Author’s note: This article on selling investment property is by far our most popular – probably because it’s comprehensive and comes complete with formulae – but at over 5,000 words it’s longer than an average book chapter. So, here’s the summary of what you’ll find in this article so you can decide if it’s what you’re after:
- Five sensible reasons to sell (to reduce interest on your home; poor performance; better asset available; it was once your home; losing sleep over it).
- Five reasons that it may be better to hold (it’s a recent purchase; solid performance; high potential for growth; it’s key in your strategy; no mortgage on your home).
- Full worked calculations based on the scenario of having a home mortgage and an investment property (three worked options: keep both; sell investment and swing profits to home mortgage; sell investment and use profits to buy another property).
At the end of the article, you’ll find instructions for obtaining an Excel spreadsheet that does all the calculations covered in the article and lets you run scenarios for your personal situation.
Recently, I was asked on two occasions in a single day for my thoughts on whether or not my friends should sell their respective investment properties. When I mentioned being asked the same question twice that day at dinner in the evening, a third friend said ‘Yeah, I’ve been wanting to ask you the same question about my property.’ I’ve been pondering why so many people were thinking about selling their investment properties around then.
It was Christmastime, so I can only suppose it’s because it’s that time of year when we take stock of our lives. We consider what’s been good, what we’d like to change, and what the next year might have in store for us. Some people make travel plans, others pin their resolutions to the fridge. It’s also a fitting time to do a quick check of your financial position and ask yourself a few pointed questions. Whether or not your current investment mix is ideal for you, right now, is a good question to ask. Because of the nature of property – being a large financial commitment requiring cash flow to service it in many cases – it makes sense to start there when you’re assessing potential changes to your portfolio.
It’s something I have been considering myself of late. In fact, my husband and I did sell one of our investment properties recently.
Having attempted to answer this question for three different scenarios, I’ve outlined the main themes behind my reasoning below. If you are taking stock of your financial landscape and considering selling an investment property, I hope you’ll find them useful. I’ve included an example with all my calculations that you are welcome to replicate for yourself. If you’d like a copy of the spreadsheets I use to do the calculations, please PM me on Facebook or send a query via the contact form on our website.
Good Reasons to Sell
There are several excellent reasons selling might be a good move. Here are five to consider:
1. To reduce interest paid on your home
Your home (or principal place of residence, PPoR) is considered an asset by the bank. It’s often the biggest asset a person owns. But it’s not really an investment. You don’t earn an income from it, you don’t get any tax benefits from it, and you can only get the benefit of any capital increases from selling it. That is, assuming you’re not securing loans for other investments against your home. You’re not crazy so that’s a pretty safe assumption.
If you’re like most Australians, you took a mortgage to buy your home. This means you’re paying interest. For a typical loan over 30 years, you’ll pay back double the amount you borrowed. If you borrowed $300K and pay back the minimum repayments, you’ll give the bank more than $600K before you’re debt free. You’ll be paying with after-tax dollars too, so if your overall tax rate is 30% you have to earn $857K to pay back the original $300K. Sure you’ll earn it over 30 years, but it’s still a hefty sum. Anything you can do to reduce it will be worthwhile.
I’ve heard people say they don’t pay down their PPoR mortgage because they can ‘do better’ with the money, meaning they can beat the cost of paying the interest. That’s a big claim. A reasonable interest rate to expect over the life of a loan would be in the order of 7%. In the late ‘80s, people were paying 18% interest – more than treble current rates. On top of the interest, you’re paying with after-tax dollars, so you’re probably closer to 10% including that. If you can guarantee a 10% return on your money every year for 30 years, you’re eclipsing 99.99% of investors – including the professionals. Bold claim, but if it’s true – please tell me your strategy!
2. The property is underperforming
Real estate can tie up significant capital and equity. Most people will lay down a 20% deposit to avoid insurance, so a $500K property will tie up $100K on settlement just for the deposit – not to mention all the other fees you have to pay up front when you buy a property and then maintain its ongoing costs. For that kind of cash, you want to be absolutely sure you’re getting the kinds of returns you expect. So how do you assess whether your property is performing to your expectations?
There are two common performance measures with any investment:
- Yield – the cash flow you are getting from it. For an investment property, that’s rent.
- Capital growth – how much the investment is increasing in value. For this instance, that’s related to how much you can sell your investment property for.
How do you calculate each, and what does ‘good’ look like?
