Most of us just grin and suck it up and spend whatever we need to during the holidays. My friend, who recently moved out of his family's home and into his own shared with me that he's broke and will have only a few pieces of furniture for a month or two.
If you've been keeping up with the story you'll know that roughly a year ago my friend moved his wife and three kids in with family to get out of debt as they were about to go under.
Well, one year later, here's the latest report.
Money saved, NOTHING.
Bonus spent on new housing
Looking forward to income tax return to purchase new furniture
Still has two car payments
Paid off wedding stuff
Paid off a few other bills
Still has the majority of bills to go.
One day woke up and decided that living with in-laws was not a good idea.
The original goal was to pay off every bill save a few bucks and move back on their own.
They are now on their own with nothing saved and the bulk of the bills still hanging around.
They didn't spend lavishly on Christmas, but still spent.
What was learned? I'll update you when I get the answer.
David
Tuesday, December 23, 2008
Saturday, November 22, 2008
Divorce A Wealth Distroyer?
Divorce a wealth destroyer?
I had a comment recently about divorce being the number one wealth destroyer. Well, I’d like to comment on the idea of divorce and politely disagree.
Though, right up front, let me say that divorce is a heck-of-a-lot more destructive on all parts of your life than finance.
But here’s why I think divorce is not the number one wealth destroyer. Firstly, if you are living debt free principles divorce does not ruin you financially. It might hurt but it is the least of your problems. (And remember you can always work yourself out of a finanical mess) If, however, you are living a Debt Loaded life-style and you get divorced it can set you back financially for years.
The basic problem is always debt. Most marriages end in divorce over money and money pressures. Money problems cause long term health issues. If you are awake at night worrying about money it isn’t because of divorce or the threat of divorce. At the risk of mentioning the bible (I always get tons of comments when I do) it says “neither a lender or debtor be.”
Don’t lend or borrow money is the point but if you’re going to do anything be a lender of the money (the bible).
80% of us borrow money.
The real truth of the matter is your life-style says more about your financial, personal, physical, and spiritual health than anything else.
When it comes to money it is more of a reflection of what you do in your life-style. Yeah, I realize that some divorces are caused by different factors but if you live a debt free life (CASH IS KING) you’ll survive most of life’s rough spots better than most.
David Dassow
I had a comment recently about divorce being the number one wealth destroyer. Well, I’d like to comment on the idea of divorce and politely disagree.
Though, right up front, let me say that divorce is a heck-of-a-lot more destructive on all parts of your life than finance.
But here’s why I think divorce is not the number one wealth destroyer. Firstly, if you are living debt free principles divorce does not ruin you financially. It might hurt but it is the least of your problems. (And remember you can always work yourself out of a finanical mess) If, however, you are living a Debt Loaded life-style and you get divorced it can set you back financially for years.
The basic problem is always debt. Most marriages end in divorce over money and money pressures. Money problems cause long term health issues. If you are awake at night worrying about money it isn’t because of divorce or the threat of divorce. At the risk of mentioning the bible (I always get tons of comments when I do) it says “neither a lender or debtor be.”
Don’t lend or borrow money is the point but if you’re going to do anything be a lender of the money (the bible).
80% of us borrow money.
The real truth of the matter is your life-style says more about your financial, personal, physical, and spiritual health than anything else.
When it comes to money it is more of a reflection of what you do in your life-style. Yeah, I realize that some divorces are caused by different factors but if you live a debt free life (CASH IS KING) you’ll survive most of life’s rough spots better than most.
David Dassow
Saturday, October 25, 2008
You Can't borrow your way out of a hole
Recently I had a conversation with a friend who moved in with family to pay down all his bills and start over. If you’ve kept up with this blog you’ll know this has been going on for a long time.
He actually moved into his in-laws in December of last year for 4 months (his original goal). He extended it to 6 months, followed by “any month now” he’d be moving out to “I don’t know when it will be”.
What went wrong?
First, he doesn’t particularly like to live with his in-laws. Second, his wife has a large spending problem and doesn’t mind living with her parents. Third, they have three kids who, like most kids, go with the flow.
So, what went wrong?
Well, it started out with the best of intentions. He began paying off bills one at a time and even had a time line for paying off everything even the two car loans. He changed it to paying off at least one car loan and the only bills left would be his truck payment.
A few months into the plan they took a family vacation to Disney land. That was followed up by several weekend get-a-ways (the whole family would stay in a resort to get away from it all)
From that point it became Spas for the wife, golf stuff for the husband.
Every once in a while I’d get updates from him on what’s happening. At first everything was on track and he couldn’t wait to get out of the in-laws house. After awhile it became I’d rather have this or that and I’m close to paying everything off.
By the 6th month he was talking about purchasing a home and how there were such good deals because of the housing market. When I asked if he had saved a down payment he said, “no.”
Have you saved anything? Have you paid off all the bills? Did you begin saving the monthly rent you used to pay out to get used to paying it out again?
All “NO” answers.
Now, it’s we are a few days shy of the eleventh month. All of the bills are not paid for. There is no money saved.
Unfortunately they have now gotten so use to not spending money on rent & utilities the will have a tough time coming up with that money once they move out. In addition, they have not paid off all of their bills (credit cards, car payments) and are now discussing purchasing a new car (on time).
The moral of the story?
If you do not go through some pain it is difficult to change bad habits. They have reverted to spending every dime they make and have nothing saved and plenty of bills to pay.
You’ve got to get mad about your situation. You’ve got to get mad and want to do something about it. You’ve got to get mad and make a commitment to a month, a year, what every it takes to become debt free.
Sometimes life forces you to make those changes. But, mark my words, if you don’t make the changes you’ll continue to live in torture because you’re skrimping to pay your bills. After a while it becomes really aggravating to continually stagger bills every single month just to get by.
Unlike the Government you cannot continue to borrow to live. One day you’ll pay with more than money. Your health, stress, etc.
No pain, no gain….
David Dassow
Part two update next time…
He actually moved into his in-laws in December of last year for 4 months (his original goal). He extended it to 6 months, followed by “any month now” he’d be moving out to “I don’t know when it will be”.
What went wrong?
First, he doesn’t particularly like to live with his in-laws. Second, his wife has a large spending problem and doesn’t mind living with her parents. Third, they have three kids who, like most kids, go with the flow.
So, what went wrong?
Well, it started out with the best of intentions. He began paying off bills one at a time and even had a time line for paying off everything even the two car loans. He changed it to paying off at least one car loan and the only bills left would be his truck payment.
A few months into the plan they took a family vacation to Disney land. That was followed up by several weekend get-a-ways (the whole family would stay in a resort to get away from it all)
From that point it became Spas for the wife, golf stuff for the husband.
Every once in a while I’d get updates from him on what’s happening. At first everything was on track and he couldn’t wait to get out of the in-laws house. After awhile it became I’d rather have this or that and I’m close to paying everything off.
By the 6th month he was talking about purchasing a home and how there were such good deals because of the housing market. When I asked if he had saved a down payment he said, “no.”
Have you saved anything? Have you paid off all the bills? Did you begin saving the monthly rent you used to pay out to get used to paying it out again?
All “NO” answers.
Now, it’s we are a few days shy of the eleventh month. All of the bills are not paid for. There is no money saved.
Unfortunately they have now gotten so use to not spending money on rent & utilities the will have a tough time coming up with that money once they move out. In addition, they have not paid off all of their bills (credit cards, car payments) and are now discussing purchasing a new car (on time).
The moral of the story?
If you do not go through some pain it is difficult to change bad habits. They have reverted to spending every dime they make and have nothing saved and plenty of bills to pay.
You’ve got to get mad about your situation. You’ve got to get mad and want to do something about it. You’ve got to get mad and make a commitment to a month, a year, what every it takes to become debt free.
Sometimes life forces you to make those changes. But, mark my words, if you don’t make the changes you’ll continue to live in torture because you’re skrimping to pay your bills. After a while it becomes really aggravating to continually stagger bills every single month just to get by.
Unlike the Government you cannot continue to borrow to live. One day you’ll pay with more than money. Your health, stress, etc.
No pain, no gain….
David Dassow
Part two update next time…
Tuesday, October 21, 2008
Smart Comments NOT
I get a lot of smart comments from people telling me I’m full of it. Well, I’d rather be full of it for suggesting you go against the grain and being a contrarian than being a conformist, an eighty percent(er).
I admit it’s not cool unless you borrow money. It’s not cool unless you owe money so you can “have it now”. My approach is different to what society tells you. The recent bail out has a fundamental flaw.
The flaw is this notion that consumers and business need to borrow more money to keep the economy going. The reality is you’ll need to pay the money back some day. You can’t borrow forever.
At some point you’ve got to pay it back.
This idea that businesses need or should borrow money for payroll is a bad idea. You have got to be able to maintain your normal bills without borrowing. If you have to borrow for the essentials you’ll go under relatively quickly.
The answer is to change your mindset with a 3 step approach to changing your habits and what society wants you to do and becoming debt free. Step one, stop borrowing money. Just stop it now.
Step two, pay down enough money so you can at least comfortably pay your bills. Step three is to pay off all your debt…and I mean all your debt including cars and your home. If you owe no money you can do what nobody else can do…you can also be generous.
Because CASH IS KING! When you have cash you have power. When you owe money you are powerless. Purchasing with cash is contrarian thinking. But, while everybody else is forced to stop spending because they owe more money than they can pay back you’ll have the ability to do what they can’t do.
The old saying is if you’ll do what no body else is willing to do now you’ll be able to do what nobody else can do later on.
David Dassow
I admit it’s not cool unless you borrow money. It’s not cool unless you owe money so you can “have it now”. My approach is different to what society tells you. The recent bail out has a fundamental flaw.
The flaw is this notion that consumers and business need to borrow more money to keep the economy going. The reality is you’ll need to pay the money back some day. You can’t borrow forever.
At some point you’ve got to pay it back.
This idea that businesses need or should borrow money for payroll is a bad idea. You have got to be able to maintain your normal bills without borrowing. If you have to borrow for the essentials you’ll go under relatively quickly.
The answer is to change your mindset with a 3 step approach to changing your habits and what society wants you to do and becoming debt free. Step one, stop borrowing money. Just stop it now.
Step two, pay down enough money so you can at least comfortably pay your bills. Step three is to pay off all your debt…and I mean all your debt including cars and your home. If you owe no money you can do what nobody else can do…you can also be generous.
Because CASH IS KING! When you have cash you have power. When you owe money you are powerless. Purchasing with cash is contrarian thinking. But, while everybody else is forced to stop spending because they owe more money than they can pay back you’ll have the ability to do what they can’t do.
The old saying is if you’ll do what no body else is willing to do now you’ll be able to do what nobody else can do later on.
David Dassow
Tuesday, October 7, 2008
The Government Bail-out
The Government Bail-out
You can’t borrow your way out of trouble. If you owe a thousand bucks and borrow a thousand more to pay off the first thousand…bottom line…you still owe a thousand bucks.
There are a couple schools of thought. One that says some debt is good debt and some “manageable” debt is ok.
And the other thought that any and all debt is bad.
And I guess, to a certain extent, some believe that owing a fortune is the best way to go.
When you owe no money. You have freedom. When you owe money you are in bondage.
Folks who believe in straddling the fence forget that when you have a hiccup you’ve got a problem.
Most of you know I advocate total debt free living. To steal a line, “if you live like no one else is willing to live now...you’ll be able to live like no one else can live later.”
David Dassow
You can’t borrow your way out of trouble. If you owe a thousand bucks and borrow a thousand more to pay off the first thousand…bottom line…you still owe a thousand bucks.
There are a couple schools of thought. One that says some debt is good debt and some “manageable” debt is ok.
And the other thought that any and all debt is bad.
And I guess, to a certain extent, some believe that owing a fortune is the best way to go.
When you owe no money. You have freedom. When you owe money you are in bondage.
Folks who believe in straddling the fence forget that when you have a hiccup you’ve got a problem.
Most of you know I advocate total debt free living. To steal a line, “if you live like no one else is willing to live now...you’ll be able to live like no one else can live later.”
David Dassow
Friday, September 19, 2008
How Much Extra Money Would Your Have Each Month if...
How much extra money would you have each month if…
It’s been awhile since I’ve don’t this but I thought I’d make a suggestion to you to help encourage you to get out of debt now.
Many times we don’t realize it even though we instinctively know it. We know if we didn’t write all these checks every month to credit card companies and car companies, and mortgage companies, and on and on….we’d have extra money left over instead of more month than money.
An easy way to figure out just how much extra money you’d have is to add up all the payments you make to your debtors. Don’t worry about how much you owe or how much you should or shouldn’t be paying.
Just add all the money you pay to your creditors for one month. Now, write that number down in big letters…..that’s how much extra money you’d have if you weren’t paying it to your creditors.
Think about it for a moment. How much more fun could you have if you didn’t have to spend that money every stinking month?
Now, here’s the good news. Pay off the debt now and you’ll be able to do what no one can do later because very few people make the wise choice to pay off all their debt. But when they pay off all their debt they not only have all that extra money, and fun, and peace of mind.
They’ve taken the chains off. They are free again.
David Dassow
It’s been awhile since I’ve don’t this but I thought I’d make a suggestion to you to help encourage you to get out of debt now.
Many times we don’t realize it even though we instinctively know it. We know if we didn’t write all these checks every month to credit card companies and car companies, and mortgage companies, and on and on….we’d have extra money left over instead of more month than money.
An easy way to figure out just how much extra money you’d have is to add up all the payments you make to your debtors. Don’t worry about how much you owe or how much you should or shouldn’t be paying.
Just add all the money you pay to your creditors for one month. Now, write that number down in big letters…..that’s how much extra money you’d have if you weren’t paying it to your creditors.
Think about it for a moment. How much more fun could you have if you didn’t have to spend that money every stinking month?
Now, here’s the good news. Pay off the debt now and you’ll be able to do what no one can do later because very few people make the wise choice to pay off all their debt. But when they pay off all their debt they not only have all that extra money, and fun, and peace of mind.
They’ve taken the chains off. They are free again.
David Dassow
Monday, July 28, 2008
Credit at an all time high
Credit at an all time high
Household debt levels are at an all-time high. Bankruptcy filings have increased. Credit card delinquency and charge-offs are at manageable levels but both are moving upward and are not likely to peak until late 2009.
Maybe we’re in a recession, maybe not. The bottom line for most of us right now is we need to be in a cash position. The stock market has been taking a beating and there have been several bank failures.
I know this blog is about debt and living debt-free but this information is important because if you live on debt you’re going to soon discover that credit is going to tighten because the Big Bankers are not dummies.
The big bankers know that if enough people don’t pay their credit card bills the banks will suffer and tighten the lending standards which creates a chain-reaction for you and I especially if we live totally on credit.
The rise of the “won’t pay” population. There are some folks who just will not pay their debts. This group of people has been increasing in size of late. This only furthers my argument that credit will have know choice but to tighten.
100% home loans are few and far between and many Big Bankers are realizing if they get a down payment toward the house it is less likely the Borrower will walk away from the house. BUT, if the Borrower has no money into the house and the values go down why would they stay in the house?
Once again, this means you need to be liquid. You must have cash, and you’d do well to be debt free. Look at my previous posts about how to get debt free but it is really important to start now on the road to paying cash for everything.
David Dassow
Household debt levels are at an all-time high. Bankruptcy filings have increased. Credit card delinquency and charge-offs are at manageable levels but both are moving upward and are not likely to peak until late 2009.
Maybe we’re in a recession, maybe not. The bottom line for most of us right now is we need to be in a cash position. The stock market has been taking a beating and there have been several bank failures.
I know this blog is about debt and living debt-free but this information is important because if you live on debt you’re going to soon discover that credit is going to tighten because the Big Bankers are not dummies.
The big bankers know that if enough people don’t pay their credit card bills the banks will suffer and tighten the lending standards which creates a chain-reaction for you and I especially if we live totally on credit.
The rise of the “won’t pay” population. There are some folks who just will not pay their debts. This group of people has been increasing in size of late. This only furthers my argument that credit will have know choice but to tighten.
100% home loans are few and far between and many Big Bankers are realizing if they get a down payment toward the house it is less likely the Borrower will walk away from the house. BUT, if the Borrower has no money into the house and the values go down why would they stay in the house?
Once again, this means you need to be liquid. You must have cash, and you’d do well to be debt free. Look at my previous posts about how to get debt free but it is really important to start now on the road to paying cash for everything.
David Dassow
Tuesday, July 8, 2008
Rule Number 4, If everyone else is doing it do the opposite
Rule Number 4, If everyone else is doing it do the opposite
I spoke with a couple recently who owe almost no money and own two cars a bunch of stuff and have well funded 401Ks and are sitting on $125,000.00 in cash.
By the time I got off the phone with them I suggested they pay off their home and go completely debt free.
Here’s the catch. They owe $128,000 on the house. Admittedly the thousand dollars a month they spend on the house payment will take 10 years to recover from the point is they currently make 1.27% interest on the money they have in the bank.
Just in case you don’t have a calculator it equals a whopping $1,587.50 a year in interest. They’re paying about $8,750.00 a year in interest to the bank to have the loan.
The $125,000 would be a better investment in paying off the loan. Within a few months they’d have a nice reserve fund again.
Now for the lesson. The majority of people would not pay off the loan. They would instead invest it or spend it but they would continue paying a monthly mortgage and I can guarantee you a C.P.A Account would advise them to keep the debt because of the tax write-off.
Without getting to detailed the tax write-off isn’t worth it either because you’re still paying the interest. It’d be much more financially beneficial to pay the extra couple of bucks on taxes…its way less than the write-off.
The moral of the story is what ever the majority are doing you should do the opposite.
David Dassow
I spoke with a couple recently who owe almost no money and own two cars a bunch of stuff and have well funded 401Ks and are sitting on $125,000.00 in cash.
By the time I got off the phone with them I suggested they pay off their home and go completely debt free.
Here’s the catch. They owe $128,000 on the house. Admittedly the thousand dollars a month they spend on the house payment will take 10 years to recover from the point is they currently make 1.27% interest on the money they have in the bank.
Just in case you don’t have a calculator it equals a whopping $1,587.50 a year in interest. They’re paying about $8,750.00 a year in interest to the bank to have the loan.
