Rules for Going Into Debt

RULE: Only go into debt for items that provide a positive return on your money (Return on Investment).


As a guide no credit cards, no personal loans, no store cards. If you do decide to go against this guide then minimise the amount borrowed. By all means use reward schemes and incentives but not when they are tied to debt as this becomes an incentive to get into more debt.

How to Avoid Debt

Save, allocate and then spend. As you build up a nest egg it will provide a return thus accelerating your savings via compound interest, or direct investment. Passive income can pay for purchases or pay a lease on a depreciating asset.

Just remember that while you are paying back debt, initially most of your payment doesn’t pay off your debt, it goes to the lender as interest, so your balances decline ever so slowly. Using debt always keeps you behind but it does satisfy your short term goals.