At Liston Newton Advisory we help you determine the best strategies to manage your debt. We say manage, because a debt doesn’t have to work against you—in some cases, debt can be a useful way of generating wealth and building your asset base.
But it still needs to be managed. Our credit license enables us to assist with your debt consolidation, so you can reduce your overall interest rate and pay down your debt sooner. We work with you to identify which strategies will be most appropriate for your current financial situation and future goals, so we can help you achieve financial freedom sooner.
Debt is often multifaceted, so we offer financial planning, lending advice, and tax advice as part of your payoff debt strategy.
Our expert team has over 40 years of experience helping our clients make debt work for them. We help you better understand your options, and empower you to eliminate unnecessary debt.
Our trusted network of advisers, banks, and a panel of over 25 lenders provide you with more power to make better decisions in managing your debt.
Your debt shouldn’t be overwhelming. We work with you so you fully understand your cash flow decisions, and are comfortable with the plan we build together.
At Liston Newton Advisory, our investment strategy team help you understand the nature of your debt. While it can feel like a burden, in many circumstances debt can actually help you achieve financial freedom sooner.
We use financial modelling to determine when, and if, you should pay off debt. We can also look at strategies to pay down debt on your home, and then re-borrow for other investments, so the debt becomes tax-deductible and can accelerate your wealth-building capabilities.
It’s all about helping you understand how to make your debt work for you.
We have worked with Liston Newton's Accountancy and Advisory Team for over a decade. During that time, our business has grown substantially both organically and through purchases. This wouldn’t have been possible without Liston Newton Advisory to assist with our business planning, providing proactive advice and ensuring our accounts were always compliant in a complex and volatile industry.
Liston Newton's Accountants analysed our financial and business situation and helped us implement strategies to improve our position. Their strategies turned our business from making a loss, to recording a 6-month net profit of 36 per cent. And we are now on track to show a 240 per cent increase in turnover over the next financial year.
Liston Newton helped us move our accounting over to Xero. Their Accountant managed the set up and training so we felt comfortable with the software. We now have all our processes streamlined which gives us improved visibility of our business performance. This has allowed us to open 2 more stores without a significant increase in administration effort.
Smart debt payoff and management needs the right advice. So work with a financial adviser who understands you.
Get the support, advice, and guidance you need to manage your debt, and use it to achieve your financial freedom faster.
The right time to pay down debt will always depend on your personal situation.
There are three key factors to consider when assessing the merits of paying down debt: first, your comfort level with debt. Second, the interest rates on your debt. And third, the tax effectiveness of your debt.
Your comfort with debt is the most important factor. Regardless of how cheap the interest rates on debt may be, if your debt levels are keeping you up at night, then you should prioritise working to pay off debt.
The interest rates on your debt will be the second key factor in when or if you pay down debt. In recent years the cost of debt has got cheaper. Therefore, it can make sense to invest your excess cash flow rather than prioritise paying down your debt. For example, a home loan debt can be as low as 2%, while the return on investing in shares can be as high as 8% per annum. Paying down your home loan is the same as getting a 2% return on your money.
The other key consideration is the tax effectiveness of your debt. It can make sense to ensure you pay down non-tax-deductible debt over tax-deductible debt. This can mean paying down the loan on your primary place of residence rather than your investment property.
Debt consolidation can be a smart way to reduce your overall interest rate and pay down debt sooner. Debt consolidation works by taking out a new loan at a lower rate to pay off a number of other loans you may have at higher rates.
For example, let's say you have a home valued at $1m and a loan against the home of $500k. You also have 2 credit cards with a total of $20,000 owing on the cards. The credit cards are charging 15% per annum. You also have a car loan of $30,000 at a rate of 6%.
It may be possible to draw down a further $50,000 against your home to payoff (consolidate) the credit cards and car loan and instead of paying 15% or 6% on the debt, you reduce it down to a home loan rate under 3%.
Like many questions relating to financial advice, the short answer is: it depends.
Good advice always depends on your individual circumstances However, it’s possible to educate yourself on the outcomes of each choice.
Conventional wisdom has usually said you should pay off your home as quickly as possible and then turn your attention to building a nest egg.
The main aspect to consider is the return you can get on investments in your super vs. the interest rate on your home loan. With home loan rates at record lows in recent years, it can often make more sense to get a 7%-8% return from money in your super, rather than repay your home loan which is effectively the same as earning 2 to 3% per year.
If you do decide to invest in super rather than payoff your home loan, it all comes down to planning. You may choose to prioritise investing in super for a period of 10 years. At the end of that 10 years, you may then access your super and use some of this money to pay down the loan. If you plan correctly, you may be able to achieve both goals of building your super and repaying your debt — it's just the timing is different.
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