ST. CROIX INSIGHTS

I have several beliefs, but two are indisputable: it takes a long time to earn money, and it’s remarkably easy to spend it as freely as water flowing from a faucet. I like to call this “financial leakage.” Many people struggle with financial leakage, and for some, the situation spirals out of control.

What are some ways to accumulate bad debt? Credit cards, buying that big dream home, paying for a college degree in a field with no promise of employment, expensive cars or boats… the list goes on.

Good debt, however, involves investing in a business with positive cash flow or pursuing a degree that enhances employability and allows for prompt loan repayment within 5 years (not 20 or 30). There are instances where upfront investment can yield far greater returns in the future.

Debt sucks, but luckily, one of the most effective ways to avoid it is also one of the easiest: take a breather before making any significant moves.

Pause for a week or two to consider before you make a life-changing decision to take on debt. Give yourself the opportunity to reconsider that major vacation or spontaneous change with a clearer perspective gained from taking the time to think it over.

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Ask yourself- can my portfolio support my lifestyle in my retirement?