The $125,000 would be a better investment in paying off the loan. Within a few months they’d have a nice reserve fund again.
Now for the lesson. The majority of people would not pay off the loan. They would instead invest it or spend it but they would continue paying a monthly mortgage and I can guarantee you a C.P.A Account would advise them to keep the debt because of the tax write-off.
Without getting to detailed the tax write-off isn’t worth it either because you’re still paying the interest. It’d be much more financially beneficial to pay the extra couple of bucks on taxes…its way less than the write-off.
The moral of the story is what ever the majority are doing you should do the opposite.
David Dassow
Sunday, July 6, 2008
Rule Number 3, You'll Never Get Ahead If...
Rule Number 3..You’ll Never Get Ahead If…
You live above your means. It’s as simple as that. If you’re spending more than you make you’ll never get ahead, period. Exclamation point!
This may seem obvious but I gotta tell you that for years I’d say to myself I’m going to get ahead next payday. If I can hold on until next payday I’ll get ahead.
Well the next payday turned into the next turned into the next till finally a month goes by followed by another month which turned into 6 months and pretty soon several years went by and I was still saying wait until next payday.
You’ve heard me say you gotta get real mad before you do something about your present situation. There are plenty of commercials out there telling you they can reduce your debt or eliminate it altogether like a magician waving a wand.
Poof!
There goes the debt. If you’ve been reading this blog you know my opinion about cheating to lower your debt. You see the debt you have is a symptom of your problem. The debt you have is not your problem.
It may not seem like that to you. You might be thinking if I can just pay down a little bit of my debt I’d be alright. You won’t be alright and I’ll tell you why.
The problem you’re having is the same problem I had. I spent more money than I made. Just like you are. You’re spending more money than you make. It’s that simple. And if you were lucky enough to get some of your debt reduced you’d still have the same problem.
Your problem is your spending. You spend more than you make. Until you stop spending more than you make you’ll find you’re continually digging a deeper hole.
There are two steps to freedom. First step. STOP spending more money than you make. Second step. Pay down the debt you owe until you’ve paid all of it off. It’s that simple.
Because if you'll never get ahead if you spend more than you make….
David Dassow
You live above your means. It’s as simple as that. If you’re spending more than you make you’ll never get ahead, period. Exclamation point!
This may seem obvious but I gotta tell you that for years I’d say to myself I’m going to get ahead next payday. If I can hold on until next payday I’ll get ahead.
Well the next payday turned into the next turned into the next till finally a month goes by followed by another month which turned into 6 months and pretty soon several years went by and I was still saying wait until next payday.
You’ve heard me say you gotta get real mad before you do something about your present situation. There are plenty of commercials out there telling you they can reduce your debt or eliminate it altogether like a magician waving a wand.
Poof!
There goes the debt. If you’ve been reading this blog you know my opinion about cheating to lower your debt. You see the debt you have is a symptom of your problem. The debt you have is not your problem.
It may not seem like that to you. You might be thinking if I can just pay down a little bit of my debt I’d be alright. You won’t be alright and I’ll tell you why.
The problem you’re having is the same problem I had. I spent more money than I made. Just like you are. You’re spending more money than you make. It’s that simple. And if you were lucky enough to get some of your debt reduced you’d still have the same problem.
Your problem is your spending. You spend more than you make. Until you stop spending more than you make you’ll find you’re continually digging a deeper hole.
There are two steps to freedom. First step. STOP spending more money than you make. Second step. Pay down the debt you owe until you’ve paid all of it off. It’s that simple.
Because if you'll never get ahead if you spend more than you make….
David Dassow
Monday, June 30, 2008
You'll Never Get Ahead If You Borrow To Buy The Essentials
You’ll Never Get Ahead If You Borrow To Buy The Essentials
If you’re using your credit card to purchase the groceries, the gas, or any other monthly normal recurring bill you’re never gonna get ahead.
I know some of us now use credit cards to purchase everything. That’s fine. But, if you are not paying off the credit card at the end of the month you’re financing your normal bills. It means you’re spending even more money than you think on stuff you need and will never pay off your card.
Can you imagine paying interest on the Starbucks coffee and the gas tank? I use a debit card a lot to get gas and shop. A debit card whacks your checking account immediately. If you don’t have the cash you bounce it or don’t get it.
If you are in this position now its time to use my $15 dollar strategy. Do not continue to spend what you don’t have. Its like a ticking time bomb. Just waiting to go off.
David Dassow
If you’re using your credit card to purchase the groceries, the gas, or any other monthly normal recurring bill you’re never gonna get ahead.
I know some of us now use credit cards to purchase everything. That’s fine. But, if you are not paying off the credit card at the end of the month you’re financing your normal bills. It means you’re spending even more money than you think on stuff you need and will never pay off your card.
Can you imagine paying interest on the Starbucks coffee and the gas tank? I use a debit card a lot to get gas and shop. A debit card whacks your checking account immediately. If you don’t have the cash you bounce it or don’t get it.
If you are in this position now its time to use my $15 dollar strategy. Do not continue to spend what you don’t have. Its like a ticking time bomb. Just waiting to go off.
David Dassow
Sunday, June 29, 2008
You can't save money when you owe money
You can’t save money when you owe money
You ever wonder where the money goes after you leave a store purchasing an item when it dawns on you…I saved $10 on the purchase of this item, where’s the $10?
It’s the same if you attempt to save money while owing money. If you are paying the minimum payments on credit cards, car loans, home, home equity line, student loans you cannot save money.
Yes, I recommend saving 1 -3 months as reserves for those emergencies in life but under NO circumstances can you save money if you owe money.
The interest you pay on the money you owe is always more than the interest you make on the money you’ve saved. Therefore, from a money making perspective you would come out ahead by paying off your debt before you save.
Proving that you can’t save money when you owe money
David Dassow
You ever wonder where the money goes after you leave a store purchasing an item when it dawns on you…I saved $10 on the purchase of this item, where’s the $10?
It’s the same if you attempt to save money while owing money. If you are paying the minimum payments on credit cards, car loans, home, home equity line, student loans you cannot save money.
Yes, I recommend saving 1 -3 months as reserves for those emergencies in life but under NO circumstances can you save money if you owe money.
The interest you pay on the money you owe is always more than the interest you make on the money you’ve saved. Therefore, from a money making perspective you would come out ahead by paying off your debt before you save.
Proving that you can’t save money when you owe money
David Dassow
Friday, June 27, 2008
5 Rules to Live By
5 rules to live by
Rule Number 1
You can’t save money if you owe money
Rule Number 2
You’ll never get ahead if you borrow to buy the essentials
Rule Number 3
You’ll never get ahead if you live above your means
Rule Number 4
If everyone else is doing it do the opposite
Rule Number 5
The best investment you can make is one that gives you money
Not Costs YOU money
We’ll go through each of these over the next couple of days
David Dassow
Rule Number 1
You can’t save money if you owe money
Rule Number 2
You’ll never get ahead if you borrow to buy the essentials
Rule Number 3
You’ll never get ahead if you live above your means
Rule Number 4
If everyone else is doing it do the opposite
Rule Number 5
The best investment you can make is one that gives you money
Not Costs YOU money
We’ll go through each of these over the next couple of days
David Dassow
Monday, June 23, 2008
Can you tell the boss to shove-it?
I know we’ve all heard that we should have a reserve fund in place any where from 3 months to 6 months emergency money.
But, do you have shove-it money?
What’s shove-it money? There’s an old song called, “Take this job and shove it”
I always liked the song because I like the attitude of telling the boss to ‘shove it’.
Here’s the lesson though. Have you ever wondered what it would be like to have one years worth of expenses in the bank? Have you ever wondered what you could do or say to the boss if you had one year’s worth of dollars in the bank?
Let me tell you. When you have one year’s worth of expenses in the bank you can breath a sigh of relief, you feel better when you go to work, your whole attitude changes.
Now, if you’ve never experienced the feeling of having one year’s worth of expenses in the bank give it a try
You can do it. You can enjoy the idea of telling the boss to “shove it” because you’ve got “shove it” money.
David Dassow
But, do you have shove-it money?
What’s shove-it money? There’s an old song called, “Take this job and shove it”
I always liked the song because I like the attitude of telling the boss to ‘shove it’.
Here’s the lesson though. Have you ever wondered what it would be like to have one years worth of expenses in the bank? Have you ever wondered what you could do or say to the boss if you had one year’s worth of dollars in the bank?
Let me tell you. When you have one year’s worth of expenses in the bank you can breath a sigh of relief, you feel better when you go to work, your whole attitude changes.
Now, if you’ve never experienced the feeling of having one year’s worth of expenses in the bank give it a try
You can do it. You can enjoy the idea of telling the boss to “shove it” because you’ve got “shove it” money.
David Dassow
Sunday, June 22, 2008
Why not invest in yourself for a change?
You know, it’s amazing how we spend so much of our time worrying and so much of our money on interest from debt we owe that we never invest money in ourselves.
Forget about retirement for a moment.
What about having a couple of bucks in the bank or under the mattress so we can just run away for a few days and not have the debt collectors chasing after us?
What if we could just pay cash for a two or three day trip with our significant other and not worry about the bills?
And I’m not talking about taking the plastic with you and trying to squeeze a few dollars from your credit limits only to go cheap and worry about the credit card clearing when they run it through the machine.
I’m talking about taking several hundred dollars of cash and just having a good time.
That’s what investing in your self is all about. You get to have a little fun for a change and not worry about life in general.
How do I do this you ask?
You start a slush fund now. Use my $15 dollar a day strategy. I often used this line from a guy named Dave Ramsey. He says it differently. My version is:
You can have a little fun tomorrow if you’ll do what nobody else will do today.
Cash is king. Now, go and have some fun.
David Dassow
Forget about retirement for a moment.
What about having a couple of bucks in the bank or under the mattress so we can just run away for a few days and not have the debt collectors chasing after us?
What if we could just pay cash for a two or three day trip with our significant other and not worry about the bills?
And I’m not talking about taking the plastic with you and trying to squeeze a few dollars from your credit limits only to go cheap and worry about the credit card clearing when they run it through the machine.
I’m talking about taking several hundred dollars of cash and just having a good time.
That’s what investing in your self is all about. You get to have a little fun for a change and not worry about life in general.
How do I do this you ask?
You start a slush fund now. Use my $15 dollar a day strategy. I often used this line from a guy named Dave Ramsey. He says it differently. My version is:
You can have a little fun tomorrow if you’ll do what nobody else will do today.
Cash is king. Now, go and have some fun.
David Dassow
Saturday, June 21, 2008
A simple way to get debt free
A simple way to get debt free
You’ve gotta have a goal of being debt free. You’ve gotta get real mad to find the motivation.
But in order to be debt free you’ve got to take action. Only you can do it. Only you can make it happen. As long as you stay where you are and do what you do you’ll always get what you’re getting.
It begins by collecting every bill you have and putting it in a folder. Start the $15 dollar a day strategy and systematically going after each bill one at a time with the smallest first.
As you pay off each bill going from the smallest bill to the largest use the money from one paid off bill to go toward the other until you’re done.
Remember the definition of insanity: Doing the same thing over and over again expecting different results.
David Dassow
You’ve gotta have a goal of being debt free. You’ve gotta get real mad to find the motivation.
But in order to be debt free you’ve got to take action. Only you can do it. Only you can make it happen. As long as you stay where you are and do what you do you’ll always get what you’re getting.
It begins by collecting every bill you have and putting it in a folder. Start the $15 dollar a day strategy and systematically going after each bill one at a time with the smallest first.
As you pay off each bill going from the smallest bill to the largest use the money from one paid off bill to go toward the other until you’re done.
Remember the definition of insanity: Doing the same thing over and over again expecting different results.
David Dassow
Monday, June 16, 2008
A New AP Story On The Pit-Falls-Of-Debt
A new AP story on the pit-falls-of-debt
Just came out and it’s pretty depressing! The story talked about the emotions of being in debt and how it’s pretty tough on the debtor to live life with the emotions and pressures of owing lots of money.
I’m sure you can relate to the story.
I know I can. I’m more amazed that it took this long to realize when you owe a pile of money and can’t afford to pay it back, “that’s a problem”!
What the story should have done was to focus on the solution. The solution isn’t to borrow more money. The solution is to pay-off the debt and live debt free.
Until you change the way you do things you’re always gonna get the same results. The bigger question is, how do you make a change and go from living in debt and always thinking in terms of debt to living debt free and always thinking, “I won’t get it if I don’t have the cash”.
Cash is KING. The story doesn’t focus much on cash. But, if you go to a cash only mentality you’ll get rid of your debt and feel even better. You can live a life free of most of your stress. You can live a life free of the emotional ups and downs that go with staggering your bills to make the minimum monthly payments.
Look for the strategies I’ve posted on living debt free. Start with the $15 dollar strategy for one and treat the problem like you were eating an elephant. One bite at a time.
David Dassow
Just came out and it’s pretty depressing! The story talked about the emotions of being in debt and how it’s pretty tough on the debtor to live life with the emotions and pressures of owing lots of money.
I’m sure you can relate to the story.
I know I can. I’m more amazed that it took this long to realize when you owe a pile of money and can’t afford to pay it back, “that’s a problem”!
What the story should have done was to focus on the solution. The solution isn’t to borrow more money. The solution is to pay-off the debt and live debt free.
Until you change the way you do things you’re always gonna get the same results. The bigger question is, how do you make a change and go from living in debt and always thinking in terms of debt to living debt free and always thinking, “I won’t get it if I don’t have the cash”.
Cash is KING. The story doesn’t focus much on cash. But, if you go to a cash only mentality you’ll get rid of your debt and feel even better. You can live a life free of most of your stress. You can live a life free of the emotional ups and downs that go with staggering your bills to make the minimum monthly payments.
Look for the strategies I’ve posted on living debt free. Start with the $15 dollar strategy for one and treat the problem like you were eating an elephant. One bite at a time.
David Dassow
Thursday, June 5, 2008
It's a conspiracy!
The big banks are out to get you. It truly is a conspiracy of epic proportions. The whole goal of the bankers is to loan you money. As much money as they can so all you are able to do is pay the barest of minimum payments monthly.
The reason the big bankers want the bare minimum payment is because they make all (or nearly all) interest every month leaving the principle intact.
The reason it’s a conspiracy is because they’re all conspiring against you! All the credit card companies want is your money. Anyway and anytime they can get it. They’ll offer you more credit cards, they’ll offer you higher credit limits, they’ll tell you how you deserve it all.
Until you change your attitude about credit they’ll have you. Until you decide to get real mad about your situation they’ve got you. Until you decide to live like no one else is willing to live you’ll never get what you really want.
Debt free living allows you to be generous. Debt free living allows you to have more. Debt free living is just what the banks don’t want you to do. The banks all want the same thing, to keep you in bondage to them owing money.
David Dassow
The reason the big bankers want the bare minimum payment is because they make all (or nearly all) interest every month leaving the principle intact.
The reason it’s a conspiracy is because they’re all conspiring against you! All the credit card companies want is your money. Anyway and anytime they can get it. They’ll offer you more credit cards, they’ll offer you higher credit limits, they’ll tell you how you deserve it all.
Until you change your attitude about credit they’ll have you. Until you decide to get real mad about your situation they’ve got you. Until you decide to live like no one else is willing to live you’ll never get what you really want.
Debt free living allows you to be generous. Debt free living allows you to have more. Debt free living is just what the banks don’t want you to do. The banks all want the same thing, to keep you in bondage to them owing money.
David Dassow
Sunday, June 1, 2008
780 bucks goes to interest
Here’s a frightening thing. Collect your credit card statements for one month and check out how much of the minimum payment is interest. Let’s say your minimum payment is a hundred bucks. Chances are $78 dollars of the minimum payment is interest.
If your minimum payments total one thousand dollars $780 of it is interest. Can you imagine for just a moment what you could do with an extra $780 a month?
When you owe money you’ve got to pay interest to someone on the money you owe. Think long and hard about it. Paying interest to someone else stinks. Its plain and simple.
Every time you pay off one of these credit card shysters you empower yourself and free up more of your hard earned money.
Get rid of the credit cards and begin to free yourself of not only your money but also your peace of mind.
David Dassow
If your minimum payments total one thousand dollars $780 of it is interest. Can you imagine for just a moment what you could do with an extra $780 a month?
When you owe money you’ve got to pay interest to someone on the money you owe. Think long and hard about it. Paying interest to someone else stinks. Its plain and simple.
Every time you pay off one of these credit card shysters you empower yourself and free up more of your hard earned money.
Get rid of the credit cards and begin to free yourself of not only your money but also your peace of mind.
David Dassow
Saturday, May 24, 2008
Owing money will kill YOU!!!
It may not kill you in a moment like a gun can, it will kill you over time a slow an agonizing death. Because you’re worrying, because internally you’re behind the eight-ball and your insides are being systematically destroyed.
I’ve seen it for years and even experienced it 3 times in my own life. Owing money eats at you and it’s like being a drug addict. A good friend of mine, 20 years ago, was a recreational drug user. He would do drugs on weekends mostly but every now and then he would binge real bad.
No one would see him for several days. One day he binged so bad he ended up in the hospital a week later. He told me he’d be fine doing drugs occasionally but he just couldn’t stop himself…he’d just go nuts on drugs…
That’s what debt is like. We get offers in the mail from the Big Banks telling us how wonderful we are and because of our great credit we deserve the finer things in life so take this credit card and go have fun.
The problem is we get offer after offer and begin to think “we really do deserve it”. One credit card becomes two credit cards becomes three and on and on until all the credit cards are maxed out.
After we’ve maxed out the cards we discover we’ve got to pay off the cards and we don’t have enough money to pay them off. That’s when our health begins to suffer. We don’t realize it at first our brain goes into denial.
Then we work out small solutions to our problems moving balances here and there and maybe even eek out a little more money on the credit card line to help pay the minimum monthly payment. Once we’ve maxed out the cards we now are forced to pay them off…for many of us….one minimum payment at a time.
The minimum payments do not allow us much room for anything and now we’re really upset because we do not have any money left.
And the long hard road to recovery is what will wear you down and cause havoc with your health. For some of us it never ends. We never realize the problem in the first place because we started out as a recreational “credit card user” (a weekend drug user).