Yield is your annual rent divided by the purchase price. The purchase price is obviously fixed, but you can calculate gross yield by using the rent only, or net yield by subtracting costs. For example:
- Property X was purchased for $380,000
- It rents for $400 a week * 52 weeks per year = $20,800
- Total rental costs are $5,000 (e.g. rates, agent’s fees, insurance etc)
Gross yield is $20,800 / $380,000, or 5.5%.
Net yield is ($20,800 – $5,000) / $380,000, or 4.2%.
As a rule of thumb, I expect around $100 a week rent for every $100K of property value. For example, for a $400K investment property I would want $400 a week rent before expenses. I have found this holds true in Brisbane since I’ve been investing. In the mid 2000’s in Perth, I saw around $70 a week rent for every $100K of property value, but that has now caught up to Brisbane’s level. I can’t vouch for the other capital cities or regional areas.
As for capital growth, the simplest indicator of progress is what the likely sale price would be if you sold your investment property today minus the price you paid when you bought it. You can get estimates of current value from RP Data or Price Finder, or your bank may be able to provide a valuation. You can always pay for a valuation if you really want a more accurate number. Real estate agents will provide recommended listing prices for free too but be warned: they’re relentless. Once you open the lines of communication, expect them to approach you about selling regularly. They may also provide an inflated estimate to get you excited enough to list with them.
With any price estimates, remember they’re only guesses. A property is worth what someone is willing to pay for it. Until that person signs an offer, you can’t bank the value. It’s a guide only.
To calculate capital growth, divide the price increase over the purchase price. For example:
- Property Y was bought for $380,000 in 2006
- It was sold for $520,000 in 2013
Capital growth is ($520,000 – $380,000) / $380,000. This is 37%, or 5.3% per year.
This gross profit measure is indicative only. Because of the costs of buying and selling and thanks to inflation, you will not make this much money when you sell.
And what does good growth look like? Historically, house prices increase by 7% a year in Australia. This is an average, so some years are higher and some much lower, and we have experienced negative growth in some years (i.e. loss). Because an investment property is a long-term game, it’s not helpful to look at growth within 5 years of purchase – unless you really want or need to sell.
In the case of investment property, there’s a third measure of sorts and that’s gearing – as in positive, negative or neutrally geared. What does this mean? In order of desirability:
Positively geared is when your costs are less than the income on the property. In other words, the investment property makes money and you don’t have to shell out anything to maintain it (excepting those hopefully rare periods of major maintenance or vacancy).
Neutrally geared is when your costs are roughly equivalent to your income on the property. You may not have to fork out any dosh, but you’re not making an income from it either.
Negatively geared is when your costs are greater than your income on the property. You have to contribute cash over and above the rent to make the books balance.
Why on earth would anyone want a negatively geared property? Because you can reduce your costs by declaring the loss on the property in your income tax – this effectively means the government subsidizes part of your property cost. It’s a common strategy if you pay a lot of tax, and it can be useful if there is opportunity to secure a property with high potential capital growth.
However, the bottom line on negative gearing is: it’s costing you money. When the proverbial hits the fan, it’s a pressure you may not want or need.
3. You have a better option
Let’s say you have the inside line on a fabulous investment opportunity – real estate or otherwise. You have as-close-as-you-can-get to a guarantee that your returns will be better than your current investment property, taking into account change-over costs. It may then be worth cashing in your chips and changing your strategy.
One example where this might have been appealing is the recent government initiative: the National Rental Affordability Scheme (NRAS). Because of the incentive of nearly $100K cash back from the government for buying and renting out an NRAS qualified investment property, this might represent an improvement on your current property. That is, if the NRAS property is not overpriced…
4. It used to be your PPoR
There is a tax benefit to selling an investment property if:
- You lived it in immediately after you bought it, and
- You moved out of it within the last six years.
The benefit is you will not pay any capital gains tax (CGT) on the sale if you make a profit. Timing is everything…
5. You’re losing sleep over it
Is your investment property keeping you awake at night? Are you worried about the impending bathroom replacement you know is coming because you found a leak on the outer wall last inspection? Are you struggling to get reasonable and consistent tenants? Are you fretting about how you’ll make your repayments with a potential redundancy on the horizon?
If you’re losing sleep, lose the property. In my opinion, it’s not worth losing quality of life over. Cut your losses and find something that doesn’t cause you distress to invest in instead.
