Michael Wagner Discusses the Benefits of Not Paying Off All Debt with Report Door
Lower interest rates can often bring a vast amount of benefits for investors. It can help stimulate economic growth, move the markets into greener territory and make it less expensive and easier to borrow money. Low interest rates can also make it advantageous for investors to hold onto specific types of debts, even as rates slowly increase. Report Door recently turned to Omnia Family Wealth Co-Founder and Chief Operating Officer Michael Wagner to learn more about why holding onto the right type of debt should not be taboo.
“Leverage is not a terrible thing at the moment,” Wagner tells the publication. However, it is crucial to know which types of debt to keep and which to get rid of. “It’s the whole idea of good debt and bad debt,” says Wagner. For example, good debt often includes lower-rate, secured credit such as mortgages, home equity lines of credit and credit lines on securities accounts. On the other hand, credit cards with high interest rates likely fall into the bad debt category.
Another factor to consider when debating whether or not to keep certain debt is its emotional toll. If lower-rate, secured credit is causing too much stress, then it may be a better idea to pay it off than it is to keep it. “If it’s going to keep you up at night that you have this mortgage hanging over you, then pay it off,” explains Wagner. “You have to be very mindful of the emotional aspect of these decisions.”