If you have any of the above problems you’re at the right place. Look at some previous posts to begin a new healthy life style today. You can recover before it’s too late. You can get back to debt free living. The benefits are huge because if you’ll live like no one else is willing to live today you’ll be able to live like no one else is able to live tomorrow.
David Dassow
I’ve seen it for years and even experienced it 3 times in my own life. Owing money eats at you and it’s like being a drug addict. A good friend of mine, 20 years ago, was a recreational drug user. He would do drugs on weekends mostly but every now and then he would binge real bad.
No one would see him for several days. One day he binged so bad he ended up in the hospital a week later. He told me he’d be fine doing drugs occasionally but he just couldn’t stop himself…he’d just go nuts on drugs…
That’s what debt is like. We get offers in the mail from the Big Banks telling us how wonderful we are and because of our great credit we deserve the finer things in life so take this credit card and go have fun.
The problem is we get offer after offer and begin to think “we really do deserve it”. One credit card becomes two credit cards becomes three and on and on until all the credit cards are maxed out.
After we’ve maxed out the cards we discover we’ve got to pay off the cards and we don’t have enough money to pay them off. That’s when our health begins to suffer. We don’t realize it at first our brain goes into denial.
Then we work out small solutions to our problems moving balances here and there and maybe even eek out a little more money on the credit card line to help pay the minimum monthly payment. Once we’ve maxed out the cards we now are forced to pay them off…for many of us….one minimum payment at a time.
The minimum payments do not allow us much room for anything and now we’re really upset because we do not have any money left.
And the long hard road to recovery is what will wear you down and cause havoc with your health. For some of us it never ends. We never realize the problem in the first place because we started out as a recreational “credit card user” (a weekend drug user).
If you have any of the above problems you’re at the right place. Look at some previous posts to begin a new healthy life style today. You can recover before it’s too late. You can get back to debt free living. The benefits are huge because if you’ll live like no one else is willing to live today you’ll be able to live like no one else is able to live tomorrow.
David Dassow
Wednesday, May 21, 2008
Income vs. Net Worth
Building your financial fortress requires a completely different view-point then the common views out there. Far to many people look at income and focus on income when the reality is:
It’s about the net.
Here’s why. You can gross $100,000.00 a year and spend every dime and have no money and even owe money and be totally behind the eight-ball and think you’re doing well.
Or, you could make $50,000.00 a year and spend $45,000.00 of it and keep $5,000.00 dollars and be way ahead of your colleagues.
It’s not what you make, it’s what you keep. It isn’t how much money you run through the checking account…it’s how much you keep in the checking account.
Every time you borrow money you spend money you haven’t made yet. You are, in fact, spending money you’ll make next year to satisfy the money you’re spending today.
All you have to do is add up assets and subtract what you owe…this equals your net worth. If your net worth is a negative (-) than you are in the hole.
The way to get positive is to pay off all your debt then rework the calculation and you’ll discover you are in the positive.
David Dassow
It’s about the net.
Here’s why. You can gross $100,000.00 a year and spend every dime and have no money and even owe money and be totally behind the eight-ball and think you’re doing well.
Or, you could make $50,000.00 a year and spend $45,000.00 of it and keep $5,000.00 dollars and be way ahead of your colleagues.
It’s not what you make, it’s what you keep. It isn’t how much money you run through the checking account…it’s how much you keep in the checking account.
Every time you borrow money you spend money you haven’t made yet. You are, in fact, spending money you’ll make next year to satisfy the money you’re spending today.
All you have to do is add up assets and subtract what you owe…this equals your net worth. If your net worth is a negative (-) than you are in the hole.
The way to get positive is to pay off all your debt then rework the calculation and you’ll discover you are in the positive.
David Dassow
The power of momentum
Momentum is going in a given direction picking up steam along the way. The more steam you pick up the faster you go and the more “momentum” you have to get you where you’re going.
In sports, coaches really pay attention to momentum. An interception in football can literally change the entire game. What’s amazing about momentum is the opposite reaction you can have to it.
If you’re in a football game and working the ball down the field getting closer and closer to a score you’re picking up momentum.
BUT, an interception comes along and all of a sudden “the momentum” is gone.
That’s what it’s like to pay off your bills, to pay them down at an accelerated pace. You get momentum going and you sort of get on a “roll” paying off one credit card, then another, then still another.
There’s something powerful about momentum.
Today’s lesson is to maintain that momentum no matter who comes a long to muck it up for you. Keep going because when you score NO DEBT you have an instant raise, instant peace of mind, and instant rewards because you’ll be able to do what your friends, family and co-workers can’t.
If you’ll do what no one else will do now, you’ll be able to do what no one else can do later. A saying, paraphrased by Dave Ramsey.
Now, go get the momentum.
David Dassow
In sports, coaches really pay attention to momentum. An interception in football can literally change the entire game. What’s amazing about momentum is the opposite reaction you can have to it.
If you’re in a football game and working the ball down the field getting closer and closer to a score you’re picking up momentum.
BUT, an interception comes along and all of a sudden “the momentum” is gone.
That’s what it’s like to pay off your bills, to pay them down at an accelerated pace. You get momentum going and you sort of get on a “roll” paying off one credit card, then another, then still another.
There’s something powerful about momentum.
Today’s lesson is to maintain that momentum no matter who comes a long to muck it up for you. Keep going because when you score NO DEBT you have an instant raise, instant peace of mind, and instant rewards because you’ll be able to do what your friends, family and co-workers can’t.
If you’ll do what no one else will do now, you’ll be able to do what no one else can do later. A saying, paraphrased by Dave Ramsey.
Now, go get the momentum.
David Dassow
Tuesday, May 20, 2008
A friend of mine made a discovery
While reviewing the status of his bill paying and where he’s currently at on his six month plan I gotta tell you he’s doing well, very well.
Here’s his discovery, “Dave, I’m about two weeks behind on my game-plan. But, I’ve made a decision. First, though here’s my discovery: I got a $1,000 dollar raise the other day. You might be wondering what I had to do to get a thousand dollars more each and every month? I’ll tell you. I’ve paid off a sufficient amount of my bills that worked out to $1,000.00 in minimum payments.
That equals one thousand dollars a month more I get to keep. In fact, it’s larger then $1000.00 because that’s the net number to my wallet. Of course, I’m not quite able to enjoy the money because I’m using those funds to finish paying off my bills.
You can have the same discovery if you’ll put your plan into action and pay off those bills. Use the strategies in this blog, they’re free, you’ve got no excuse not to do it and you’ve just heard a success story.
Now, go and do it.
David Dassow
Here’s his discovery, “Dave, I’m about two weeks behind on my game-plan. But, I’ve made a decision. First, though here’s my discovery: I got a $1,000 dollar raise the other day. You might be wondering what I had to do to get a thousand dollars more each and every month? I’ll tell you. I’ve paid off a sufficient amount of my bills that worked out to $1,000.00 in minimum payments.
That equals one thousand dollars a month more I get to keep. In fact, it’s larger then $1000.00 because that’s the net number to my wallet. Of course, I’m not quite able to enjoy the money because I’m using those funds to finish paying off my bills.
You can have the same discovery if you’ll put your plan into action and pay off those bills. Use the strategies in this blog, they’re free, you’ve got no excuse not to do it and you’ve just heard a success story.
Now, go and do it.
David Dassow
Saturday, May 17, 2008
The biggest killer you've got to deal with
Is Procrastination. It is an absolute demoralizing rotten, dirty, scummy, worst thing to happen to you. Procrastination will suck the wind right out of your lungs.
The only thing worst than procrastination is not learning from your mistakes. Another definition for insanity is to make the same mistakes over and over again expecting different results.
One last thought on procrastination. It almost invites envy. The more envious you are the more likely you are to procrastinate getting out of debt. Envy is a killer. Envy makes you wish you had someone else’s stuff. Envy makes you think you some how deserve something.
Well, it ain’t going to happen. You might as well get over it because you can’t have what’s not yours and the only thing worse in life is to be jealous of things you don’t have. Quit it right now. Get over it and appreciate what you have.
And eliminate the procrastination and get out of debt. Because if you’ll do what the 80% crowd won’t do you’ll be able to do what the 20% crowd can do that the 80% percenters are all envious at.
David Dassow
The only thing worst than procrastination is not learning from your mistakes. Another definition for insanity is to make the same mistakes over and over again expecting different results.
One last thought on procrastination. It almost invites envy. The more envious you are the more likely you are to procrastinate getting out of debt. Envy is a killer. Envy makes you wish you had someone else’s stuff. Envy makes you think you some how deserve something.
Well, it ain’t going to happen. You might as well get over it because you can’t have what’s not yours and the only thing worse in life is to be jealous of things you don’t have. Quit it right now. Get over it and appreciate what you have.
And eliminate the procrastination and get out of debt. Because if you’ll do what the 80% crowd won’t do you’ll be able to do what the 20% crowd can do that the 80% percenters are all envious at.
David Dassow
Are you making the same dumb mistake too
A friend, or I should say, someone I really don’t know well told me of a recent experience he had and he was not happy at all.
He had gone to a church early one Saturday morning for a “men’s prayer breakfast” and here’s why he wasn’t happy
He couldn’t pay his car payment and he was looking for money and he wasn’t too happy because he didn’t get any money from the church and he still had his car payment to make.
Are you making the same dumb mistake?
I found it interesting that this guy who doesn’t know anyone at the church was upset because the “free” handout he’s looking for never materialized.
Have you found yourself with a lottery ticket hoping to get something for free? Do you get your hopes up at getting something for “free” or some great game plan to get you out of the debt mess you find yourself in…for free?
Okay, I’ll give you the dumb mistake.
I’ve been exactly where you are. I’ve been in debt so bad I saw no way out of it. When I was in debt so bad my attitude changed and I began to feel like I had a “right” to this or that. That somebody should give me something for free to help me out of the mess I was in.
It was someone else’s fault never my own. If this had gone better or if I just got a raise or came into some money or a relative helped me out or a friend helped me make a payment or THE CHURCH came through with some money everything would be alright.
Well, that’s the dumb mistake. The thinking that if you get something for free everything’s gonna be alright. It’s a dumb mistake because no one, yes no one, got you into your present position except YOU. Look in the mirror…take a good hard look in the mirror.
It’s YOU. You did it. You got yourself into trouble and no one but you can get yourself out of trouble. It’s all up to you and I can guarantee you one thing…
If you find someone STUPID enough to help you out of your present situation you’ll find yourself back in your present situation very quickly because you didn’t pay a THING, not one thing to get out of trouble.
You and only you have to be the one to “work the second job”, to work overtime, to sell stuff, to claw your way out of debt because…when you do it…when it’s done by you…
You’ll actually appreciate being debt free because you actually worked to get debt free…you paid for it. You worked hard to get into debt and you’ll work doubly hard to get out of debt but it will be your work that does it.
You’ll appreciate it even more and will be less likely to go back into debt.
David Dassow
He had gone to a church early one Saturday morning for a “men’s prayer breakfast” and here’s why he wasn’t happy
He couldn’t pay his car payment and he was looking for money and he wasn’t too happy because he didn’t get any money from the church and he still had his car payment to make.
Are you making the same dumb mistake?
I found it interesting that this guy who doesn’t know anyone at the church was upset because the “free” handout he’s looking for never materialized.
Have you found yourself with a lottery ticket hoping to get something for free? Do you get your hopes up at getting something for “free” or some great game plan to get you out of the debt mess you find yourself in…for free?
Okay, I’ll give you the dumb mistake.
I’ve been exactly where you are. I’ve been in debt so bad I saw no way out of it. When I was in debt so bad my attitude changed and I began to feel like I had a “right” to this or that. That somebody should give me something for free to help me out of the mess I was in.
It was someone else’s fault never my own. If this had gone better or if I just got a raise or came into some money or a relative helped me out or a friend helped me make a payment or THE CHURCH came through with some money everything would be alright.
Well, that’s the dumb mistake. The thinking that if you get something for free everything’s gonna be alright. It’s a dumb mistake because no one, yes no one, got you into your present position except YOU. Look in the mirror…take a good hard look in the mirror.
It’s YOU. You did it. You got yourself into trouble and no one but you can get yourself out of trouble. It’s all up to you and I can guarantee you one thing…
If you find someone STUPID enough to help you out of your present situation you’ll find yourself back in your present situation very quickly because you didn’t pay a THING, not one thing to get out of trouble.
You and only you have to be the one to “work the second job”, to work overtime, to sell stuff, to claw your way out of debt because…when you do it…when it’s done by you…
You’ll actually appreciate being debt free because you actually worked to get debt free…you paid for it. You worked hard to get into debt and you’ll work doubly hard to get out of debt but it will be your work that does it.
You’ll appreciate it even more and will be less likely to go back into debt.
David Dassow
Friday, May 16, 2008
70% of Rich Folks Are Debt-Free, the other...
30% have debt in real estate only. Rich folks don’t owe money. It’s not because they are rich that they don’t owe money it’s because they are debt-free.
If you’re going to copy someone, duplicate their philosophy including everything. Most rich folks will tell you that owing money is stupid because you waste so much of it on interest.
Rich people are generous. You can’t be generous when you owe money.
Rich people drive older cars. Rich people do not try to live like they are rich, they already are.
Rich people tend to work hard. They tend to be self-employed. Rich people don’t tend to trade dollars for hours. But, if they do trade dollars for hours they do it with a positive cash-flow. They tend to live below there means. They tend to view their income from this stand-point:
It’s not how much you make its how much you keep. If you make a hundred dollars and spend $90 dollars you get to keep $10.
People in debt tend to make a hundred dollars and spend $110. always getting further behind and always wishing they had more instead of spending less.
Well to do people buy when have the money. They don’t borrow money to buy something. If they don’t have the money they don’t buy the item.
It’s all about your attitude. Get the right attitude and you’ll have money.
David Dassow
If you’re going to copy someone, duplicate their philosophy including everything. Most rich folks will tell you that owing money is stupid because you waste so much of it on interest.
Rich people are generous. You can’t be generous when you owe money.
Rich people drive older cars. Rich people do not try to live like they are rich, they already are.
Rich people tend to work hard. They tend to be self-employed. Rich people don’t tend to trade dollars for hours. But, if they do trade dollars for hours they do it with a positive cash-flow. They tend to live below there means. They tend to view their income from this stand-point:
It’s not how much you make its how much you keep. If you make a hundred dollars and spend $90 dollars you get to keep $10.
People in debt tend to make a hundred dollars and spend $110. always getting further behind and always wishing they had more instead of spending less.
Well to do people buy when have the money. They don’t borrow money to buy something. If they don’t have the money they don’t buy the item.
It’s all about your attitude. Get the right attitude and you’ll have money.
David Dassow
Thursday, May 15, 2008
Celebrate with a Starbucks...
Every time you pay off a bill, no matter how small or large, celebrate it with something small yet desired. A nice cup of coffee, chocolate, dinner, or dessert.
It’s encouraging. It’s helpful. It’s wonderful. It’s fantastic to pay off a bill whether it’s a $300 dollar bill or a $3,000 bill.
Your Psychological well being is important. You must develop a reward system for the results of paying down debt. The reward keeps you going.
If you use my $15 dollar a day strategy you can take a day or two; $15- $30 and reward yourself.
Try it!
David Dassow
It’s encouraging. It’s helpful. It’s wonderful. It’s fantastic to pay off a bill whether it’s a $300 dollar bill or a $3,000 bill.
Your Psychological well being is important. You must develop a reward system for the results of paying down debt. The reward keeps you going.
If you use my $15 dollar a day strategy you can take a day or two; $15- $30 and reward yourself.
Try it!
David Dassow
Tuesday, May 13, 2008
My friend hasn't made a house payment in 5 1/2 months...
And boy is he in for a surprise in six weeks! Here’s a refresher. He moved his family in with the in-laws 5 ½ months ago with the number one goal of paying off all his bills so he could be debt-free.
It started out a little rough. Not with the bill paying but living with the in-laws. Now, they’ve figured out how to deal with the in-laws but he’s gotten lazy at paying down the bills.
Hence the house payment problem. I had suggested to him that he pay his old rent every month. “Just write out a check to a bank (miles away and pretty hard to get the money back out) in the amount of your rent because one day when you move out of the in-law’s house your going to have STICKER SHOCK!
Well, guess what? He didn’t do it. In our last meeting I asked where he’s at on his bill pay-off schedule. He originally planned on paying everything off in 6 months. It’s not going to happen! And, when I again suggested he pay rent June 1 he was reluctant to do it.
Now, I don’t know about you but taking my advice or not is the issue. The issue is not sticking with the game plan. If they move out in 6 weeks (one month beyond the original plan) he won’t have paid off all his bills.
Yes, he paid off some, but none of the cars. In the mean time both him and his wife and the kids have a whole lot of new toys.
You can have what no one else can have if you’ll do what no one else will do. This comes from Dave Ramsey and I agree with him 100% with one minor addition.
If you live life debt free you can afford to be generous and you reduce a whole lot of stress and make your life enjoyable and simple.
David Dassow
It started out a little rough. Not with the bill paying but living with the in-laws. Now, they’ve figured out how to deal with the in-laws but he’s gotten lazy at paying down the bills.
Hence the house payment problem. I had suggested to him that he pay his old rent every month. “Just write out a check to a bank (miles away and pretty hard to get the money back out) in the amount of your rent because one day when you move out of the in-law’s house your going to have STICKER SHOCK!
Well, guess what? He didn’t do it. In our last meeting I asked where he’s at on his bill pay-off schedule. He originally planned on paying everything off in 6 months. It’s not going to happen! And, when I again suggested he pay rent June 1 he was reluctant to do it.
Now, I don’t know about you but taking my advice or not is the issue. The issue is not sticking with the game plan. If they move out in 6 weeks (one month beyond the original plan) he won’t have paid off all his bills.
Yes, he paid off some, but none of the cars. In the mean time both him and his wife and the kids have a whole lot of new toys.
You can have what no one else can have if you’ll do what no one else will do. This comes from Dave Ramsey and I agree with him 100% with one minor addition.
If you live life debt free you can afford to be generous and you reduce a whole lot of stress and make your life enjoyable and simple.
David Dassow
Monday, May 12, 2008
Backsliding is a necessary evil...
A recent conversation I had with a friend netted some disturbing results. He’s had some huge opportunities to finish off his debt and be debt free but he’s backslid.