Good reasons to hold
Sometimes selling isn’t such a great idea. Here are five reasons you might prefer to hold onto your investment property:
1. You bought recently, i.e. less than 5 years ago
Because of the costs to buy (stamp duty, conveyancing) and to sell (agent’s fee, conveyancing again) getting in and out of property can quickly become an expensive exercise. Our recent sale went from a $28K profit to a $15K loss due to these expenses alone. This is not a short-term gain. Expect to hold for a minimum of five years to reduce the impact of these costs. If you decide to sell your investment property inside that period, understand the costs and your true position before you take the leap.
2. It’s a solid performer
Getting good yields (>5%)? Seeing strong capital growth in the area? Positively geared? No major maintenance on the horizon? No trouble getting solid tenants?
The impetus to sell in this case is probably small. If it’s not costing you any money to own (i.e. positively geared) and all indications are that it’s delivering a good return on your money, perhaps holding is a reasonable plan right now. That said, selling when everything’s looking good is obviously much easier than waiting till something goes wrong…
3. High potential for growth
When I moved to Perth in 2005, people were arriving from the eastern states to live and work at the rate of 1,000 people a week. That rate kept up for around 7 years. What do you think the impact of 50K+ new residents arriving each year is on real estate in a city with a population of 1.9 million?
You guessed it – first it drove up rent, then it drove up house prices. If you bought in 2003, you were sitting on a gold mine within 4 years as house prices nearly doubled across Perth. Rents were increasing at staggering rates in high demand areas – 20% per annum in some cases. Seeing this influx of new residents due to the mining boom, would you sell or hold? I’m guessing you, like most who had the choice, would hold.
How about now? To carry on with the Perth theme: major capital spending in mining has slowed dramatically. Iron ore prices have taken a hiding. People are finally leaving WA at a greater rate than those arriving. Rents are dropping – city apartments that rented for $1,250 a week in the boom are now struggling to find tenants willing to pay $700 a week. Sale prices have held fairly steady, but there is no doubt demand in the sales market has dropped off since mid 2014. When demand falls, prices must follow to some degree. In this kind of market, the temptation is to sell. Of course, anyone with time travel abilities would go back and list their property for sale in early 2013 when the market was still buoyant and high demand would help achieve a decent sale price. Listing your property for sale now may mean you make less profit than you may have expected a couple of years ago.
The trick is to balance your expectations of growth with sale timing. Do you hang on till you’ve eked out every last drop of growth, accepting the risk that you may overshoot the peak to see your profits decline? Or do you get out a little earlier, risking a smaller capital gain but finding the market more favourable? Not a good decision to make emotionally, so plan ahead by keeping an eye on forecasts and population trends.
4. It’s a key part of your strategy
Does your financial strategy hinge on passive income from an investment property? Do you rely on the deductions you achieve through real estate to keep your tax manageable? Do you need the equity you can achieve through property to take the next step in your plan – developing, subdivision etc? These are good reasons to hang onto your investment.
My key reason for investing in property is the income I’ll get from the rent when the mortgages are paid off (mainly paid off by the tenants in particular). It’s something akin to an annuity in my mind, but linked to inflation as rent will increase as the economy grows. Here’s how the math works for me with one of my properties:
I bought a 2 bed, 1 bath apartment in Taringa, QLD in November 2001. Initial outlay was $30K, purchase costs were in the order of $3K and I spent $6K on renovations. The apartment became positively geared within 5 years, and prior to that cost me around $5K a year on average, including a kitchen replacement and new air conditioner. It’s now generating around $7K a year profit and the mortgage is steadily reducing. Current rent is $315 a week – not bad for a property I got for under $105K (current value is around $300K).
Disregarding inflation, my costs amount to $64K, give or take. I’m earning $7K per annum (p.a.) currently, which is around 11% p.a. return on my cash. When the mortgage is paid off (thanks to my tenants since this investment property is positively geared) I can expect to earn closer to $13K p.a., which is a 20% p.a. return on my cash. And at the end of it, I still have the capital asset in which I currently have around $250K equity. I’d need a pretty impressive annuity deal to guarantee similar returns given current annuity rates are in the order of 6% (due to low interest rates).
