.
Believe me, when you do it, you are taking your first step in becoming rich, and in upcoming times you can make yourself rich.
What you have learnt
Be mentally prepared
The burden of debts disturbs our mental attention and to get rid of this, you must prepare yourself mentally.
- The first thing is to accept the truth of debts, and you are actually in debts.
- The second thing is to forgive yourself for the mistakes you committed in your past.
- The third thing is to try not to repeat old mistakes.
- The fourth thing is to take a firm decision to finish the debts.
Make plans for paying each debt
Make detailing of all debts and make them separate to deal with them quickly.
The best way is to write the maximum debts at first and the minimum debts at last.
After making the detailed list, then plan to pay loans and to set the priorities to pay them off.
Take continuous actions and plan
Orderly implement your plans by taking meagre actions. With doing this, you can keep on working with flexibilities and not much improvements.
Lisa Ann has developed a well-experienced professional career. From managing the staff of more than 50+ loan experts at Fastmoneyfinance to boosting the delivery of various loan offers, she has acquired many challenging roles to come out with the best results for the company. Lisa Ann is a Senior Content Author and the Chief Financial Advisor at Fastmoneyfinance. To back her massive experience in the UK’s financial industry, she has the postgraduate degree and diploma in Business and Finance.