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• lenders actually analysed each borrower’s ability to repay
• borrowers actually had to have a job or other source of income
• borrowers actually had to have proof of a savings record, proof of income, proof of assets
• lenders had to actually think about how each debt would be repaid, instead of just shovelling money out the door
• lenders actually retained the credit risk and retained the ownership of loans, instead of just selling them to unsuspecting bond-holders on the other side of the world.

His banking and finance career included several senior executive roles at major Australian and international banking and finance groups, including running branch networks, lending operations, product development, pricing and financial control. His formal qualifications include a Bachelor and Masters in Law, a Bachelor of Arts in Economic History and a Graduate Diploma in Applied Finance and Investment. He has also lectured for the Securities Institute of Australia. Since ‘retiring’ at 40, he has been a director of several companies, including listed, private and not-for-profit companies and a charitable foundation.

Ashley is the principal of Investing 101 Pty Ltd, a specialist investment research firm that holds an Australian Financial Services Licence. He is a sought-after speaker and commentator on financial markets and has written two best-selling books on finance: How to Give Your Kids $1 Million Each! and $1 Million for Life.

About the author xi

Part I: the household debt explosion 1

Part II: first things first 11

1 Work out how far in the red you are 13

2 Compare debts with income 14

3 Work out your total loan repayment bill 16

4 Get the facts on all your loans 17

5 Check your interest rates 19

6 Add up all those extra fees and charges 20

7 Sort your debts 21

8 Prioritise your debts 24

9 Check your credit rating 26

10 Make a calendar and set targets 27

101 Ways to Get Out of Debt and On the Road to Wealth

Part III: mortgages 29

11 Do the numbers 31

12 Increase your mortgage repayments 34

13 Make one-off extra payments 37

14 Use pay rises to increase your loan repayments 41

15 Shorten the life of the loan 43

16 Use your income patterns to pay off sooner 45

17 Pay fortnightly instead of monthly 47

18 Shop around for a lower rate 48

19 Keep repayments flat when rates fall 51

20 Don’t keep switching loans 53

21 When refinancing, stick with your existing lender if you can 55

22 Always choose principal-and-interest loans over interest-only loans 56

23 Stick with floating mortgages 58

24 Avoid redraw mortgages 60

25 Be careful of offset accounts 62

26 Don’t use line-of-credit mortgages 64

27 Beware the honeymoon rate nightmare 66

28 Don’t capitalise loans 68

29 Upgrade your subprime loan 71

30 Consolidate debt at your peril! 72

31 Don’t pay for features you don’t need 75

32 Take into account all fees 77

33 All fees are negotiable 79

34 Don’t count on your partner’s income to borrow more 80

35 Mortgage brokers — spot the double take 82

36 Check that you are getting the correct rate changes 84

37 Let a tenant pay the mortgage 85

38 Consider long-term house-sitting 86

39 Plan a mortgage-burning party in advance 88

40 Pay off the mortgage before investing 89

41 Don’t bank on your superannuation fund to pay off the mortgage 93

42 Let grown-up kids pay part of your mortgage 94

43 Consider mortgage contributions instead of presents 95

44 Downsize — smaller house, smaller mortgage 96

45 Trade up houses, but trade down debt 98

46 Try the payout two-step 101

47 Avoid complex mortgage-reduction schemes 102

48 If you have to sell, stay in control 103

Part IV: credit cards 105

49 Find out how much you spend on credit cards 107

50 Choose the right card for your needs 108

51 Avoid credit card surfing 108

52 Never use cash advances 109

53 Cut up your store cards 110

54 Never pay just the minimum amount 111

55 Keep payments flat 113

56 Use direct debits 114

57 Check every item on statements 115

58 Once you’ve paid it off, cut it up 116

59 Consider changing to charge cards 117

60 If you have a charge card, don’t take up the credit option 118

61 Reduce your credit limits 119

62 Do leave home without it! 120

Part V: car loans, personal loans, boat loans and store loans 123

63 Renegotiate, don’t refinance 125

64 Always pay a cash deposit 126

65 Never buy new 128

66 Don’t self-insure 130

67 Don’t use store loans 131

68 If you fall into arrears, tell your lender as soon as possible 132

69 Get the credit bureau to limit more lending 134

70 Celebrate each win 135

Part VI: investment loans 137

71 Use principal-and-interest loans for investment properties 139

72 Avoid fixed-rate loans for rental properties 140

73 Avoid lines of credit for investment properties 141

74 Use your tax refund 142

75 Don’t use deposit bonds 143

76 Don’t borrow for the holiday house 145

77 Borrow in the same currency as your income 146

78 Beware the margin on share loans 149

79 Use dividends to pay off the principal on share loans 151

Part VII: small business debts 153

80 Get your personal finances sorted before starting a business 155

81 Keep business finances separate 156

82 Use your business plan 156

83 Don’t make capital purchases using the overdraft 157

84 Don’t extend your lease term too long 158

85 Avoid high lease residuals 160

86 When buying a business, do your research 161

87 Don’t borrow to buy a franchise 163

88 Be careful of line-of-credit mortgages for business 164

89 Use supplier terms and customer terms sensibly 165

90 Sell your debtors 167

91 Maximise depreciation 168

92 Never pay full price for business equipment 170

93 Business succession to reduce debt 171

Part VIII: avoiding and minimising debt 173

94 Maintain an emergency cash fund 175

95 Use separate accounts for savings goals 176

96 No deposit, no mortgage 177

97 Renters, get a 10 to 15 per cent discount on your first home 179

98 Don’t borrow to put money into superannuation 181

99 Avoid tax-based schemes 182

100 Be careful if guaranteeing other people’s debts 183

101 Beware the lender who says you can afford a loan 185

Part IX: the final pay-off 189

Part X: useful resources 191

Index 195