If I sold now and took that $250K equity to buy an annuity at 6%, I’d earn $15K a year. So today, it’s marginal which is the better investment. I could probably do just as well with the equity if I invested it elsewhere. However, if it weren’t for that property I might not even have that $250K. I would have had to execute some pretty impressive investment strategies elsewhere to turn $64K into $250K – a nearly four-fold increase – over the last 14 years given the financial crisis. Also, if I lock myself into a 6% annuity, I could be missing out on significant income increases if interest rates rise. Rent will generally keep up with the market so I’m getting the potential upside. And finally, annuity deals can be structured to consume your capital – so you get higher payments – or keep some or all of the capital for a pay-out at the end. At least with property you always have an asset.
Bottom line, rental income is key to my strategy, so I’m holding. How about you?
5. You don’t have a home mortgage
Remember my first reason I mentioned – selling an investment property to pay off a mortgage? If you don’t have a home mortgage, you’d be looking to invest that cash somewhere else. Real estate, shares, indices, foreign exchange, commodities… whatever. It’s got to go somewhere, and preferably somewhere that’s going to make you a tidy profit.
Locking in a saving of 10% p.a. by putting it against your home mortgage is a no-brainer. But you can’t guarantee 10% returns on your investment cash. Sure, many people can and will do better than 10%, but there’s no guarantee. So do the math – are you confident you could do better elsewhere? If not, perhaps it’s a good idea to hold.
Let’s take a hypothetical situation as a way of working through the above reasoning and calculations. If you’d like a copy of the Excel spreadsheet I use to do these calculations, please sign up here and you’ll get a copy immediately. Onto the example:
Let’s say a portfolio consists of two properties:
Property A is the principal place of residence (i.e. home) purchased last year:
- Original deposit = $300K
- Mortgage = $700K
- Current estimated value = $1.1m
- Equity = $1.1m – $700K = $400K
- Interest on mortgage = 4.9%
- Loan term = 30 years
- Repayments = a bit less than $3,800 per month
Property B is the investment property purchased a decade ago:
- Original deposit = $100K
- Initial mortgage = $150K
- Current mortgage balance = $100K
- Positively geared from sixth year
- Total ongoing costs till positively geared = $40K
- Current estimated value = $700K
- Equity = $700K – $100K = $600K
- Interest on mortgage = 4.9%
- Loan term = 30 years
- Repayments = $530 per month
- Rent = $590 per week
- Ongoing costs = 20% ($118 per week)
First, let’s look at Property A:
Over 30 years, the total repayments made will be just ten grand shy of $1.4m. That’s nearly twice the original value of the mortgage. So it didn’t cost $1m as originally paid, it cost $1.7m – a 70% increase. This assumes:
- You paid off the mortgage at the agreed minimum monthly rate
- It took the full 30 years, with no offset of extra payments
- You maintained 4.9% interest rate (laughable really – 7% would be a better average to use)
- Inflation is not taken into account
If you’re wondering how I calculated that total: I like to use the CBA home loan calculator. I use it because that’s the institution my loans are with, there are many other calculators you can use.
In addition, you paid $1.7m of after-tax money, so you probably had to earn around $2.4m to do that (if your tax rate is around 30%). Not such a bargain now, is it. Ah, the price of living in a home you love with no rental inspections…
Now let’s consider Property B:
If you owned this property, chances are you’d be pretty happy right now because it’ providing you with some income. But let’s do the numbers anyway. First up, yield:
- Before costs, you’re earning $590 per week * 52 weeks per year = $30,680
- After costs, you’re earning ($590 – $118 = $472 per week) * 52 weeks per year = $24,544.
- The purchase price was $100K deposit + $150K mortgage = $250K
- So your yield is:
- $30,680 / $250,000 = 12.3% before costs, and
- $24,544 / $250,000 = 9.8% after costs.
These are very respectable yields. However, I’d guess that the rent is a little low at $590 per week if the property is worth $700K – that’s $84 per $100K, where I would hope for closer to $100 per $100K. Perhaps there’s a good reason: maybe the property is run down, or common, or there’s lots of competition. Either way, I’d be asking for a rental appraisal.
Total input in the first five years was $100K deposit + $40K to maintain = $140K (I’m ignoring buying costs for this example). After that, it’s making you a profit of around $18K a year until the mortgage is paid off, which is 13% return on your capital (ignoring inflation effects). After 30 years total, the mortgage is fully paid and you get the full benefit of the yield. It all looks solid, pending no surprises.
So what’s the debt to equity ratio (D/E) of the portfolio?