You’ve heard me say before that when you’re in the middle of paying down debt new found money seems to appear from nowhere. It might be a tax return, over time, promotion, or anyone of a number of unexpected things but the result is…
You get found money.
What you do with that money can be a real temptation. It’s easy to resort back to what got you in trouble in the first place. Here’s a reminder. You got into trouble because you’re spending more money than you have.
It’s tough love. But it’s true. The road to debt free living can be difficult if you’re not focused or you backslide for different reasons.
It can be tough to stay focused, to stay mad, as your situation improves but you gotta do it. You’ve got to stay MAD and FOCUSED!
If you don’t you’ll end up like my friend. He’s about to get a dose of reality when his new found money disappears and he’s back to square one. The difference this time will be his sense of defeat.
As you’ve heard me say, get MAD, get real MAD. Stay FOCUSED, stay real FOCUSED in your debt plan because you can do it.
Now, go do it.
David Dassow
You’ve heard me say before that when you’re in the middle of paying down debt new found money seems to appear from nowhere. It might be a tax return, over time, promotion, or anyone of a number of unexpected things but the result is…
You get found money.
What you do with that money can be a real temptation. It’s easy to resort back to what got you in trouble in the first place. Here’s a reminder. You got into trouble because you’re spending more money than you have.
It’s tough love. But it’s true. The road to debt free living can be difficult if you’re not focused or you backslide for different reasons.
It can be tough to stay focused, to stay mad, as your situation improves but you gotta do it. You’ve got to stay MAD and FOCUSED!
If you don’t you’ll end up like my friend. He’s about to get a dose of reality when his new found money disappears and he’s back to square one. The difference this time will be his sense of defeat.
As you’ve heard me say, get MAD, get real MAD. Stay FOCUSED, stay real FOCUSED in your debt plan because you can do it.
Now, go do it.
David Dassow
Saturday, May 10, 2008
If you're behind the eight-ball there's only one thing to do...
Change positions!
I’ve been behind the eight-ball. I’ve been exactly where you are right now, right this minute! I know what it’s like to be behind on your bills, to have collectors calling you all hours of the night, to feel pressure, to know when the phone rings it’s probably a collector waiting to pounce on you!
I’ve talked about remedies for being in debt up to your eye-balls! I’ve given strategies on how to deal with debt. I’ve even mentioned that you gotta get MAD, real MAD, in order to do something about your situation.
Well, today we’re going to talk about being behind the eight-ball. Here’s the example. If you’ve ever had a solicitor call you to sell you something as soon as you answer the phone the first word the solicitor says “gives it away.”
The conversation might go like this: “Mister Jones?” Yes. “Mister Jim Jones?” Yes. “How are you doing today Mister Jones?” Fine.
Dead giveaway!!
Now, when you get a call like this: “Mister Jones?” Yes. “Mister Jim Jones?” Yes. “Sir, I must inform you that this is an attempt to collect a debt and this call may be monitored for quality assurance. Mister Jones I see you owe us $658.09 how will you be taking care of this today?”
It doesn’t matter how you respond. You’re behind the eight-ball and they know it. It doesn’t matter how you respond because no matter what you say it won’t be sufficient enough because they want their money and you don’t have it and you are…
Behind the eight-ball.
Now, the answer is simple really. All you gotta do is pay them what you owe them. Right? Well, if you don’t got the money you don’t got it. So, what do you do to get out from being behind the eight-ball?
Well, here’s one thing you could do. Don’t answer the phone! Begin the process of getting real mad about your situation. Get so damn mad that you do something about it. Once you get to that point, the boiling point, begin the debt reduction plan(s) I’ve outlined in previous posts.
And, to steal a line from Nike. JUST DO IT!
David Dassow
I’ve been behind the eight-ball. I’ve been exactly where you are right now, right this minute! I know what it’s like to be behind on your bills, to have collectors calling you all hours of the night, to feel pressure, to know when the phone rings it’s probably a collector waiting to pounce on you!
I’ve talked about remedies for being in debt up to your eye-balls! I’ve given strategies on how to deal with debt. I’ve even mentioned that you gotta get MAD, real MAD, in order to do something about your situation.
Well, today we’re going to talk about being behind the eight-ball. Here’s the example. If you’ve ever had a solicitor call you to sell you something as soon as you answer the phone the first word the solicitor says “gives it away.”
The conversation might go like this: “Mister Jones?” Yes. “Mister Jim Jones?” Yes. “How are you doing today Mister Jones?” Fine.
Dead giveaway!!
Now, when you get a call like this: “Mister Jones?” Yes. “Mister Jim Jones?” Yes. “Sir, I must inform you that this is an attempt to collect a debt and this call may be monitored for quality assurance. Mister Jones I see you owe us $658.09 how will you be taking care of this today?”
It doesn’t matter how you respond. You’re behind the eight-ball and they know it. It doesn’t matter how you respond because no matter what you say it won’t be sufficient enough because they want their money and you don’t have it and you are…
Behind the eight-ball.
Now, the answer is simple really. All you gotta do is pay them what you owe them. Right? Well, if you don’t got the money you don’t got it. So, what do you do to get out from being behind the eight-ball?
Well, here’s one thing you could do. Don’t answer the phone! Begin the process of getting real mad about your situation. Get so damn mad that you do something about it. Once you get to that point, the boiling point, begin the debt reduction plan(s) I’ve outlined in previous posts.
And, to steal a line from Nike. JUST DO IT!
David Dassow
Thursday, May 8, 2008
Debt Free Living is a Simple Process
We’ve talked about this before. You can be debt free no matter how bad things look today. You can do it even though the credit card companies are out to get you, lie to you every single day, and continue to make offers to you for more credit cards.
The simple system to get out of debt is:
Collect every credit card payment as it comes in. Take the smallest balance credit card and apply all your extra cash to it. See a previous post for a way to come up with $15 dollars a day strategy.
When you pay off the lowest balance celebrate, under $15. and begin the next lowest balanced card.
Use the other strategies I recommend including an extra job, garage sale, over-time, tax returns, and found money to pay off early. It’s a good idea to have a reserve fund of at least $500 dollars. Its emergency money, I mean emergency. Vacations are not an emergency.
Repeat this process until you’ve paid off all your credit card debt. The nest step is fixed payments such as car, personal loans, and homes. Once again use the same concept strategy as credit cards. Go after the smallest balance first and now you can focus all the money you were paying toward credit cards toward the fixed loans.
Don’t stop, keep the momentum going and you can do it.
David Dassow
The simple system to get out of debt is:
Collect every credit card payment as it comes in. Take the smallest balance credit card and apply all your extra cash to it. See a previous post for a way to come up with $15 dollars a day strategy.
When you pay off the lowest balance celebrate, under $15. and begin the next lowest balanced card.
Use the other strategies I recommend including an extra job, garage sale, over-time, tax returns, and found money to pay off early. It’s a good idea to have a reserve fund of at least $500 dollars. Its emergency money, I mean emergency. Vacations are not an emergency.
Repeat this process until you’ve paid off all your credit card debt. The nest step is fixed payments such as car, personal loans, and homes. Once again use the same concept strategy as credit cards. Go after the smallest balance first and now you can focus all the money you were paying toward credit cards toward the fixed loans.
Don’t stop, keep the momentum going and you can do it.
David Dassow
Monday, May 5, 2008
You make decisions because...
“You don’t make decisions because they are easy;
You don’t make them because they are cheap;
You don’t make them because they’re popular;
You make them because they are RIGHT.”
-- Theodore Hesburgh
There’s a bible verse that goes more or less: “one man pretends to be rich, yet has nothing; another pretends to be poor, yet has great wealth.”
In the book THE MILLIONAIRE NEXT DOOR, Thomas Stanley and William Danko shared several shocking revelations. Most millionaires purchase their suits off the rack, they drive used cars, and shop at Sears.
What’s the point to all of this? The point is the 80% crowd, (80% of the US population), want us to think they have more money than they do. To show they have more money than they do they spend it.
The only problem is the 80% crowd BORROWS the money because they don’t really have it. Now, I don’t know if you are in the 80% crowd or wish you could show everyone you have more than you have.
Where do you fit in all this? If you’re in the 20% well to do crowd odds are you don’t have to prove that fact to anyone.
If you’re in the 80% crowd odds are you want to show everyone you’re in the 20% crowd. Kind of a contradiction in terms. To rephrase it. If you’ve got it you don’t show it, if you don’t got it you try and show that you do got it.
The lesson here is if you are borrowing to show folks you’ve got it you’re heading toward a state of BROKE. Another way of putting it is KEEPING UP WITH THE JONES is not a good idea.
It’s more than getting out of debt. It’s living under the radar screen. It’s living like the well to do 20% with out even showing it.
David Dassow
You don’t make them because they are cheap;
You don’t make them because they’re popular;
You make them because they are RIGHT.”
-- Theodore Hesburgh
There’s a bible verse that goes more or less: “one man pretends to be rich, yet has nothing; another pretends to be poor, yet has great wealth.”
In the book THE MILLIONAIRE NEXT DOOR, Thomas Stanley and William Danko shared several shocking revelations. Most millionaires purchase their suits off the rack, they drive used cars, and shop at Sears.
What’s the point to all of this? The point is the 80% crowd, (80% of the US population), want us to think they have more money than they do. To show they have more money than they do they spend it.
The only problem is the 80% crowd BORROWS the money because they don’t really have it. Now, I don’t know if you are in the 80% crowd or wish you could show everyone you have more than you have.
Where do you fit in all this? If you’re in the 20% well to do crowd odds are you don’t have to prove that fact to anyone.
If you’re in the 80% crowd odds are you want to show everyone you’re in the 20% crowd. Kind of a contradiction in terms. To rephrase it. If you’ve got it you don’t show it, if you don’t got it you try and show that you do got it.
The lesson here is if you are borrowing to show folks you’ve got it you’re heading toward a state of BROKE. Another way of putting it is KEEPING UP WITH THE JONES is not a good idea.
It’s more than getting out of debt. It’s living under the radar screen. It’s living like the well to do 20% with out even showing it.
David Dassow
Saturday, May 3, 2008
You've got to quit borrowing
The first step to debt free living is to stop the borrowing. You’ve got to stop borrowing. The worst thing you can do is start paying down your debt while still using your credit cards.
Just say, “that’s it, I’m not borrowing anymore.”
Check previous posts for getting real mad about your situation.
Think of it this way. If you go to the doctor bleeding from your hand what is the first thing you want the doctor to do? Do you tell him to do surgery? Do you tell him to check out a bruise on your leg?
NO!
You ask the doctor to stop the bleeding.
If you’re still using your credit cards you’re still bleeding. And if you’re still bleeding you aren’t solving the problem.
Stop the bleeding first. Stop spending on your credit cards. Cut them up, put them in a drawer, stick them in a safety deposit box, freeze them, but what every you do quit using your credit cards.
The first step is to stop the bleeding. Stop using your credit cards and you’ll stop the bleeding.
David Dassow
Just say, “that’s it, I’m not borrowing anymore.”
Check previous posts for getting real mad about your situation.
Think of it this way. If you go to the doctor bleeding from your hand what is the first thing you want the doctor to do? Do you tell him to do surgery? Do you tell him to check out a bruise on your leg?
NO!
You ask the doctor to stop the bleeding.
If you’re still using your credit cards you’re still bleeding. And if you’re still bleeding you aren’t solving the problem.
Stop the bleeding first. Stop spending on your credit cards. Cut them up, put them in a drawer, stick them in a safety deposit box, freeze them, but what every you do quit using your credit cards.
The first step is to stop the bleeding. Stop using your credit cards and you’ll stop the bleeding.
David Dassow
What credit card companies don't want you to know
Anytime a credit card company calls you “good-credit people” start running. Credit card companies refer to people who keep balances on their credit cards as quality folks. The credit card companies love you when you owe them money.
If, on the other hand, you pay off your credit card balance at the end of every month…the credit card companies don’t like you…and don’t be surprised if they cut you off. Basically, the credit card people think of you as a “dead-beat” if you pay off your credit cards every month.
Now, think about this for a moment. If the big credit card companies love you when you owe them money and consider you a good-credit customer what does that really say to you?
Maybe you (and me) are the dummy?
Credit card companies are in business for one thing and one thing only…Money. They want your money. Credit card companies loan you money and hope you don’t pay it off so they can make 13% - 24% interest.
The rest of the story is if you pay the minimum payments on credit cards it will take you 27 years to pay it off with thousands of thousands of dollars you’ll pay in interest. Way more money than what you originally borrowed.
So, the next time a credit card company tells you you’re such a good customer begin to run quickly. Unless you beat the banks at their own game…paying off your credit cards and not having to pay the big banks interest is the smart way to go.
Why don’t you become a bad customer to the bank…a dead-beat because you’ve paid everything off and now the big credit card companies can’t make any money off you.
David Dassow
If, on the other hand, you pay off your credit card balance at the end of every month…the credit card companies don’t like you…and don’t be surprised if they cut you off. Basically, the credit card people think of you as a “dead-beat” if you pay off your credit cards every month.
Now, think about this for a moment. If the big credit card companies love you when you owe them money and consider you a good-credit customer what does that really say to you?
Maybe you (and me) are the dummy?
Credit card companies are in business for one thing and one thing only…Money. They want your money. Credit card companies loan you money and hope you don’t pay it off so they can make 13% - 24% interest.
The rest of the story is if you pay the minimum payments on credit cards it will take you 27 years to pay it off with thousands of thousands of dollars you’ll pay in interest. Way more money than what you originally borrowed.
So, the next time a credit card company tells you you’re such a good customer begin to run quickly. Unless you beat the banks at their own game…paying off your credit cards and not having to pay the big banks interest is the smart way to go.
Why don’t you become a bad customer to the bank…a dead-beat because you’ve paid everything off and now the big credit card companies can’t make any money off you.
David Dassow
Debt means you'll mortgage your future for today
“Debt keeps you stuck in the trap of using your future to pay for your past.” --Mary Hunt
It’s a difficult concept to understand. But once you get it you GET IT. When you owe money, when you’re in debt, especially when you’re in debt up to your eye balls, you are unequivocally, without a doubt, spending your future earnings to enjoy today, the now.
If you make $50,000.00 dollars a year and spend $75,000.00 dollars a year you’ll pay the difference of $25,000.00 in future income. Here’s the frightening part. Spend twenty-five thousand dollars more than you make for five years and you’re in the hole $125,000.00 dollars.
I mean really, how the hell are you gonna pay it off? Continue financing? Continue borrowing more than you make? Are you nuts?
There are only three possibilities to getting out of debt. Possibility number one, spend less than you make and use the difference to pay off debt. Possibility number two, make more money. Possibility three, sell assets, do garage sales and what-ever-else to generate extra dollars.
Understand that if you owe money you are mortgaging your future for the past, or the present.
David Dassow
It’s a difficult concept to understand. But once you get it you GET IT. When you owe money, when you’re in debt, especially when you’re in debt up to your eye balls, you are unequivocally, without a doubt, spending your future earnings to enjoy today, the now.
If you make $50,000.00 dollars a year and spend $75,000.00 dollars a year you’ll pay the difference of $25,000.00 in future income. Here’s the frightening part. Spend twenty-five thousand dollars more than you make for five years and you’re in the hole $125,000.00 dollars.
I mean really, how the hell are you gonna pay it off? Continue financing? Continue borrowing more than you make? Are you nuts?
There are only three possibilities to getting out of debt. Possibility number one, spend less than you make and use the difference to pay off debt. Possibility number two, make more money. Possibility three, sell assets, do garage sales and what-ever-else to generate extra dollars.
Understand that if you owe money you are mortgaging your future for the past, or the present.
David Dassow
Friday, May 2, 2008
Are you mad yet?
Working with a couple on debt reduction recently I finally just had to ask them this question…so being the untactful guy I truly am I just blurted it out…
“Are you mad yet?”
They sort of looked at me puzzled and I repeated the question. “Are you mad yet?”
Well the long and short of it is they were not mad yet.
You’ve heard me refer to this a bunch. You’ve got to get mad about your situation. You’ve got to start saying to yourself “I’m sick and tired of this and I’m not going to take it anymore!”
Until you do this, until you get real mad, you won’t do anything other than give it lip service.
True change begins inside of you. Once the change occurs inside of you your actions will begin to reflect the necessary “behavioral changes” to get you on track.
If you want the strategies to get you debt free, look at previous posts. If you aren’t mad yet, get mad.
The madness is what’ll change you.
David Dassow
“Are you mad yet?”
They sort of looked at me puzzled and I repeated the question. “Are you mad yet?”
Well the long and short of it is they were not mad yet.
You’ve heard me refer to this a bunch. You’ve got to get mad about your situation. You’ve got to start saying to yourself “I’m sick and tired of this and I’m not going to take it anymore!”
Until you do this, until you get real mad, you won’t do anything other than give it lip service.
True change begins inside of you. Once the change occurs inside of you your actions will begin to reflect the necessary “behavioral changes” to get you on track.
If you want the strategies to get you debt free, look at previous posts. If you aren’t mad yet, get mad.
The madness is what’ll change you.
David Dassow
Friday, April 25, 2008
Just because you're paranoid doesn't mean they're not out to get you...
I had a recent comment from a friend I’ve been working with on paying off his debt and gaining his freedom. The amazing thing about it is he actually thinks the credit card folks are out to get him and I think he’s right and here’s why…
Every day I get several offers to get another credit card or sign a note for several thousand dollars so I can have it now.
The Big Bankers are out to get you. They want to trap you into paying them every month for the rest of your life. The Big Bankers are continually calling you, mailing to you, emailing to you, and talking to you always encouraging you to borrow more money.
Borrow for the things you don’t have. Borrow for the things you want. Borrow because you deserve it. Borrow because that’s what everybody does.
Well, my friend is right. They are out to get you. You need to get a healthy dose of paranoia. You need to take that paranoia and get mad, real mad.
And from now on recognize that if you get a correspondence from the Big Bankers they are out to get you.
David Dassow
Every day I get several offers to get another credit card or sign a note for several thousand dollars so I can have it now.
The Big Bankers are out to get you. They want to trap you into paying them every month for the rest of your life. The Big Bankers are continually calling you, mailing to you, emailing to you, and talking to you always encouraging you to borrow more money.
