Reduce energy costs by lowering the thermostat on your hot water heater to 49º C or 120º F. Make sure the caulking around windows and exterior doors is adequate to reduce heat or cooling loss.
Convert Mortgage Debt into Tax-Free Debt Over Time
If you don't have a matching asset to sell and re-buy, you can gradually convert your bad mortgage debt to good tax-free debt through a systematic process. While financial advisors sometimes package this process as a tax-free mortgage, there are limits to how much tax sheltering you actually achieve.
The mechanics are that you re-borrow a portion of each mortgage payment and invest the money in stocks or equity mutual funds. The money you re-borrowed is now good: debt where interest payments are tax deductible. As you start to pay interest on the equities, you will generate tax returns, which can be used to pay off the mortgage more quickly.
The added equity in your home allows you to borrow more, and grow your investment portfolio faster. The process creates an accelerating snowball effect.
The result can be years taken off your mortgage with no increase in payments.
It's important to note here that you are incurring debt for the equities at the same rate as you are retiring debt for your home, so your debt level remains constant. Once your mortgage is paid off, you are still in debt, but the investment portfolio you've acquired balances your liability.
It is essential that you consult an accountant or certified financial advisor if you want to follow this strategy.
Tips To Turn Bad Debt Into Good Debt
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