Total debt (D) = $700K (Property A) + $100K (Property B) = $800K
Total equity (E) = $400K (Property A) + $600K (Property B) = $1m
D / E = $800K / $1m = 80%
This is the limit of what most banks will allow and indicates that risk is manageable provided cash flow is sufficient to service the loans. Assuming that’s the case, you’re in good shape.
So, what are your choices? There are roughly 3 options:
- Keep both investment properties
- Sell Property B and put all proceeds against Property A (whether by paying down the mortgage or putting it in offset)
- Sell Property B and put some profit against Property A, while using the remainder to secure another, cheaper Property C.
1. Keep Property B
You’re earning a passive income from the investment property, so you could conceivably direct that cash towards repayments on Property A. Assuming 30% tax on the $18K you’re making a year, you’ll have $12,700 to do that with – that’s over three months of repayments each year on Property A. In addition, you’ll still have a solid investment whose income will increase if interest rates increase (as happens in times of growth) – so you’ve got a bit of hedge against interest rates impacting your Property A repayments.
The limitation is that you’re maxed out on your D/E. You won’t be able to borrow significant sums of cash again until you build up more equity, and that’s assuming your cash flow can keep up.
In the end, you’re still paying $2.4m for a $1m home, but you’ve only got to front up around 70% of that cash – the rest comes from rental income on Property B.
2. Sell Property B, put all profit on Property A
Let’s say you sell for $700K and it costs you $30K to sell. After discharging the $100K mortgage, you walk away with $570K. If this property wasn’t your principal place of residence when you bought it, you’ll be capital gains tax when you do your income tax return. Assuming the original cost was $300K ($250K purchase + $50K costs) and your marginal tax rate is 30%, your tax is calculated as follows:
- Profit from sale = $700K – $30K sale costs – $300K purchase = $370K
- 50% will be taxed = $370K / 2 = $185K
- Taxed at 30% = 0.3 * $185K = $55.5K
So your cash balance after settlement and tax is $570K – $55.5K = $514.5K.
If you wanted to put 100% against Property A, you could either:
Pay down the mortgage
In this case:
- Your mortgage becomes $185.5K, with 29 years remaining on the term.
- The new monthly repayment is just shy of $1,000.
- You now have a $1.1m asset with $185.5K debt, so your D/E becomes $185.5K / ($1.1m – $185.5K) = 20.3%.
- When you’ve paid off that loan, you will have paid the bank $365K on that mortgage. Added to the $3,800 a month you paid for 12 months, you’ve spent $3,800 per month * 12 months + $365K in remaining repayments + $514.5K profit from Property B + $300K initial deposit = $1.26m before tax. That’s a damn sight better than $1.7m.
You no longer have a passive income from the rental property, but your outgoings are significantly reduced. You can probably borrow for another property quite easily, either by saving up a new deposit or securing against Property A.
Put the profits in an offset account
When you use an offset account, the positive balance is held against your mortgage and you are charged interest on only the difference between the mortgage and offset balances. In this case, you’d still have a mortgage of $700K which requires $3,800 a month repayments, but you’re only being changed interest on $700K – $514.5K = $185.5K. The end result is you pay off the loan much quicker – in fact you stop being charged any interest in 4 years and 8 months after the Property B sale, when your offset account balance overtakes your loan balance. Your loan is completely paid off in 16 years and 3 months if you continue to pay at $3,800 a month.
Compared with paying down your loan:
- Your D/E becomes:
- D = $700K
- E = $1.1m – $700K + $514.5K = $914.5K
- D/E = $700K / $914.5K = 77%
- You will pay $3,800 per month * 207 months (17.25 years) + $300K from the initial deposit = $1.07m after tax.
- You’ll also still have the $514.5K in the offset account, which you can then use as you see fit.
As you can see, either option works. If you pay down the mortgage, you reduce your debt and slash your repayments by more than 70%. If you use an offset, you keep your repayments high, but you significantly reduce the time taken to pay off the loan. It’s a question of preference – which are you more comfortable with?
I prefer the high repayments with cash in offset. That way, I can access a large amount of cash whenever I want if the right opportunity comes along, or a ‘rainy day’ happens. I figure I can always pay down the loan if I can no longer service the higher repayments, but no need to do that until I really want to. It’s much harder to access the equity once you’ve paid it off the mortgage, as you need to apply to the bank. In an offset, it’s liquid and you can take it any time. It does however reduce your capacity to borrow, as the bank knows you can whisk your money away so doesn’t consider it as a security in their calculations.