Borrow for the things you don’t have. Borrow for the things you want. Borrow because you deserve it. Borrow because that’s what everybody does.
Well, my friend is right. They are out to get you. You need to get a healthy dose of paranoia. You need to take that paranoia and get mad, real mad.
And from now on recognize that if you get a correspondence from the Big Bankers they are out to get you.
David Dassow
Tuesday, April 22, 2008
They laughed at me when I said I'd be debt free but...
When I showed them the proof they were speechless.
I consult with a lot of folks about owing money about being debt free about living a debt free lifestyle. Not everyone agrees with me. Not everyone understands the stress and worry they have in life because it’s a constant strain to make the minimum payments.
When you’re in debt up to your eyeballs you constantly are begging the Big Fat Cat Bankers to raise your credit limit so you can get food, pay another bill, buy some gas, or get a coffee.
The only reason people laugh at you when you tell them you want to be debt free is because they’re jealous. These folks want you to be miserable like they are. They want you to stay in the same boat they’re in because few make the necessary changes to go from the 80% crowd to the rich 20% folks.
If you ever want to know what to do find folks that have done what you aren’t doing. If you can’t find folks that are doing what you want to do than do the opposite of what everyone else is doing.
You can be debt free. You can have a wonderful financially rich life if you’ll do now what no one else will do so later on you’ll be able to do what no one else will do.
That’s why folks may laugh at you now but won’t later on. Those folks will be asking you what you’ve done that they haven’t
David Dassow
I consult with a lot of folks about owing money about being debt free about living a debt free lifestyle. Not everyone agrees with me. Not everyone understands the stress and worry they have in life because it’s a constant strain to make the minimum payments.
When you’re in debt up to your eyeballs you constantly are begging the Big Fat Cat Bankers to raise your credit limit so you can get food, pay another bill, buy some gas, or get a coffee.
The only reason people laugh at you when you tell them you want to be debt free is because they’re jealous. These folks want you to be miserable like they are. They want you to stay in the same boat they’re in because few make the necessary changes to go from the 80% crowd to the rich 20% folks.
If you ever want to know what to do find folks that have done what you aren’t doing. If you can’t find folks that are doing what you want to do than do the opposite of what everyone else is doing.
You can be debt free. You can have a wonderful financially rich life if you’ll do now what no one else will do so later on you’ll be able to do what no one else will do.
That’s why folks may laugh at you now but won’t later on. Those folks will be asking you what you’ve done that they haven’t
David Dassow
Monday, April 21, 2008
Wealth Destroyer #1
Lack of financial diversification
One of the biggest goals for you when you’re in debt is to figure out what your investments should be.
The number one destroyer of wealth is “Lack of financial diversification” and if you’re still in debt now you are destroying your short and especially long term WEALTH because there is no diversification.
Wealth diversification is taking all of your assets and spreading them. It’s similar to the old saying, “don’t keep all your eggs in one basket.” If you drop the basket you lose all your eggs.
The same goes for your financial wealth. If it’s all in one investment you risk going broke in one shot.
The same goes for debt. If you owe lots and lots of money and have no savings you’re in a WEALTH DESTROYER position. It’s not a good position to be in and I would argue it is even more dangerous than if you had all your money in one investment. If you have all your money in one investment you have a shot of it going up in value.
With debt it will never go up in value it will always cost you money. The longer you wait to pay off your debt and if it’s the only investment you have you’ve got to start and pay it off now.
Use these posts for strategies and encouragement to get it done.
David Dassow
One of the biggest goals for you when you’re in debt is to figure out what your investments should be.
The number one destroyer of wealth is “Lack of financial diversification” and if you’re still in debt now you are destroying your short and especially long term WEALTH because there is no diversification.
Wealth diversification is taking all of your assets and spreading them. It’s similar to the old saying, “don’t keep all your eggs in one basket.” If you drop the basket you lose all your eggs.
The same goes for your financial wealth. If it’s all in one investment you risk going broke in one shot.
The same goes for debt. If you owe lots and lots of money and have no savings you’re in a WEALTH DESTROYER position. It’s not a good position to be in and I would argue it is even more dangerous than if you had all your money in one investment. If you have all your money in one investment you have a shot of it going up in value.
With debt it will never go up in value it will always cost you money. The longer you wait to pay off your debt and if it’s the only investment you have you’ve got to start and pay it off now.
Use these posts for strategies and encouragement to get it done.
David Dassow
Sunday, April 20, 2008
How a cash-flow shortage can ruin your good debt theory
I’ve argued about this notion of good debt verse bad debt and today we’re going to take a look at the murderous CASH FLOW CRUNCH and how it can ruin you over-night!
It doesn’t matter what the so-called “good debt” asset is. It can be a home, property, a business, or merchandise such as art that goes up in value. Whatever it is if you borrow to get the asset a cash-flow crunch can ruin you.
There’s a story in one of Larry Burkett’s books (Larry Burkett, by the way, was a Christian Financial Counselor and big believer in Debt Free Living). He wrote about an individual who had a business in Texas in the 70’s. He had $500,000 in the bank and his Accountant advised him to finance his accounts receivable.
He owed $350,000 in short term debt and way able to pay it because his customers were paying on time and everything was terrific.
In the 1980’s Texas went through a pretty severe recession and our business owner’s bank went out of business. He had $500,000 dollars in the bank but it was only insured for $100,000.
When the Fed’s took over the bank they contacted the business owner to tell him he now had $100,000 in the bank. He had lost $400,000 over night.
That was actually the good news. The bad news was that same bank had the short-term loan of $350,000 and the Fed Guys Called The Loan Due. This meant the business guy had to pay off the $350,000 dollars immediately.
But, he only had $100,000 because that same bank that went under shafted him out of $400,000.
Our business owner had to borrow an additional $250,000 dollars from another bank to make good on the loan. He now had no reserves and no money! The recession caused a 10% decline in his business and our business owner ended up going bankrupt.
The moral of the story and the thing that had made his wife really mad was she kept telling him to pay off all the debt. She could never understand why he had so much debt when he could have run the business completely debt free.
But, our business owner took his advice from the Accountant that told him some debt is good debt and you can write off the interest you pay on the debt and keep more money in the bank.
That strategy of good debt verse bad debt cost our business owner $150,000 and he went bankrupt.
The good dent theory doesn’t work when you have cash flow crunches and ultimately if you could pay off all your debt why wouldn’t you?
To debt free living…
David…
It doesn’t matter what the so-called “good debt” asset is. It can be a home, property, a business, or merchandise such as art that goes up in value. Whatever it is if you borrow to get the asset a cash-flow crunch can ruin you.
There’s a story in one of Larry Burkett’s books (Larry Burkett, by the way, was a Christian Financial Counselor and big believer in Debt Free Living). He wrote about an individual who had a business in Texas in the 70’s. He had $500,000 in the bank and his Accountant advised him to finance his accounts receivable.
He owed $350,000 in short term debt and way able to pay it because his customers were paying on time and everything was terrific.
In the 1980’s Texas went through a pretty severe recession and our business owner’s bank went out of business. He had $500,000 dollars in the bank but it was only insured for $100,000.
When the Fed’s took over the bank they contacted the business owner to tell him he now had $100,000 in the bank. He had lost $400,000 over night.
That was actually the good news. The bad news was that same bank had the short-term loan of $350,000 and the Fed Guys Called The Loan Due. This meant the business guy had to pay off the $350,000 dollars immediately.
But, he only had $100,000 because that same bank that went under shafted him out of $400,000.
Our business owner had to borrow an additional $250,000 dollars from another bank to make good on the loan. He now had no reserves and no money! The recession caused a 10% decline in his business and our business owner ended up going bankrupt.
The moral of the story and the thing that had made his wife really mad was she kept telling him to pay off all the debt. She could never understand why he had so much debt when he could have run the business completely debt free.
But, our business owner took his advice from the Accountant that told him some debt is good debt and you can write off the interest you pay on the debt and keep more money in the bank.
That strategy of good debt verse bad debt cost our business owner $150,000 and he went bankrupt.
The good dent theory doesn’t work when you have cash flow crunches and ultimately if you could pay off all your debt why wouldn’t you?
To debt free living…
David…
Good debt verse bad?
I addressed this once before but am going to address it once more. There’s plenty of articles on the web talking about good debt. Usually these stories tell you that owning your own home is good debt because its an asset that continues to go up.
There are two fallacies in the home argument (full disclosure I still owe money on my home and plan to have it paid off in less than 2 years).
There’s an assumption if you’re renting you’re throwing away money because non of it goes toward the principle of your home like when you have a mortgage.
Here’s the fallacy in the argument. When you take a loan out for a home the loan is amortized over 30 years (there are some loans for 15 years). Without trying to confuse you I’ll give you a simple definition of amortization. If you take a loan out for 30 years each month your payment is figured based on how much money you owe over the entire 30 years.
If you borrow $100,000 for 30 years your first payment (7% interest) is $665.30 ($583.33 interest, $81.97 principle). The following month you’ll owe $99,918.03 principle. You don’t have to be a rocket scientist to figure out you’ll be paying a ton of interest for the first 15 plus years.
By the time you’ve had the loan for 30 years your home (that originally cost $100,000) will cost you $239,508 dollars ($139,508 in interest).
There’s no such thing as good debt verse bad debt. You either owe money or you don’t owe money. It’s a life-style decision. No debt is the easy way of living. Owing debt is a rough way of living.
David…
There are two fallacies in the home argument (full disclosure I still owe money on my home and plan to have it paid off in less than 2 years).
There’s an assumption if you’re renting you’re throwing away money because non of it goes toward the principle of your home like when you have a mortgage.
Here’s the fallacy in the argument. When you take a loan out for a home the loan is amortized over 30 years (there are some loans for 15 years). Without trying to confuse you I’ll give you a simple definition of amortization. If you take a loan out for 30 years each month your payment is figured based on how much money you owe over the entire 30 years.
If you borrow $100,000 for 30 years your first payment (7% interest) is $665.30 ($583.33 interest, $81.97 principle). The following month you’ll owe $99,918.03 principle. You don’t have to be a rocket scientist to figure out you’ll be paying a ton of interest for the first 15 plus years.
By the time you’ve had the loan for 30 years your home (that originally cost $100,000) will cost you $239,508 dollars ($139,508 in interest).
There’s no such thing as good debt verse bad debt. You either owe money or you don’t owe money. It’s a life-style decision. No debt is the easy way of living. Owing debt is a rough way of living.
David…
Consolidating Your Loans is a Disaster!
Try google(ing) debt free sometime and you’ll be amazed at what you see! Between sponsors and the top ten hits you’ll find virtually 100% offering you a way to borrow your self out of debt.
Think about that strategy for a moment. You owe money. If you borrow more money you’ll owe either the same amount or more money than when you started.
How in-the-heck can borrowing money get you out of debt?
That’s the insanity of the “pitch” these guys are throwing at you. They’ve got several ways for you to borrow more money to consolidate your debts. Here’s two secrets to this strategy these guys don’t want you to know.
First, these guys are the bad guys. They’re the Big Bankers! You already owe the Big Bankers money and now they want to loan you more money!
Second, consolidating your debt is a really bad idea for one simple reason. Let’s say you have 10 credit cards with minimum payments ranging from $15 - $250 dollars. Lets further estimate your total monthly minimum payments are $2,200 dollars and its tough making those payments.
If you consolidate you’ll have one payment. Even if you’re able to reduce your overall payments say $200 a month you’ll now have to come up with one payment of $2000 a month instead of 10 smaller payments.
It’s a heck-of-a-lot easier to stagger $2,200 dollars in bills a month than to fork over one big giant payment!
The other problem with consolidating debt is it’s really tough to pay it off early. It’s a lot easier to pay down debt with 10 individual cards using the $15 dollar a day strategy (see previous post for details).
David
Think about that strategy for a moment. You owe money. If you borrow more money you’ll owe either the same amount or more money than when you started.
How in-the-heck can borrowing money get you out of debt?
That’s the insanity of the “pitch” these guys are throwing at you. They’ve got several ways for you to borrow more money to consolidate your debts. Here’s two secrets to this strategy these guys don’t want you to know.
First, these guys are the bad guys. They’re the Big Bankers! You already owe the Big Bankers money and now they want to loan you more money!
Second, consolidating your debt is a really bad idea for one simple reason. Let’s say you have 10 credit cards with minimum payments ranging from $15 - $250 dollars. Lets further estimate your total monthly minimum payments are $2,200 dollars and its tough making those payments.
If you consolidate you’ll have one payment. Even if you’re able to reduce your overall payments say $200 a month you’ll now have to come up with one payment of $2000 a month instead of 10 smaller payments.
It’s a heck-of-a-lot easier to stagger $2,200 dollars in bills a month than to fork over one big giant payment!
The other problem with consolidating debt is it’s really tough to pay it off early. It’s a lot easier to pay down debt with 10 individual cards using the $15 dollar a day strategy (see previous post for details).
David
Friday, April 18, 2008
What's the easiest way to financial freedom?
Two rules of thumb on getting rich in this country.
Rule number one: you cannot borrow your way to being rich. If you borrow money, you owe money and if you owe money you have no money. Money is like a pregnancy. You’re either pregnant or you’re not pregnant.
Rule number two: you must spend LESS than you earn. It doesn’t matter how much money you earn you simply absolutely must SPEND LESS than you earn or you’ll never have financial freedom and you’ll never be rich.
The more money you owe the less money you have NOW. Thinking or waiting until later will only delay you getting rich and may even keep you from getting rich. It’s called the power of compound interest. The longer you save money the more compound interest you make. The longer you borrow money the longer the compound interest YOU PAY.
Better to earn compound interest than pay compound interest.
There’s an easy way to get rich in country, spend less money than you make.
David…
Rule number one: you cannot borrow your way to being rich. If you borrow money, you owe money and if you owe money you have no money. Money is like a pregnancy. You’re either pregnant or you’re not pregnant.
Rule number two: you must spend LESS than you earn. It doesn’t matter how much money you earn you simply absolutely must SPEND LESS than you earn or you’ll never have financial freedom and you’ll never be rich.
The more money you owe the less money you have NOW. Thinking or waiting until later will only delay you getting rich and may even keep you from getting rich. It’s called the power of compound interest. The longer you save money the more compound interest you make. The longer you borrow money the longer the compound interest YOU PAY.
Better to earn compound interest than pay compound interest.
There’s an easy way to get rich in country, spend less money than you make.
David…
Thursday, April 17, 2008
If you don't know where you're going any road will get you there
Being in debt is confusing. Generally we’re unorganized and never truly know how much we owe and always guess lower than the actual number.
An easy way to figure how much debt and what your total monthly payments are is to save a copy of each bill as it comes in and summarize the results on a sheet of paper. It will also help with your pay off strategy.
Remember the $15 dollar a day pay off strategy. Take one of the bills you receive each month and make several copies. Use one copy each time you get a money order with $15 to $75 you accumulate each week.
Your alternative is to continue going down the road to nowhere. If you want to go somewhere choose a strategy, a direction, and head toward debt free living.
If you don’t care where you’re going just keep wondering up and down the streets of confusion never really knowing where you’re going because:
If you don’t know where you’re going any road will get you there…
David…
An easy way to figure how much debt and what your total monthly payments are is to save a copy of each bill as it comes in and summarize the results on a sheet of paper. It will also help with your pay off strategy.
Remember the $15 dollar a day pay off strategy. Take one of the bills you receive each month and make several copies. Use one copy each time you get a money order with $15 to $75 you accumulate each week.
Your alternative is to continue going down the road to nowhere. If you want to go somewhere choose a strategy, a direction, and head toward debt free living.
If you don’t care where you’re going just keep wondering up and down the streets of confusion never really knowing where you’re going because:
If you don’t know where you’re going any road will get you there…
David…
Wednesday, April 16, 2008
Be debt free with an easy $15 dollar a day strategy
I’ve posted this before but thought I’d revisit the strategy with a little different twist.
The optimum strategy to pay off your debt is to add the $15 dollar a day strategy. Each day you save $15 a day by doing without something. Replacing Starbucks with your own fresh brewed coffee is a simple $5 to $15 depending on your multiple daily visits.
Take your $15 dollars get a money order and send it to one of your creditors. Each time you get a bill from you creditor make at least four copies (maybe 20 if you’re very undisciplined) and send in your money order with a copy of the bill.
You can pay off credit cards at a quick pace. You’ll pay off an extra $300 dollars a month and will see your debt decline very quickly. Be sure you pay off the lowest balance first than the next lowest.
It is really important to see results quickly. The faster the results the more encouragement you’ll feel, the better your enthusiasm will be to get the job done quicker.
It takes 7 days to develop a new habit. Get 7 money orders over the course of seven days and you’ll have a brand new habit.
There’s your twist. Attack your debt every single day. It beats the heck-out-of-the old once a month strategy. If you wait four weeks you’ll be worried every day waiting. If you attack the debt daily you’ll feel really good knowing you’ve started to get a handle on your credit.
David…
The optimum strategy to pay off your debt is to add the $15 dollar a day strategy. Each day you save $15 a day by doing without something. Replacing Starbucks with your own fresh brewed coffee is a simple $5 to $15 depending on your multiple daily visits.
Take your $15 dollars get a money order and send it to one of your creditors. Each time you get a bill from you creditor make at least four copies (maybe 20 if you’re very undisciplined) and send in your money order with a copy of the bill.
You can pay off credit cards at a quick pace. You’ll pay off an extra $300 dollars a month and will see your debt decline very quickly. Be sure you pay off the lowest balance first than the next lowest.
It is really important to see results quickly. The faster the results the more encouragement you’ll feel, the better your enthusiasm will be to get the job done quicker.
It takes 7 days to develop a new habit. Get 7 money orders over the course of seven days and you’ll have a brand new habit.
There’s your twist. Attack your debt every single day. It beats the heck-out-of-the old once a month strategy. If you wait four weeks you’ll be worried every day waiting. If you attack the debt daily you’ll feel really good knowing you’ve started to get a handle on your credit.
David…
Tuesday, April 15, 2008
3 Myths About Debt
Three myths about debt.
Myth number one, good debt verse bad debt. This notion is a complete myth because it assumes that some debt is good. The good debt argument generally revolves around borrowing money against assets that gain value.
