C. Debt Management

This is the third priority in building a solid financial foundation. We have dedicated Chapter 3-4 to share our experience, ... our harrowing experience on debts. I know a lot of people would be able to relate to our own story.

Debt indeed has to be managed, or else, debt will manage us. Managing debt comes after the basic protection, but is a priority over building emergency funds , and investing for the long term. Let us share why this is so.

Say you have 50 thousand to invest but you have a debt of 50 thousand. The question is do we invest the 50 thousand or do we pay the debts? The recommendation we would give will be based on the prioritization discussed earlier and on the interest payments on the debt incurred, and the projected investment returns. If you pay up the entire debt, you free yourself of the worry. However, you definitely leave nothing to your family in case something happens to you. But if you allocate appropriate amounts to your short term and long term healthcare, as well as your insurance protection, then, you can really rest in peace literally.

to be continued....