3. Sell Property B, put half the profit on Property A and use the remaining half for a new, cheaper property
This hybrid option is an attempt to get some of benefit of a reduced mortgage on your home without forgoing all the advantages of having a rental property. So what would this look like?
Based on the profits of $514.5K, let’s say you plan to put $264.5K against Property A and $250K you will use for a new purchase, Property C. Here are your new calcs:
- If you pay down the mortgage on Property A, you will find:
- The mortgage balance becomes $700K – $264.5K = $435.5K
- Based on a 29 year term remaining at 4.9%, your monthly repayments are now around $2,400 per month ($848K total)
- Your D/E, incorporating the total profit ($514.5K) is calculated as:
- D = $435.5K
- E = $1.1m – $435.5K + $250K (remaining profit) = $914.5
- D/E = $435.5K / $914.5K = 48%
- You’ll pay $848K + $3,800 * 12 months + $300K initial deposit + $264.5K from Property B sale = $1.5m total for Property A
- If you use an offset account, instead you’ll find:
- Repayments are still $3,800 per month
- Your D/E, incorporating total profit ($514.5K) is calculated as:
- D = $700K
- E = $1.1m – $700K + $514.5K (remaining profit) = $914.5
- D/E = $700K / $914.5K = 77%
- You stop being charged interest after 13 years and 3 months after starting the offset account
- You finish paying off the loan 19 years and 3 months after starting the offset
- You’ll pay $3,800 * 20 years and 3 months + $300K initial deposit = $1.2m total for Property A
- You’ll still have the $264.5K at the end of that.
Phew! Did you get all that? Now what happens when you throw in Mystery Property C…
How much would the banks lend you to buy another investment property? Let’s assume you pay exactly what Property C is worth (i.e. you have no equity beyond your deposit at purchase). This means your equity remains the same in both cases – $914.5K. It’s pretty simple, but if you hate algebra just skip the next few dot points.
Assuming we can have a maximum D/E of 80%, the calculation for how much additional debt you can have is 80% * current equity ($914.5k) minus current debt:
- In the case where the loan was paid down to $435.5K, you can borrow another $296K before hitting 80%
- In the case where the loan stays at $700K, you can borrow just $31K before hitting 80%
If you use the $250K leftover profits, you can afford a total purchase (including fees) of $546K for the paid down loan or $281K for the offset option. This also assumes you have the cash flow to service the new loan and that the bank agrees to finance the particular property you choose. Pretty big difference huh.
Anyway, there’s three worked options for you to consider. As I mentioned, just fill out the contact form with a request for my spreadsheet if you so desire.
There’s a hefty amount of info in this post. If you don’t know where to start, consider taking these actions:
- Check the performance of your investment property (or properties if you have more than one)
- Get an updated rental assessment – are you charging enough rent?
- Get an updated sales estimate – what could you expect to sell the property for?
- Calculate your yield for each property – are you happy with performance?
- Calculate your overall D/E – are you within 80%?
- Check against your strategy – is the property delivering what you wanted?
- If you think you might want to sell, run scenarios based on those options above. Which makes most sense to you (financially and in the ‘not losing sleep’ sense)? Again, let me know if you’d like a spreadsheet to assist.
- Take action if it’s warranted! Don’t fall into analysis paralysis – give yourself a couple of hours to run the numbers, see what they’re saying and then take action accordingly. Remember these words from Theodore Roosevelt:
‘In any moment of decision,
the best thing you can do is the right thing,
the next best thing is the wrong thing,
and the worst thing you can do is nothing.’
If you’re after a copy of that spreadsheet, click here to get it.
We teach adults how to get on top of their finances so they can stop work sooner and stop losing sleep over money. Part of that is, of course, teaching them how to get into the situations you’ve just read about in the first place. If that sounds good to you, check out our course on Achieving Financial Independence.
You may also like to check out our Facebook page, where we share articles and video tips. Given you’re reading about bankruptcy, you may be interested in reading our tips on credit cards, avoiding the Struggle Street trap, and some wonderful free and cheap financial education resources you can access, including people to talk to for advice.
For those in debt and not quite at the stage of bankruptcy, we also have a free course called ‘Get out of debt fast’. You’ll find it on our homepage.