Assets such as a loan on a home is considered good because the value goes up over time. This myth has been revealed recently because housing prices have taken a beating especially in Phoenix, Arizona.
Some folks have watch their homes reposed because they couldn’t afford the payment and the values have been declining. For most consumers a home is about the only asset that fits this so called “good debt” argument.
Myth number two. Some debt is okay. Why in the heck is some debt ok? The argument is because debt allows you to manage your money better and get some things you wouldn’t normally be able to get (basically you don’t have the money so you borrow it).
Myth number three. The feeling that you are richer by having credit cards. The fact is you are not richer by having credit cards. The average credit card purchase is nearly 30% higher than if you pay cash. That 30% more is in the form of debt.
The secret the big banks don’t want you to know about is the myth that debt is some how good. The big banks don’t want you to understand debt because they make a lot of money in interest off your debt. The big bankers have you locked up with heavy chains because you owe them tons of money.
The real truth of the matter is the big banks have figured out a way to loan you endless money and make you feel good about borrowing that money. The truth is you don’t even realize how bad it is until one day you wake up and smell the coffee. The coffee you smell is the realization that you are about to go under and that old saying, “I owe, I owe, so it’s off to work I go”, is about you.
Become one of the minority 20% of your fellow countrymen and pay off your debt so you can do what no one else will do.
David…
Myth number one, good debt verse bad debt. This notion is a complete myth because it assumes that some debt is good. The good debt argument generally revolves around borrowing money against assets that gain value.
Assets such as a loan on a home is considered good because the value goes up over time. This myth has been revealed recently because housing prices have taken a beating especially in Phoenix, Arizona.
Some folks have watch their homes reposed because they couldn’t afford the payment and the values have been declining. For most consumers a home is about the only asset that fits this so called “good debt” argument.
Myth number two. Some debt is okay. Why in the heck is some debt ok? The argument is because debt allows you to manage your money better and get some things you wouldn’t normally be able to get (basically you don’t have the money so you borrow it).
Myth number three. The feeling that you are richer by having credit cards. The fact is you are not richer by having credit cards. The average credit card purchase is nearly 30% higher than if you pay cash. That 30% more is in the form of debt.
The secret the big banks don’t want you to know about is the myth that debt is some how good. The big banks don’t want you to understand debt because they make a lot of money in interest off your debt. The big bankers have you locked up with heavy chains because you owe them tons of money.
The real truth of the matter is the big banks have figured out a way to loan you endless money and make you feel good about borrowing that money. The truth is you don’t even realize how bad it is until one day you wake up and smell the coffee. The coffee you smell is the realization that you are about to go under and that old saying, “I owe, I owe, so it’s off to work I go”, is about you.
Become one of the minority 20% of your fellow countrymen and pay off your debt so you can do what no one else will do.
David…
Monday, April 14, 2008
Can this marriage be save?
I met with a young fellow this past weekend. He was going through the various credit cards, car payments, and house payment he had and how he was about to go under.
The basic problem we had in our discussion had to do with the CORE of his PROBLEM. I’m qualifying my remarks by saying I used to think this way. I don’t now and hence our problem attempting to communicate.
I’ve bee in debt up to my eardrums 3 times in my life. The second time was the worst. My new friend is in that category. He’s about to go under and can’t see anyway out of it.
I shared with him that if he isn’t honest with his wife he’ll end up divorced. I said, “you’ve gotta tell her the truth of your situation than offer your hope of how you’re going to turn it around.”
Debt is very much like a cancer. You can treat the symptoms but it’s the core you need to address. You’ve got to go after what is causing the cancer. In this case, what is causing the debt problem?
My new friend spent every dollar he had and plenty of dollars he doesn’t have. In an effort to keep from going under he’s bled his 401K at work.
There’s nothing left. He’s broke about to file bankruptcy.
I told my friend that I would be imparting “tough love”. I would share with him a solution to his problem. It would be a permanent solution not some temporary thing by borrowing money to get him out of debt.
You can’t borrow your way out of debt. You’ve got to pay off your debt and go From Debt to Cash. The core of the problem is YOUR propensity to borrow money you don’t have. If you don’t got the money you don’t buy it.
And, you must tell your spouse where you’re at. You’ve got to be honest. You’ve got to tell your spouse. If you don’t tell your spouse she’ll/he’ll figure it out and the next question you’ll be asking is:
Can This Marriage be Saved?
David…
The basic problem we had in our discussion had to do with the CORE of his PROBLEM. I’m qualifying my remarks by saying I used to think this way. I don’t now and hence our problem attempting to communicate.
I’ve bee in debt up to my eardrums 3 times in my life. The second time was the worst. My new friend is in that category. He’s about to go under and can’t see anyway out of it.
I shared with him that if he isn’t honest with his wife he’ll end up divorced. I said, “you’ve gotta tell her the truth of your situation than offer your hope of how you’re going to turn it around.”
Debt is very much like a cancer. You can treat the symptoms but it’s the core you need to address. You’ve got to go after what is causing the cancer. In this case, what is causing the debt problem?
My new friend spent every dollar he had and plenty of dollars he doesn’t have. In an effort to keep from going under he’s bled his 401K at work.
There’s nothing left. He’s broke about to file bankruptcy.
I told my friend that I would be imparting “tough love”. I would share with him a solution to his problem. It would be a permanent solution not some temporary thing by borrowing money to get him out of debt.
You can’t borrow your way out of debt. You’ve got to pay off your debt and go From Debt to Cash. The core of the problem is YOUR propensity to borrow money you don’t have. If you don’t got the money you don’t buy it.
And, you must tell your spouse where you’re at. You’ve got to be honest. You’ve got to tell your spouse. If you don’t tell your spouse she’ll/he’ll figure it out and the next question you’ll be asking is:
Can This Marriage be Saved?
David…
Sunday, April 13, 2008
If you can't pay cash for it
You can’t afford it. It’s that simple. If it means selling your new car for a used car, sell it. If it means selling your new home for an old home, sell it. If it means getting a part-time job or working lots and lots of over-time, do it.
The Debt Free Living philosophy is just that. Debt free living is paying cash for everything. Debt free living is a way of life. Debt free living is what 20% of the population does.
If you can’t control your urges to spend money than starve yourself. Carry cash only, leave the credit cards at home. Every time you use a credit card you’re spending money you don’t have. Every time you use a credit card you’re mortgaging your future just to have it now.
In my kit, From Debt to Cash I put you through the necessary drills to change your attitude; to help in the surgery necessary to change your heart and your thinking from that of an attitude of debt to an attitude of cash.
The necessary ingredients are to get MAD. Get real mad! The madder you get the more motivated you are in making the necessary changes in you life to live free of bondage.
You can do it…just do it.
David…
The Debt Free Living philosophy is just that. Debt free living is paying cash for everything. Debt free living is a way of life. Debt free living is what 20% of the population does.
If you can’t control your urges to spend money than starve yourself. Carry cash only, leave the credit cards at home. Every time you use a credit card you’re spending money you don’t have. Every time you use a credit card you’re mortgaging your future just to have it now.
In my kit, From Debt to Cash I put you through the necessary drills to change your attitude; to help in the surgery necessary to change your heart and your thinking from that of an attitude of debt to an attitude of cash.
The necessary ingredients are to get MAD. Get real mad! The madder you get the more motivated you are in making the necessary changes in you life to live free of bondage.
You can do it…just do it.
David…
Do you have a virus?
Living in a world of debt is like a virus on a computer. Recently I had to take my computer into the shop because of a virus. The virus caused my computer to have endless pop-ups in my browser.
After a day of surgery they fixed part of my problem. The computer geek told me they solved the pop-up problem but not the core of the problem.
He described it as a cancer. He cut out the infected parts but could not find the core of the problem. The core of the problem is an infection that will reactivate the pop-ups. He than gave me the special pop-up destroyer software that I needed to run at least once per day.
He told me the software is like cold-medicine that treats the symptoms but doesn’t cure the problem.
When I asked what would cure the problem he said we’d have to reboot the entire system and reinstall everything. More or less we’d have to have major surgery to get to the heart of the matter.
Debt free living is like that. It requires a complete “heart of the matter” surgery to change the way you think. You need to reboot and reinstall the software to get to the heart of the matter.
By the way, I kept running my clean-up software for several months before I had the computer geek redo my computer from scratch.
Living with debt is like having a virus in your system. You can treat the symptoms or you can have surgery done to start over.
When you treat debt like there’s good and bad debt you risk being taken over by boat loads of debt and going under. It’s like being pregnant. You’re either pregnant or you’re not pregnant. You can’t be half-way-pregnant.
Just like you can’t be in partial debt; you’re either in debt or you’re not in debt. There is no in between.
David….
After a day of surgery they fixed part of my problem. The computer geek told me they solved the pop-up problem but not the core of the problem.
He described it as a cancer. He cut out the infected parts but could not find the core of the problem. The core of the problem is an infection that will reactivate the pop-ups. He than gave me the special pop-up destroyer software that I needed to run at least once per day.
He told me the software is like cold-medicine that treats the symptoms but doesn’t cure the problem.
When I asked what would cure the problem he said we’d have to reboot the entire system and reinstall everything. More or less we’d have to have major surgery to get to the heart of the matter.
Debt free living is like that. It requires a complete “heart of the matter” surgery to change the way you think. You need to reboot and reinstall the software to get to the heart of the matter.
By the way, I kept running my clean-up software for several months before I had the computer geek redo my computer from scratch.
Living with debt is like having a virus in your system. You can treat the symptoms or you can have surgery done to start over.
When you treat debt like there’s good and bad debt you risk being taken over by boat loads of debt and going under. It’s like being pregnant. You’re either pregnant or you’re not pregnant. You can’t be half-way-pregnant.
Just like you can’t be in partial debt; you’re either in debt or you’re not in debt. There is no in between.
David….
How a list can save you...
I don’t know about you but I tend to remember to do stuff at the most awkward times. Usually, I’m in the shower, wake up in the middle of the night, in rush hour traffic with no pen or paper, waiting in a line at the grocery store, you get the point.
It took me months to get good at listing my “TO DO’s”. Finally, I got it right and here’s a tip for you to keep up with the stuff you know you gotta do but don’t ever write it down schedule it on your daytimer or other methods you might or might not use.
I’ve found that if I can get one to three things done each and every day I stay current and literally the list “SAVES MY LIFE”. I use that term figuratively but you get the point.
Here’s how I do it. I’ve got a small medal ringed binder with maybe 60 pages that I can tear out each page from the perforation near the medal ring.
Each day I add or cross out my “to do” items.
It’s that simple. BUT, the only caveat is you gotta write down the stuff you gotta do. You don’t need great detail, just a simple one or two words to remind you of what you need to do.
This applies to bills, to work, to personal chores, to anything you’ve gotta do. Carry the notebook with you everywhere. It’ll work even better than those schedulers. Now, I know what you techies are thinking.
Why not put it on my palm device? Well, if it works do it. Paper and pen still work…even in a high-tech world. But whatever works for you do it.
Either way go to the list concept, it’ll save your life.
David…
It took me months to get good at listing my “TO DO’s”. Finally, I got it right and here’s a tip for you to keep up with the stuff you know you gotta do but don’t ever write it down schedule it on your daytimer or other methods you might or might not use.
I’ve found that if I can get one to three things done each and every day I stay current and literally the list “SAVES MY LIFE”. I use that term figuratively but you get the point.
Here’s how I do it. I’ve got a small medal ringed binder with maybe 60 pages that I can tear out each page from the perforation near the medal ring.
Each day I add or cross out my “to do” items.
It’s that simple. BUT, the only caveat is you gotta write down the stuff you gotta do. You don’t need great detail, just a simple one or two words to remind you of what you need to do.
This applies to bills, to work, to personal chores, to anything you’ve gotta do. Carry the notebook with you everywhere. It’ll work even better than those schedulers. Now, I know what you techies are thinking.
Why not put it on my palm device? Well, if it works do it. Paper and pen still work…even in a high-tech world. But whatever works for you do it.
Either way go to the list concept, it’ll save your life.
David…
Friday, April 11, 2008
Personal Finance Fortress
A road map to personal independence
1. Zero debt
2. Sufficient income from investments to meet your needs without having to work
3. A portion of your savings in untouchable conservative safe investments
4. Insurance in place to protect assets (catastrophe insurance)
5. At least 50% of your time freed from mundane tasks (outsource everything except the checkbook)
6. Ability to make income other than a 9 – 5 job or hourly wage
7. Avoid any and all activities or associations that put you and your personal financial fortress at risk (don’t hang out with losers)
David…
1. Zero debt
2. Sufficient income from investments to meet your needs without having to work
3. A portion of your savings in untouchable conservative safe investments
4. Insurance in place to protect assets (catastrophe insurance)
5. At least 50% of your time freed from mundane tasks (outsource everything except the checkbook)
6. Ability to make income other than a 9 – 5 job or hourly wage
7. Avoid any and all activities or associations that put you and your personal financial fortress at risk (don’t hang out with losers)
David…
Thursday, April 10, 2008
Debt is evil because:
Debt is evil because:
1. The power of compound interest is used against you
2. Every dollar you bring in is needed to contribute to servicing your debt
3. It is a habit forming. It’s too easy to get good at juggling bills. It gets in the way of your “success” skills
4. It forces or encourages you to do things you wouldn’t normally do
5. It provides stress, worry, and frustration
6. It makes you vulnerable to money crunches (severe cash shortages)
7. There’s no such thing as good debt. Any debt can put you under or worse yet, bankrupt
David…
1. The power of compound interest is used against you
2. Every dollar you bring in is needed to contribute to servicing your debt
3. It is a habit forming. It’s too easy to get good at juggling bills. It gets in the way of your “success” skills
4. It forces or encourages you to do things you wouldn’t normally do
5. It provides stress, worry, and frustration
6. It makes you vulnerable to money crunches (severe cash shortages)
7. There’s no such thing as good debt. Any debt can put you under or worse yet, bankrupt
David…
Wednesday, April 9, 2008
A debt killer you should know about
Most of us have been taught that you just can get ahead without borrowing. We are continually inundated with advertisers telling us we can have it right now just use your credit card.
This has also added to our impatient attitudes. We want it right now!
Always remember and never forget. It is not how much money you make that counts, it’s how much you keep.
Some people believe there is good debt and bad debt. Good debt is something you can sell at any time and repay the debt and maybe even make a profit. Bad debt, of course, is all the other types of debt especially credit cards.
The big myth about good debt is the notion that you break even or make money on the sale of the asset your debt is secured from. But, if you’re making payments you need to add those payments into the mix. When you do you’ll almost invariably find that almost every kind of debt imaginable is really and truly BAD debt.
Debt kills you. It saddles you down. It forces you to make a certain amount of money every day just to get by.
What folks won’t tell you about there so called good debt is if you can’t make a payment you’ll lose that asset of yours and be forced to pay off your debt even if the sale doesn’t cover the money you owe.
Debt can kill you. Use the philosophy of staying out of debt and living a stress-free life.
David…
This has also added to our impatient attitudes. We want it right now!
Always remember and never forget. It is not how much money you make that counts, it’s how much you keep.
Some people believe there is good debt and bad debt. Good debt is something you can sell at any time and repay the debt and maybe even make a profit. Bad debt, of course, is all the other types of debt especially credit cards.
The big myth about good debt is the notion that you break even or make money on the sale of the asset your debt is secured from. But, if you’re making payments you need to add those payments into the mix. When you do you’ll almost invariably find that almost every kind of debt imaginable is really and truly BAD debt.
Debt kills you. It saddles you down. It forces you to make a certain amount of money every day just to get by.
What folks won’t tell you about there so called good debt is if you can’t make a payment you’ll lose that asset of yours and be forced to pay off your debt even if the sale doesn’t cover the money you owe.
Debt can kill you. Use the philosophy of staying out of debt and living a stress-free life.
David…
Tuesday, April 8, 2008
Tax refunds...How to get less back and save more now
My friend’s been bragging to me about how much he’s getting from the government. He’s also pretty excited about the Government Stimulus Package that’ll get him another $600 bucks.
One of the greatest gifts you can give yourself is a debt free lifestyle. I told my friend about my strategy for tax returns and how you should get zero back and save more during the year.
Here’s how it works. Saving money and living debt free is a life-style choice. To begin your life-style choice requires discipline and changing habits. Check out my 7 day strategy to changing a habit.
My friend figured he’d be getting $1,000 dollars refund. First, don’t forget, it’s your money you’re getting back. It isn’t the government’s money it is your money! They had free use of your money for the entire year interest free and you have to fill out papers (better fill them out accurately) and get to wait a few weeks plus to get your money back.
All you have to do is make an adjustment to your deductions for the amount either weekly, bi-weekly, or monthly depending on how you’re paid. If you’re paid monthly you’d make an adjustment of $83.33 (I’d round it up to $100 per month). If you have direct deposit you can have that portion sent to a savings account for you and you’ll have not only $1,000 plus in a year but also a reserve fund and some interest to boot.
It’s a simple way to save money and you can change your tax habit of loaning money to the government and keep it for your self.
Now, for the $600 stimulus package. It’s free found money and it’s yours and the government decided to give it back to you. Take the money and place it in the account you’ve formed for you new tax strategy and by the end of the year you’ll have more than $1,600 saved.
Unfortunately, my friend isn’t saving his money. Yes, he agreed to spend a portion on his credit card bills but wants to spend the rest on a weekend trip.
Like I said before it is a life-style choice. You can deprive yourself of this new found money so you can enjoy yourself more later or you can blow it now like the majority 80% percent who does everything with a herd mentality.
I prefer to be in the 20% percent crowd that has less stress now and more money later on.
David…
One of the greatest gifts you can give yourself is a debt free lifestyle. I told my friend about my strategy for tax returns and how you should get zero back and save more during the year.
Here’s how it works. Saving money and living debt free is a life-style choice. To begin your life-style choice requires discipline and changing habits. Check out my 7 day strategy to changing a habit.
My friend figured he’d be getting $1,000 dollars refund. First, don’t forget, it’s your money you’re getting back. It isn’t the government’s money it is your money! They had free use of your money for the entire year interest free and you have to fill out papers (better fill them out accurately) and get to wait a few weeks plus to get your money back.
