My advice pay off your debts and overpay on your mortgage

My best advice

Pay off all bad debt as soon as possible.

This includes credit cards, overdrafts, mortgages, car loans. Pay off the ones with the highest interest rates first.

If you have credit card debt consider doing a balance transfer to another card. There is usually a fee of around 3% although you then get no interest charged until the end of the offer period which can be up to 24 months! Just make sure you always pay the minimum amount each month. The easiest way to do this is set up a direct debit to pay the minimum amount each month.

Mortgages.

Pay extra off or reduce the term. Especially in the early days of a mortgage very little capital is repaid. I always viewed the monthly payment as mainly interest and worked on regular overpayments to reduce the capital.

My tips to pay off your mortgage early
I have heard at least one person paying their mortgage off within 4 years. 25 years is the normal term for a mortgage but if you can reduce this to say 20 years or less you will pay much less interest in the long run and you might be surprised what little extra per month you have to pay.

Buy assets

As the author suggests in the book rich dad poor dad, buy assets not liabilities.

An asset is something that makes you money, a liability is something that costs you money.

Examples of assets include:

• Property that you let out
• Stocks and shares that pay you dividends

A liability is:

• A car
• Luxury items