No matter what your business is, you want to reach out to all possible clients, or at least open your doors to as many kinds of people as possible. The more people you can cater to, the more income you can earn.

This is why it’s very important to make sure that you follow the rules of the Disability Discrimination Act 1995, or the DDA. At least a quarter of your possible market knows disabled people, so it’s important that you don’t isolate them.

Inclusion helps you with this by guiding you through the various laws for disabled people, as well as other occupational therapy and vocational rehabilitation-related advice. Inclusion has been in the field for about sixteen years, so you can be sure that their occupational therapists know what they are doing.

Inclusion Occupational Therapy services can be found at www.inclusion.me.uk. Check their website out and find out how they can help you.

Whether it’s a mortgage, car loan, student loan, credit card, or medical bills, you probably have some amount of debt in your life. It is only natural that you want to pay it off as soon as possible, but what do you payoff first and how do you plan for investing?

Since the amount you can pay towards these items is predicated by your income level, a decision normally has to be made between investing and paying off your debt.

What should you do? The answer depends on two variables:

1. The rate of after-tax interest you are paying on your debt
2. The after-tax rate of return you expect to earn on your investments

Before you answer the first question, you must understand that there are two different kinds of debt. On one end of the spectrum is high-interest credit card debt that originates from things such as credit cards and department store charge accounts. This type is the deadliest and generally should be avoided unless absolutely necessary.

The second type of debt is the lower interest variety; your mortgage, student loans, etc. Often, the interest on these types is partially or wholly tax-deductible, making it even more attractive.

With that in mind, the answer to the debt reduction vs. investing problem can be solved with this one statement: If you can earn a higher after-tax return on your investments than the after-tax interest rate expense on your debt, you should invest. Otherwise, you should pay off your balance.

Example of Debt Reduction vs. Investing - Calculation

Scenario 1
Assume you have a thirty year, $150,000 mortgage with a six percent rate. Also assume you are in the 25% tax bracket. Due to the itemized deduction of mortgage interest, your after tax annual percentage rate is really 4.02% (not the 6.00% you are paying).

Hence, if you expect to earn an after-tax return higher than 4.02% on your investments (odds are substantial you will if you have a long-term horizon), then you should invest.

Scenario 2
You have a $10,000 balance on a credit card with a 22% annual percentage rate. Credit card interest expense is not tax deductible, meaning you should only invest if you think you can earn a 22% after tax return on your investments.

Given that the historical long-term return on equities has been somewhere around 11-12%, this seems highly unlikely. In this case, it would be foolish to invest.

The Bottom Line

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