All you have to do is make an adjustment to your deductions for the amount either weekly, bi-weekly, or monthly depending on how you’re paid. If you’re paid monthly you’d make an adjustment of $83.33 (I’d round it up to $100 per month). If you have direct deposit you can have that portion sent to a savings account for you and you’ll have not only $1,000 plus in a year but also a reserve fund and some interest to boot.
It’s a simple way to save money and you can change your tax habit of loaning money to the government and keep it for your self.
Now, for the $600 stimulus package. It’s free found money and it’s yours and the government decided to give it back to you. Take the money and place it in the account you’ve formed for you new tax strategy and by the end of the year you’ll have more than $1,600 saved.
Unfortunately, my friend isn’t saving his money. Yes, he agreed to spend a portion on his credit card bills but wants to spend the rest on a weekend trip.
Like I said before it is a life-style choice. You can deprive yourself of this new found money so you can enjoy yourself more later or you can blow it now like the majority 80% percent who does everything with a herd mentality.
I prefer to be in the 20% percent crowd that has less stress now and more money later on.
David…
Sunday, April 6, 2008
You've paid off your debt, now what?
Once you’ve paid off your debt, now what? Establish a reserve fund immediately. If you’ve gone this long without a reserve you need one just in case. Life tends to happen and emergencies go with life. Use the $15 dollar a day strategy.
One of the interesting things about being in the pay-off-all-your-debt-mode-of-thinking is once it’s paid off it is difficult to change channels. Yeah, sure, you feel tons better and the monkey is now off you.
But it is difficult to go into the next mindset. The mindset that is in between the paying off and the saving mindset strategies is what I call no-man-land. Once you’ve paid off your debts you’re so used to paying cash for everything you can get stuck in the wrong mindset.
Once your debts are paid off you’ll discover you’re running a heck-of-a surplus. It’s time to make a strategy change. You’ll need 3 accounts not counting your reserve fund. One account is short term, one is medium term and the other long term.
The next step is to get your goals in order. Short term saving is under 5 years, medium term saving is under 15 years and long term is 20 plus years (most view it as retirement).
The idea is to match the amount of time you save to the item you want, need, or must have, such as cars, clothes, etcetera.
Whatever you do the day you’ve paid off all your debt immediately start saving even if you have to use those same strategies that got you out of debt to get you into saving.
David…
One of the interesting things about being in the pay-off-all-your-debt-mode-of-thinking is once it’s paid off it is difficult to change channels. Yeah, sure, you feel tons better and the monkey is now off you.
But it is difficult to go into the next mindset. The mindset that is in between the paying off and the saving mindset strategies is what I call no-man-land. Once you’ve paid off your debts you’re so used to paying cash for everything you can get stuck in the wrong mindset.
Once your debts are paid off you’ll discover you’re running a heck-of-a surplus. It’s time to make a strategy change. You’ll need 3 accounts not counting your reserve fund. One account is short term, one is medium term and the other long term.
The next step is to get your goals in order. Short term saving is under 5 years, medium term saving is under 15 years and long term is 20 plus years (most view it as retirement).
The idea is to match the amount of time you save to the item you want, need, or must have, such as cars, clothes, etcetera.
Whatever you do the day you’ve paid off all your debt immediately start saving even if you have to use those same strategies that got you out of debt to get you into saving.
David…
Friday, April 4, 2008
Have you ever noticed how you feel like a broken record?
If you have kids you’ll understand this quicker then if you don’t have kids. Depending on how many kids you’ve got you’ve probably repeated yourself so much you feeling like a broken record.
The reason you have to repeat instructions to your kids over and over again is because they forget, don’t listen, and it doesn’t always sink in even if you repeat yourself 25 times.
The reasons you’ve got to repeat yourself is your kids are learning. The best way any of us learn is through repetition. The more something is repeated the more likely it is to sink into our enormously thick skulls.
You’re familiar with that thick bone that surrounds your brain matter? The thick bone surrounds your brain to protect it. It also helps keep things out of your brain. Things like common sense, words that go through your ear canal and seem to go through to the other side and out the other ear.
Repetition is the secret to learning.
Repetition is what you need to DO and to HEAR to learn and change habits and develop new behaviors.
In my kit, From Debt to Cash, I talk about the psychology of debt and why we’ve been indoctrinated into borrowing money. I also talk about how to change your attitude of borrowing and turn it into CASH.
Cash living eliminates 85.9% of your stress. Once you’re debt free there’s an immediate peace of mind feeling that comes over you. While you’re working on getting debt free there’s a sense of anticipation and it gives you something to look forward too.
But, simple living means little or no stress. Having cash in the bank means a sense of wellbeing that is difficult to describe but wonderful to feel.
So, yes, I feel like a broken record sometimes repeating DEBT FREE LIVING over and over again. You probably feel like a broken record sometimes repeating things to your kids over and over again.
It’s good for the kids to hear and its good for you to hear. Now, break the record and go get debt free!
The reason you have to repeat instructions to your kids over and over again is because they forget, don’t listen, and it doesn’t always sink in even if you repeat yourself 25 times.
The reasons you’ve got to repeat yourself is your kids are learning. The best way any of us learn is through repetition. The more something is repeated the more likely it is to sink into our enormously thick skulls.
You’re familiar with that thick bone that surrounds your brain matter? The thick bone surrounds your brain to protect it. It also helps keep things out of your brain. Things like common sense, words that go through your ear canal and seem to go through to the other side and out the other ear.
Repetition is the secret to learning.
Repetition is what you need to DO and to HEAR to learn and change habits and develop new behaviors.
In my kit, From Debt to Cash, I talk about the psychology of debt and why we’ve been indoctrinated into borrowing money. I also talk about how to change your attitude of borrowing and turn it into CASH.
Cash living eliminates 85.9% of your stress. Once you’re debt free there’s an immediate peace of mind feeling that comes over you. While you’re working on getting debt free there’s a sense of anticipation and it gives you something to look forward too.
But, simple living means little or no stress. Having cash in the bank means a sense of wellbeing that is difficult to describe but wonderful to feel.
So, yes, I feel like a broken record sometimes repeating DEBT FREE LIVING over and over again. You probably feel like a broken record sometimes repeating things to your kids over and over again.
It’s good for the kids to hear and its good for you to hear. Now, break the record and go get debt free!
Thursday, April 3, 2008
When to save money?
Saving money is pretty tough, there’s no bones about it. As you pay off your debts you’ll begin to think about saving money. For me, it was tougher to save money than to pay off the creditors.
I got so use to spending all my money minus my reserve fund that it was weird to have a little extra money and I did without for so long my mind was confused.
There are three mindsets you go through when you finally decide to get out of the hole your in and get out of debt.
The first mindset is the “get out of debt mindset”. The second mindset is “debt free” living. During my debt free mindset a host of unexpected bills came up. The good news is I was able to pay those bills (staggered most of them) and didn’t start saving for awhile.
The third mindset is the most difficult to accomplish. The mindset of “Saving”. I don’t have the answer, yet, to motivating you to save.
I can tell you that once you hit a few set-points it will motivate you to go further. Your set-point may be $5,000 thousand dollars in the bank. As soon as you hit that number it will spur something deep inside and launch you into the third mindset of saving.
The question is when should you start saving?
You should start saving the day you’ve paid off all your bills. The reason is simple. You’ll be in the habit of cutting checks to creditors. Now you can cut checks to yourself. I’ve heard of some folks using my $15 dollar a day strategy to save money.
I say whatever you do to save, keep doing it. But, don’t start saving until you’ve paid off your debts.
David…
I got so use to spending all my money minus my reserve fund that it was weird to have a little extra money and I did without for so long my mind was confused.
There are three mindsets you go through when you finally decide to get out of the hole your in and get out of debt.
The first mindset is the “get out of debt mindset”. The second mindset is “debt free” living. During my debt free mindset a host of unexpected bills came up. The good news is I was able to pay those bills (staggered most of them) and didn’t start saving for awhile.
The third mindset is the most difficult to accomplish. The mindset of “Saving”. I don’t have the answer, yet, to motivating you to save.
I can tell you that once you hit a few set-points it will motivate you to go further. Your set-point may be $5,000 thousand dollars in the bank. As soon as you hit that number it will spur something deep inside and launch you into the third mindset of saving.
The question is when should you start saving?
You should start saving the day you’ve paid off all your bills. The reason is simple. You’ll be in the habit of cutting checks to creditors. Now you can cut checks to yourself. I’ve heard of some folks using my $15 dollar a day strategy to save money.
I say whatever you do to save, keep doing it. But, don’t start saving until you’ve paid off your debts.
David…
Wednesday, April 2, 2008
We never deny ourselves anything
A friend recently told me about money woes and just got back from a week vacation. When I asked what they were going to do the reply was, “I don’t know, we never deny ourselves anything.”
It reminded me of a quote I posted recently. “Who recalls when folks got along without something if it cost too much?” --Kin Hubbard
One of the best ways to go through life is to pay as you go. If you got the money you pay the money. If you don’t got the money you don’t buy it.
I think we become entrapped and snared by debt and don’t realize the money we owe is what’s bothering us. The more money you owe the more pressure on you to make those monthly payments.
If you don’t owe money the pressure’s lifted like a release valve on a steam engine.
Debt is like a pressure cooker. A pressure cooker is a large pot that has a top on it that clamps down tight with a pressure gauge on top. As the heat rises (my debt analogy) the pressure inside the pot rises and the gauge goes up.
A pressure cooker is fine for cooking but bad for YOU. The “never deny myself” mentality gets you into more trouble not just from the pressure of being in debt but also stress associated with it all.
Maybe you need to keep up with your neighbors, maybe you think you deserve something, or maybe you just can’t control yourself.
Whatever it is stop. Put yourself on a debt diet so you won’t find yourself…
“Today there are three kinds of people: the have’s, the have not’s, and the have-not-paid-for-what-they-have’s.” --Earl Wilson
David…
It reminded me of a quote I posted recently. “Who recalls when folks got along without something if it cost too much?” --Kin Hubbard
One of the best ways to go through life is to pay as you go. If you got the money you pay the money. If you don’t got the money you don’t buy it.
I think we become entrapped and snared by debt and don’t realize the money we owe is what’s bothering us. The more money you owe the more pressure on you to make those monthly payments.
If you don’t owe money the pressure’s lifted like a release valve on a steam engine.
Debt is like a pressure cooker. A pressure cooker is a large pot that has a top on it that clamps down tight with a pressure gauge on top. As the heat rises (my debt analogy) the pressure inside the pot rises and the gauge goes up.
A pressure cooker is fine for cooking but bad for YOU. The “never deny myself” mentality gets you into more trouble not just from the pressure of being in debt but also stress associated with it all.
Maybe you need to keep up with your neighbors, maybe you think you deserve something, or maybe you just can’t control yourself.
Whatever it is stop. Put yourself on a debt diet so you won’t find yourself…
“Today there are three kinds of people: the have’s, the have not’s, and the have-not-paid-for-what-they-have’s.” --Earl Wilson
David…
Debt Quotes...
“He looks the whole world in the face for he owes not any man.” --Henry Wadsworth Longfellow
“The only man who sticks closer to you in adversity than a friend is a creditor.” --Author Unknown
“Who Goeth a borrowing Goeth a sorrowing.” --Thomas Tusser
“Before borrowing money from a friend, decide which you need most.” --American Proverb
“Wouldst thou shut up the avenues of ill, Pay every debt as if God wrote the bill.” --Ralph Waldo Emerson
“In God we trust; all others must pay cash.” --American Saying
“Creditors have better memories than debtors.” --Benjamin Franklin
“Another way to solve the traffic problems of this country is to pass a law that only paid-for cars be allowed to use the highways.” --Will Rogers
“Debt is the worst poverty.” --Thomas Fuller
“There are plenty of ways to get ahead. The first is so basic I’m almost embarrassed to say it: spend less than you earn.” --Paul Clitheroe
“No man’s credit is as good as his money.” --E.W. Howe
“Who recalls when folks got along without something if it cost too much?” --Kin Hubbard
“Today, there are three kinds of people: the have’s, the have-not’s, and the have-not-paid-for-what-they-have’s.” --Earl Wilson
“Christmas is the season when you buy this year’s gifts with next year’s money.” --Author Unknown.
“When a man is in love or in debt, someone else has the advantage.” --Bill Balance
“Credit buying is much like being drunk. The buzz happens immediately and give you a lift…The hangover comes the day after.” --Joyce Brothers
“Of, for the good old days when people would stop Christmas shopping when they ran out of money.” --Author Unknown.
“The only way to be generous is to be debt free.” --David Dassow
David…
“The only man who sticks closer to you in adversity than a friend is a creditor.” --Author Unknown
“Who Goeth a borrowing Goeth a sorrowing.” --Thomas Tusser
“Before borrowing money from a friend, decide which you need most.” --American Proverb
“Wouldst thou shut up the avenues of ill, Pay every debt as if God wrote the bill.” --Ralph Waldo Emerson
“In God we trust; all others must pay cash.” --American Saying
“Creditors have better memories than debtors.” --Benjamin Franklin
“Another way to solve the traffic problems of this country is to pass a law that only paid-for cars be allowed to use the highways.” --Will Rogers
“Debt is the worst poverty.” --Thomas Fuller
“There are plenty of ways to get ahead. The first is so basic I’m almost embarrassed to say it: spend less than you earn.” --Paul Clitheroe
“No man’s credit is as good as his money.” --E.W. Howe
“Who recalls when folks got along without something if it cost too much?” --Kin Hubbard
“Today, there are three kinds of people: the have’s, the have-not’s, and the have-not-paid-for-what-they-have’s.” --Earl Wilson
“Christmas is the season when you buy this year’s gifts with next year’s money.” --Author Unknown.
“When a man is in love or in debt, someone else has the advantage.” --Bill Balance
“Credit buying is much like being drunk. The buzz happens immediately and give you a lift…The hangover comes the day after.” --Joyce Brothers
“Of, for the good old days when people would stop Christmas shopping when they ran out of money.” --Author Unknown.
“The only way to be generous is to be debt free.” --David Dassow
David…
Tuesday, April 1, 2008
7 days to a new habit
Ready to get into a new habit? Ready to start down the wonderful road to debt free living? Paying off debt is as easy as the 7 day challenge.
Take the $15 dollar a day strategy and apply it for 7 days and you’ll establish a new habit. And as you establish your new habit you’ll pay off all your debt and be on the road to financial wealth.
Once you’ve spent that short little time on your new habit you’ll find yourself more and more excited as the days go by and you see your debt declining.
Take the challenge and do it for 7 days. It only takes 7 to form a new habit.
David…
Take the $15 dollar a day strategy and apply it for 7 days and you’ll establish a new habit. And as you establish your new habit you’ll pay off all your debt and be on the road to financial wealth.
Once you’ve spent that short little time on your new habit you’ll find yourself more and more excited as the days go by and you see your debt declining.
Take the challenge and do it for 7 days. It only takes 7 to form a new habit.
David…
Take the plunge and feel happier ever-after
Today’s post is a wake-up call to all of you who have not begun the great fight and it is a fight. The day you make the commitment and begin to pay off your debt will turn into the happiest day of your life.
I hear from quite a few folks who can’t get started or are afraid of change or worried what will happen if they don’t continue down the road to financial ruin.
It may seem scary to make a change but if you don’t make a change you’ll find yourself not only in bankruptcy. You’ll also find your friends and family avoiding you like the plague.
I’ve outlined a few strategies on these posts to get you started (and also many more in my kit, From Debt to Cash). You and only you can institute the change. I’ve even spoken about how mad you need to get about your present situation.
The madder you get the more likely you are to make a change in your life. If you’re not mad, if you’re not disturbed by your predicament it’s kind of like having a heart attack. If you have a heart attack and survived the Doctor would give you a set of instructions on what to eat, how, and when.
If you’ll take the Doctor’s advice you’ll live a nice healthy life, if you don’t you’ll severally shorten your life.
That’s what debt does to us. Debt gives us a short term sense of a great feeling but when we can’t borrow any more debt turns ugly. It’s like have withdrawals from drugs.
And the reason debt is like a drug is because it makes you feel so good. It’s really cool to borrow money and purchase things you cannot afford to purchase. Until you have to pay the bill at the end of the month.
When you cannot pay the bill your friendly creditor won’t be so friendly anymore. Your friendly creditor will start hassling you and hounding you for money. You see, the Big Bankers want all of your money. When the bankers can’t get your money they get a little upset.
That’s why I recommend you take the plunge today. Start today and get out of debt today. Before you know it you’ll be able to do what most people can’t do because you’ve done what most people won’t do.
Live like the 20% crowd you’ll live longer, healthier, and happier. Take the plunge and feel happier ever after…
David…
I hear from quite a few folks who can’t get started or are afraid of change or worried what will happen if they don’t continue down the road to financial ruin.
It may seem scary to make a change but if you don’t make a change you’ll find yourself not only in bankruptcy. You’ll also find your friends and family avoiding you like the plague.
I’ve outlined a few strategies on these posts to get you started (and also many more in my kit, From Debt to Cash). You and only you can institute the change. I’ve even spoken about how mad you need to get about your present situation.
The madder you get the more likely you are to make a change in your life. If you’re not mad, if you’re not disturbed by your predicament it’s kind of like having a heart attack. If you have a heart attack and survived the Doctor would give you a set of instructions on what to eat, how, and when.
If you’ll take the Doctor’s advice you’ll live a nice healthy life, if you don’t you’ll severally shorten your life.
That’s what debt does to us. Debt gives us a short term sense of a great feeling but when we can’t borrow any more debt turns ugly. It’s like have withdrawals from drugs.
And the reason debt is like a drug is because it makes you feel so good. It’s really cool to borrow money and purchase things you cannot afford to purchase. Until you have to pay the bill at the end of the month.
When you cannot pay the bill your friendly creditor won’t be so friendly anymore. Your friendly creditor will start hassling you and hounding you for money. You see, the Big Bankers want all of your money. When the bankers can’t get your money they get a little upset.
That’s why I recommend you take the plunge today. Start today and get out of debt today. Before you know it you’ll be able to do what most people can’t do because you’ve done what most people won’t do.
Live like the 20% crowd you’ll live longer, healthier, and happier. Take the plunge and feel happier ever after…
David…
Sunday, March 30, 2008
A tip if you're a spender
For all the spenders out there I’ve got a simple tip that will drastically reduce, maybe even eliminate, spending.
