Debt free living is achievable for anyone. I like to think that rather than trying to eliminate it completely it can be used effectively to get you closer to your goals. Having a debt against your name can be a very daunting and intimidating thing for a lot of people. What a lot of people don’t understand is that in some cases is that debt does not necessarily have to be a bad thing.

Debt can be used to borrow for things you would not normally be able to afford and for that reason I think of it more as a tool than anything else. Debt free living can wait till you have used debt to your advantage and then no longer have a need for it.

It can also be tax effective for certain purposes and in some cases claimed as a deduction. Imagine when tax time comes around it may actually be beneficial to claim against some of your debt

When i say debt free living it is important that to get to this point you need to actually use debt to your advantage, of course eventually nobody actually wants to owe anyone money so firstly lets use debt then eventually become debt free.

If you are borrowing to invest in either a stock/share portfolio through a margin loan or borrowing funds to purchase an investment property then more often than not the interest payable for borrowing these funds is tax deductible. In a lot of cases the money you can earn from the borrowed money can actually be more than the cost of borrowing making it extremely attractive!

Now of course there is the debt that is not so good, the debts you might have from borrowing to buy that flashy sports car for example. In these cases usually personal loans are used with high interest rates and of course the loan is also unable to be used as a deduction in most instances.

This is not good debt and before commencing any sort of savings it is best usually to try and pay these sorts of loans off. The same rule applies to credit cards as well.

In my opinion the easiest way to explain it would be to eventually acheive debt free living there are two forms of debt a person can hold.

• Borrowed Money to Invest = Good
• Borrowed Money to Spend = Bad

Even your own property you live in should be considered under the latter and you should try not to have an extremely high amount of money borrowed for your property and pay as much of it off as possible

You should really try to think of good debt as a helpful hand to get you started. Don’t over do it and do not go outside your limits. Keep a track of all your records and do your research and you will be fine. A lot of the time if things were to go pear shaped you still have the original investment you bought with the debt to trade back to the lender.

At the end of the day though sometimes you have to take risks and of course there is a chance you could lose some money if you didn’t use the money correctly. At the same time there’s also a chance you could walk outside and get hit by a bus. Debt is a tool to be used to your advantage think of it as tool not a ball and chain tying you down.

This advice should be considered as general advice only and before electing to use debt as a wealth building tool if not skilled in that area the advice of an expert should be considered.

Visit my website at http://www.passive-income-success.com for more information on getting your passive mindset working for you.