If you're part of our email list, then you know about the first time I considered taking a loan (if you aren’t - subscribe here for that and other juicy stories). I was really scared at first. I was afraid of borrowing more than I could pay back, not understanding my loan terms and ending up in a really bad contract. I was afraid of being part of the statistic of people who take 10 years to pay off their student loans, only to jump into a mortgage for another 20 years.
But, I had gotten way too far for lack of funds to stop me from attending Oxford.
I started seriously considering my options. I talked to alumni, people who give loans, business owners and advisors. The best insights came from people who had taken loans themselves, because they could share real stories of what went wrong or how they paid off loans quickly. They shared useful, practical strategies and were specific about what to look out for.
Thankfully, I already understood the principles of using debt to invest in business from my work in wealth management and investment banking. I just had to apply them to myself and to look at my degree as an investment.
For me this meant:
Doing a lot of research - finding out what types of loans exist, how I could take one without collateral, what different interest rates mean, what the impact of taking a loan in a different currency was.
Shopping around so I knew what my options were. I stayed away from lenders with tricky loan terms, so I was confident that I’d end up with a fair contract
Working with financial partners I could negotiate with - at work, we would negotiate with lenders all the time, but I thought this was because we were borrowing large amounts. My research not only showed me that I could negotiate, but I was also armed with specific tactics of what and how to negotiate.
Making a plan to pay off my loan quickly without changing my lifestyle drastically. This meant thinking about how much to borrow AND paying off my debt in half the time, so that I could make sure I saved on the overall interest I paid for my loan.
So I took a loan, confidently armed with a plan that would make sure I maximize my Return On Investment (ROI) and comfortably pay off my debt without it significantly affecting my lifestyle.
So far, I’ve stuck to my plan for two years and will be able to pay this off in another two (8 years shorter than the term of the loan). I will save thousands of dollars in interest and of course give myself wiggle room to take on other types of debt for my other financial goals like making investments.
For me, it was important that I was able to pay this debt off comfortably while still achieving my other financial goals. After all, I took this debt to improve my life, not to be in shackles.
I had this in mind from the beginning and so I am still investing towards future goals while building the life I want.
I am still enjoying my little pleasures - like the occasional glass of bubbly ;)
So here’s my question for you: What would using debt to improve your life look like?
It doesn’ t have to be getting an MBA like me. It could be taking a loan to fund an order or to buy your first home or to make an investment.
What I’d like to know is what your life would look like if you were able to use debt to improve your life. What would that mean to you? For you? Be specific.
Shoot me an email or leave a comment and let me know.