There’s two kinds of people, those that spend little and those that spend lots.
Did you know Elton John has filed for bankruptcy? Here’s a guy who makes tons of money but spends more than he makes.
M.C. Hammer made a pile of dough and filed for bankruptcy protection.
Earlier posts I mentioned the “mindset” change you need to make and various ways for you to change behavior.
We all have habits. A good friend of mine (who’s an alcoholic) once told me that when he went to rehab it did wonders to drying him out but didn’t do anything for his “behavior” problem.
In order for my friend to successful give up drinking he had to change his behavior. Here’s the tip of the day for you.
If you are a spender you have certain habits. All you have to do is recognize those habits and you can naturally and easily change.
Maybe it means you leave the debit card and all of your credit cards at the house and carry $2 dollars on you for an emergency.
My alcoholic friend told me he had to change the way he drove to and from work because he had several places he would stop to get alcohol. When he changed his driving pattern it would help him change his behavior.
I’m not going to tell you that it’s as simple as I just described but I will tell you that for many of you it is this simple.
Change your habits by not carrying any money (which by the way, my friend didn’t carry any money, just his cell phone for emergencies)
Recognize your habit, change direction, and starve yourself (don’t carry any money) and within 7 days you’ll have made a major “mindset” change and go along way toward living debt free.
David…
P.S. At the end of the 7 days repeat the process and you’ll eliminate spending money until you’ve paid off your debts.
And debt free living is a great habit to get into…
There’s two kinds of people, those that spend little and those that spend lots.
Did you know Elton John has filed for bankruptcy? Here’s a guy who makes tons of money but spends more than he makes.
M.C. Hammer made a pile of dough and filed for bankruptcy protection.
Earlier posts I mentioned the “mindset” change you need to make and various ways for you to change behavior.
We all have habits. A good friend of mine (who’s an alcoholic) once told me that when he went to rehab it did wonders to drying him out but didn’t do anything for his “behavior” problem.
In order for my friend to successful give up drinking he had to change his behavior. Here’s the tip of the day for you.
If you are a spender you have certain habits. All you have to do is recognize those habits and you can naturally and easily change.
Maybe it means you leave the debit card and all of your credit cards at the house and carry $2 dollars on you for an emergency.
My alcoholic friend told me he had to change the way he drove to and from work because he had several places he would stop to get alcohol. When he changed his driving pattern it would help him change his behavior.
I’m not going to tell you that it’s as simple as I just described but I will tell you that for many of you it is this simple.
Change your habits by not carrying any money (which by the way, my friend didn’t carry any money, just his cell phone for emergencies)
Recognize your habit, change direction, and starve yourself (don’t carry any money) and within 7 days you’ll have made a major “mindset” change and go along way toward living debt free.
David…
P.S. At the end of the 7 days repeat the process and you’ll eliminate spending money until you’ve paid off your debts.
And debt free living is a great habit to get into…
Friday, March 28, 2008
The psychology of debt
There’s a psychology to debt you must understand to make a change in your life. We’ve been bombarded with the notion of debt and we have responded collecting credit cards by the dozen.
The more you use credit cards the more likely you are to spend more money than you have. The psychology of debt changes you from cash and makes you into a debt-aholic.
J.C. Penny, the founder, didn’t take credit cards or any kind of credit for years. He believed that you should “owe no one” and wouldn’t allow debt for any purchase at his store.
The inventor of the first bank issued credit card was John Biggins of the Flatbush National Bank of Brooklyn in New York, in 1946. In 1950 Diners Club issued their credit card in the US and was intended to pay restaurant bills.
By the 1960s more companies offered credit cards. In the mid 1970s the US Congress began regulating the credit card company. In the late 1990s the Supreme Court lifted restrictions on late payments. Deregulation also allowed very high interest rates to be charged.
As consumers began to accept borrowing into every facet of our lives it began a cycle of debt we haven’t recovered from. It’s interesting that Sears and Ford Motor Company tried to prevent sales on credit. They felt it was better to purchase using cash.
Eventually debt was accepted as a way of life and that is the psychology we live in today.
Next time we’ll talk about breaking the psychology of debt and going from
DEBT to CASH
David…
The more you use credit cards the more likely you are to spend more money than you have. The psychology of debt changes you from cash and makes you into a debt-aholic.
J.C. Penny, the founder, didn’t take credit cards or any kind of credit for years. He believed that you should “owe no one” and wouldn’t allow debt for any purchase at his store.
The inventor of the first bank issued credit card was John Biggins of the Flatbush National Bank of Brooklyn in New York, in 1946. In 1950 Diners Club issued their credit card in the US and was intended to pay restaurant bills.
By the 1960s more companies offered credit cards. In the mid 1970s the US Congress began regulating the credit card company. In the late 1990s the Supreme Court lifted restrictions on late payments. Deregulation also allowed very high interest rates to be charged.
As consumers began to accept borrowing into every facet of our lives it began a cycle of debt we haven’t recovered from. It’s interesting that Sears and Ford Motor Company tried to prevent sales on credit. They felt it was better to purchase using cash.
Eventually debt was accepted as a way of life and that is the psychology we live in today.
Next time we’ll talk about breaking the psychology of debt and going from
DEBT to CASH
David…
WARNING: Avoid debt counselors like the flu
We haven’t spoken much about debt counseling and a few Big Banks out there who try to suck you into debt consolidation by either one unsecured loan or using your home through a refinance or second mortgage.
My advice is to start running (AWAY) from these guys.
I know what you’re thinking. These guys are offering you an easy solution to the problem of to much debt. They say that all your problems will be wiped away in one shot! Many times they’ll offer to lower your overall interest rate and sometimes be able to deduct your interest from federal taxes.
Here’s why they are full of it and you could go bankrupt listening to their advice.
I’ll address the idea of borrowing more first. In my kit, From Debt to Cash, I talk about how you cannot borrow your way out of debt. It may sound like common sense, but it’s true. How can you borrow your way out of debt?
You can’t! You cannot borrow more money and get out of debt. The only way to get out of debt is to pay off your debt.
Here’s one problem with loan consolidations (and by the way there are a myriad of problems with this) you’ll end up with one payment. Well, one big payment is not necessarily the best way to go.
Let’s say you have 10 credit cards you’re trying to pay off. If you consolidate into one payment and have an emergency come up you may not be able to make your consolidate one payment because it’ll be pretty high.
If, however, you stick with multiple bills they are likely to be smaller. If you use my $15 dollar a day strategy you’ll be able to pay more toward one of the 10 bills until you pay off one bill at a time. In other words, there’s room for staggering bills if you need to.
Also, with the reserve fund you’ll have under my plan you’ll be able to use it (ONLY IF IT’S A LEGITIMATE EMERGENCY). If you consolidate all your bills and have an emergency what do you do?
I’ll concede the point that if you can write off your interest payments on your taxes that isn’t a bad thing. But, you’re taking short term debt that you can pay off in a year, 2 years, or under 5 years and turn it into 30 YEARS of payments that will cost you more in the long-run.
Finally, debt counseling usually involves these folks negotiating some of your debt down so they can get paid (yes they are working and will get paid for the work). The problem with debt counseling is it will be noted on your credit report. This isn’t good for several reasons.
First Lenders and the Big Banks look at your credit report and they’re not dummies. They can tell that the creditors on your credit report didn’t get all of their money. Believe it or not they view bankruptcy better then credit counseling because with bankruptcy the problem’s been solved.
Credit counseling prolongs the problem.
Also credit counseling hurts your credit score. You’re better off having 10 accounts than one account showing on your credit report. It’s a little complicated to explain why this is the case but it has to do with complex computer credit scoring models.
In fact it’s better to have 10 accounts showing on your credit then one and its better to have room to borrow on all of those accounts than just one account (see my kit, From Debt to Cash to understand why this is).
Ignore the credit counselor like the flu and use my strategies posted on this blog or get my kit, From Debt to Cash.
A toast to debt free living.
David…
My advice is to start running (AWAY) from these guys.
I know what you’re thinking. These guys are offering you an easy solution to the problem of to much debt. They say that all your problems will be wiped away in one shot! Many times they’ll offer to lower your overall interest rate and sometimes be able to deduct your interest from federal taxes.
Here’s why they are full of it and you could go bankrupt listening to their advice.
I’ll address the idea of borrowing more first. In my kit, From Debt to Cash, I talk about how you cannot borrow your way out of debt. It may sound like common sense, but it’s true. How can you borrow your way out of debt?
You can’t! You cannot borrow more money and get out of debt. The only way to get out of debt is to pay off your debt.
Here’s one problem with loan consolidations (and by the way there are a myriad of problems with this) you’ll end up with one payment. Well, one big payment is not necessarily the best way to go.
Let’s say you have 10 credit cards you’re trying to pay off. If you consolidate into one payment and have an emergency come up you may not be able to make your consolidate one payment because it’ll be pretty high.
If, however, you stick with multiple bills they are likely to be smaller. If you use my $15 dollar a day strategy you’ll be able to pay more toward one of the 10 bills until you pay off one bill at a time. In other words, there’s room for staggering bills if you need to.
Also, with the reserve fund you’ll have under my plan you’ll be able to use it (ONLY IF IT’S A LEGITIMATE EMERGENCY). If you consolidate all your bills and have an emergency what do you do?
I’ll concede the point that if you can write off your interest payments on your taxes that isn’t a bad thing. But, you’re taking short term debt that you can pay off in a year, 2 years, or under 5 years and turn it into 30 YEARS of payments that will cost you more in the long-run.
Finally, debt counseling usually involves these folks negotiating some of your debt down so they can get paid (yes they are working and will get paid for the work). The problem with debt counseling is it will be noted on your credit report. This isn’t good for several reasons.
First Lenders and the Big Banks look at your credit report and they’re not dummies. They can tell that the creditors on your credit report didn’t get all of their money. Believe it or not they view bankruptcy better then credit counseling because with bankruptcy the problem’s been solved.
Credit counseling prolongs the problem.
Also credit counseling hurts your credit score. You’re better off having 10 accounts than one account showing on your credit report. It’s a little complicated to explain why this is the case but it has to do with complex computer credit scoring models.
In fact it’s better to have 10 accounts showing on your credit then one and its better to have room to borrow on all of those accounts than just one account (see my kit, From Debt to Cash to understand why this is).
Ignore the credit counselor like the flu and use my strategies posted on this blog or get my kit, From Debt to Cash.
A toast to debt free living.
David…
Thursday, March 27, 2008
A recent survey found most people have no strategy
To manage their debt and some struggle to make monthly payments. Many of these folks plan to go deeper into debt for big-ticket purchases.
We’re never taught how to manage our money in school. Even worse, our parents are no help and we tend to follow their lead of not knowing any better. One thing you rarely hear me go off about is budgeting. I’m not a budgeter and if you follow my strategies for getting out of debt you don’t have to worry about budgeting.
Typical U.S. households carry $9,200 in credit card debt.
Lending Tree did a survey and found:
80% of respondents said they don’t plan to seek professional help to manage their finances or debt
30% said they’ll develop a plan on their own
13% said they have no intention of developing any kind of financial plan
33% of those concerned about their debt have a debt-to-income ratio of 50% or above, about 10% higher than the national average. Nearly 25% have a debt-to-income ratio exceeding 50%. Many financial planners say a debt-to-income ratio of about 33% is manageable.
19% of respondents concerned about debt said they plan to purchase a car in 2005 and 21% plan to make home improvements valued at more than $3,000
76% have outstanding balances on their credit cards or have personal loans, and 37% of those make only the minimum monthly payment.
Despite growing debt and lack of a budget, 40% of the respondents said they’re knowledgeable about personal finance
First and foremost. Your debt to income should bet a big fat ZERO! No debt is good debt. This survey shows how folks are struggling get by. The reason these folks are struggling to get by is because they have debt.
Let this be your wake-up call to get rid of the 80% percent attitude of living in debt and bondage. Instead, put yourself into the 20% crowd that doesn’t live beyond its means but below their means.
Get your strategy together through this blog and my kit, From Debt to Cash.
David…
We’re never taught how to manage our money in school. Even worse, our parents are no help and we tend to follow their lead of not knowing any better. One thing you rarely hear me go off about is budgeting. I’m not a budgeter and if you follow my strategies for getting out of debt you don’t have to worry about budgeting.
Typical U.S. households carry $9,200 in credit card debt.
Lending Tree did a survey and found:
80% of respondents said they don’t plan to seek professional help to manage their finances or debt
30% said they’ll develop a plan on their own
13% said they have no intention of developing any kind of financial plan
33% of those concerned about their debt have a debt-to-income ratio of 50% or above, about 10% higher than the national average. Nearly 25% have a debt-to-income ratio exceeding 50%. Many financial planners say a debt-to-income ratio of about 33% is manageable.
19% of respondents concerned about debt said they plan to purchase a car in 2005 and 21% plan to make home improvements valued at more than $3,000
76% have outstanding balances on their credit cards or have personal loans, and 37% of those make only the minimum monthly payment.
Despite growing debt and lack of a budget, 40% of the respondents said they’re knowledgeable about personal finance
First and foremost. Your debt to income should bet a big fat ZERO! No debt is good debt. This survey shows how folks are struggling get by. The reason these folks are struggling to get by is because they have debt.
Let this be your wake-up call to get rid of the 80% percent attitude of living in debt and bondage. Instead, put yourself into the 20% crowd that doesn’t live beyond its means but below their means.
Get your strategy together through this blog and my kit, From Debt to Cash.
David…
Wednesday, March 26, 2008
A real world success story
I’ve been working with a couple on paying off their bills and something magical happened today that I can only describe as FANTASTIC.
It had been 3 months now of paying down bills and my couple has endured several set-backs. The first set back was spending money saved through moving in with family.
It spurred me to write about NO PAIN NO GAIN. If it’s to easy and if you don’t have to suffer you generally take it for granted and don’t make the necessary changes in your life to get you on the right track of Debt Free Living.
I’ve often said that you have to get mad. You have to get sick and tired of being in hock up to your keaster. It’s that aggravation that’ll make you want to change your behavior and go from Debt to Cash.
The magical thing about this couple is all of a sudden after three months it finally sunk in and they actually have made some changes. Those changes have sunk in to the point that it is second nature now for these two to pay cash instead of credit.
The other amazing thing that happened to this couple is they came into some money (unexpected). Instead of blowing the money on a vacation or shopping they actually used the money to pay off more debt and they are ahead of schedule.
You can do it too. All you have to do is continue to pay down your debt and quit using credit cards. Go from debt to cash in every part of your life.
David…
It had been 3 months now of paying down bills and my couple has endured several set-backs. The first set back was spending money saved through moving in with family.
It spurred me to write about NO PAIN NO GAIN. If it’s to easy and if you don’t have to suffer you generally take it for granted and don’t make the necessary changes in your life to get you on the right track of Debt Free Living.
I’ve often said that you have to get mad. You have to get sick and tired of being in hock up to your keaster. It’s that aggravation that’ll make you want to change your behavior and go from Debt to Cash.
The magical thing about this couple is all of a sudden after three months it finally sunk in and they actually have made some changes. Those changes have sunk in to the point that it is second nature now for these two to pay cash instead of credit.
The other amazing thing that happened to this couple is they came into some money (unexpected). Instead of blowing the money on a vacation or shopping they actually used the money to pay off more debt and they are ahead of schedule.
You can do it too. All you have to do is continue to pay down your debt and quit using credit cards. Go from debt to cash in every part of your life.
David…
Tuesday, March 25, 2008
How To Master The Art-And-Science
Of debt free living and it begins by changing your mindset From Debt To Cash.
The formula is easy and the system is literally a step-by-step system that’ll get you from debt to cash.
Send me a note for your FREE guide to going from Debt to Cash.
Debt free living is by far the best thing that’ll ever happen to you. Debt free living allows you to live a more simple way in a complicated world. A world less complicated amounts to less stress, better relationships, and more money for you.
In my kit, From Debt to Cash, I lay out a complete and amazing system that takes you from debt to cash. The amazing thing is it works.
This blog’s designed to motivate and noodge you along. As I’ve said in previous posts we all need a little encouragement. No one and I mean no one want’s you to be debt free. When you really think about it all the encouragement you’ve ever gotten has been from the Big Banks and Finance Companies encouraging you to go into debt up to your eyeballs.
Your family, friends, and neighbors are probably all members of the 80% percent club. And the 80% percent club is a group of folks that continue to do what the crowd does. It’s all like a herd mentality. Why would you like to be like everyone else?
If you can’t find a mentor in the 20% percent club then whatever the 80% percent crowd is doing, DO THE OPPOSITE.
Or, get my kit and continue to read these posts. I’m a member of the 20% percent minority. We think differently, live differently, and enjoy life differently all because we’re willing to do what the majority either won’t do or can’t do.
Make your plan, do your plan, and get it done. Go for it! Become debt free now. You can do it. Now…Just do it!
David…
The formula is easy and the system is literally a step-by-step system that’ll get you from debt to cash.
Send me a note for your FREE guide to going from Debt to Cash.
Debt free living is by far the best thing that’ll ever happen to you. Debt free living allows you to live a more simple way in a complicated world. A world less complicated amounts to less stress, better relationships, and more money for you.
In my kit, From Debt to Cash, I lay out a complete and amazing system that takes you from debt to cash. The amazing thing is it works.
This blog’s designed to motivate and noodge you along. As I’ve said in previous posts we all need a little encouragement. No one and I mean no one want’s you to be debt free. When you really think about it all the encouragement you’ve ever gotten has been from the Big Banks and Finance Companies encouraging you to go into debt up to your eyeballs.
Your family, friends, and neighbors are probably all members of the 80% percent club. And the 80% percent club is a group of folks that continue to do what the crowd does. It’s all like a herd mentality. Why would you like to be like everyone else?
If you can’t find a mentor in the 20% percent club then whatever the 80% percent crowd is doing, DO THE OPPOSITE.
Or, get my kit and continue to read these posts. I’m a member of the 20% percent minority. We think differently, live differently, and enjoy life differently all because we’re willing to do what the majority either won’t do or can’t do.
Make your plan, do your plan, and get it done. Go for it! Become debt free now. You can do it. Now…Just do it!
David…
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