Big
problem, debt. It sucks money out of our cash flow monthly, weekly.
Golly, how much less pressure there would be without debt!
So pay it off. The faster the better. Debt is a form of
slavery, and the goal is to be financially free. Can’t do that without
getting rid of debt.
How to do that?
Immediate debt reduction. Take a percentage of those cash and stock/mutual fund holdings - say 10% to 20% - and pay down or pay off your debt now.
Event debt reduction. If you get a bonus from your job, use it to pay off debt. Immediately if not sooner.
Sell your house, and use the proceeds to eliminate as much
debt as possible. Do NOT go out and buy another house while still in
debt.
You inherit some money - use it ALL to pay off debt.
Get the idea?
“Selling” debt reduction. All that stuff
you’re going to sell? Take the proceeds and pay down a credit card. Or
a car loan. Or a vacation loan. Just pay it all towards debt.
And we’ll repeat for effect - if you sell your house and you have some profit, use it to pay down debt.
Planned debt destruction. This is where the
rubber really hits the road. Best way to get out of debt is with a
plan. So how do you develop your plan, and then implement it?
In the book, “The Handbook for Prosperity”, the debt payoff
methodology discussed is based on speed. The concept is that the faster
you pay off your debt, the sooner you will wipe out the interest you
are paying and the sooner you will be free.
So here is a summary of that approach.
1. List every one of your debts. Car loan(s), mortgage, credit cards, personal loans, student loans. List them all.
2. Now take each of those debts, and divide them by the
monthly payments you are making. (Put these on a spreadsheet if you
have a computer program for it. Otherwise, it is just as effective
write it out in spreadsheet format on paper yourself.)
3. Each debt will have a number - the number of months it
would take to pay off that debt if you could fix the amount owed today
with no future interest.
4. Then re-arrange the debt list from the smallest number of
payments to the largest. This is your priority list of planned debt
elimination.
5. Take the top debt on your list, and whenever you find
savings by cutting spending, income from selling stuff, event income,
etc - apply it to this debt FIRST until it is paid off. Continue to
make the minimum payments on the other debts.
6. As soon as the first debt is paid off, add what you were
paying to that debt to the amount you are paying on the number 2 debt,
and apply that amount monthly to debt 2. Then tackle debt #2 the same
way, until you work your way down the entire list.
7. That’s the process. Keep at it until the debt is gone.
Again, the idea here is speed to debt free. It’s a process
that works very well, and accelerates rapidly. Do it for a year and see
what happens.
CAVEAT: while doing this, you must not incur new debt. Period!
5. Hunker down - Develop Another Source of Income
This section pre-supposes that you are already taking steps to
make yourself indispensable at your main job. That has to come first,
or you will jeopardize your main income by tackling the development of
a second income.
So do all that you can to increase your value to your current employer FIRST.
We all have some talent or skill or capability that we could
leverage into income outside of our “regular job”. Either through
starting our own business, or by taking on a second job (part-time).
What’s important is to develop some back-up income over which you have some control.
A part time job may not offer that - but part time jobs are in
many ways more secure than full-time positions in this economic mess.
At least with a part-time back-up job, should your primary job go away
you will have some cash flow with which to work.
The internet makes developing a business of your own a very
doable thing. The web is jammed with promos and come-ons to do just
that. Much like multilevel marketing, many of these rely on you selling
the program to others to sell to others. There is a lot of burnout and
many disappointed people who sign up for many of these scams.
If you spend any time searching the web for “business
opportunities”, the scams quickly become easily identifiable. And you
can always check out a possible business by searching it on the web for
“scams”. So don’t fall for the kind of business that relies on people
selling other people the same program or information over and over
again.
Having said that, here’s the key thing, the ONE thing: get
started. Find some resources that make sense. That help you develop a
skill, or that help you find a product - something tangible and
concrete - that you can promote and sell on the web.
A good place to start is with the book “Making a Living Without a Job”, by Barbara Winters. http://www.amazon.com/Making-Living-Without-Job-Creating/dp/0553371657
This is one book you might want to purchase as it is an
excellent long-term reference. But the library should have copies for
borrowing.
Another source that might prove helpful is the newsletter “early to rise”, or ETR. www.earlytorise.com
It’s a free daily newsletter that both promotes programs and provides daily ideas, insights and encouragement.
Last reference: check out AWAI. “If you can write a simple
letter”, as they say, they can teach you to create a writing business
with good income through one of their programs. Worth considering, and
their track record is pretty good. http://www.awaionline.com/
The important thing to remember in aiming to develop a second
source of income over which you have control is that it takes WORK and
it takes TIME. There is no easy way to do this. Methodical ways,
step-by-step ways - yes. But no easy ways or short-cuts. That’s a good
sign of a come-on.
6. Hunker down - Help Others
There is a principle of life that most of us missed learning as we grow up. And most of us miss it after we grow up, too.
That principle is generosity and helping others. Whether with
your time (very valuable), listening (quite valuable), your
encouragement (pretty valuable), your counsel (sometimes valuable), or
your money (not so much), being a generous, helpful person to others
works magic.
Not just on the person you are helping. It works magic on you, too.
Here’s the thing: you can’t accomplish much in this world
without the help of others. And the way to gain the cooperation of
others is through generosity. A willingness to go the extra mile -
giving others what they want and need in abundance. In all walks of
life.
Developing a generous attitude and heart takes time and it
takes work. But the personal growth that comes from doing so, and the
friends and supporters you’ll make along the way, will prove to be
priceless.
I once spent over 2 years assisting a handicapped person
attend a weekly early morning bible study. During that time, I don’t
believe he once thanked me - and his handicap caused extra wear and
tear on my car!
At one point, I had about had it. What was going on here? I
was doing all these “good things” and I was getting nothing back - not
even thanked!!
A good friend of mine chastised me, and rather bluntly.
“Look,” he said. “You should be grateful that God place you in a
position to help this fellow. You should be thanking God that you are
able to help this man, and you should be thanking this man for the
opportunity to help him.”
Well, I changed my attitude. Reminded myself of how fortunate
I was with my life, and how fortunate it was for me to be able to
provide reliable help to my friend.
About 6 months later, this gentleman, who worked for hourly
pay in a menial job,recommended me to a friend of his for a job opening
that I sorely needed. And it paid 6 figures.
Now, was I generous and helpful because I expected that to happen? Never in a million years, my friend.
Look, the world is full of hurting folks, most of whom will
never share their hurts with us. The least we can do is be generous and
helpful at all times - you never know the positive affect your kind
word of encouragement will have, the listening ear that lifts a burden
for someone, or lending a hand improves someone’s self-worth.
And spreading those kinds of seeds and deeds is what we as a
nation will need in abundance as we go through this unfolding financial calamity.
