We haven’t spoken much about the need for a reserve fund while paying off your debt. To keep it simple a reserve fund very well may save your life!
When you’re in the middle of paying off all your debt (and because you’re doing it so quickly) a reserve fund allows you to keep the momentum.
Here’s my recommendation. When you’re doing the $15 dollar a day strategy, for example, keep two days and use the other five days for debt payoff. You typically only need several hundred dollars. It’ll take you less than 10 weeks and if you’re prone to emergencies you might want to save for 20 weeks.
The important thing to do is save while you payoff debt. It doesn’t matter which strategy you use to pay off your debt (see my Kit, Debt Free Living) it is critical for you to establish a reserve fund.
A reserve fund will do a lot for you including a “peace of mind” feeling while you’re paying down debt.
Remember the most important thing is to continue paying down debt. Don’t stop for anything. Once you have momentum you’ve got it made. Reestablishing momentum is difficult to do.
Start your reserve fund today, it’ll save your life.
David…
Saturday, March 15, 2008
Friday, March 14, 2008
The way to riches is to do the opposite
You’ve heard me talk about the 80/20 rule and more recently the 95/5 rule. The idea behind the 80/20 rule is most folks fall into the 80 percent rule. Most folks are in debt up to there eyeballs. Those 80% majority does it all wrong.
If you want to be successful and have no mentor or individual to model than do the opposite of the majority.
If everyone believes debt is good than don’t do debt. If everyone believes you’ll never get ahead than don’t believe it. And don’t do it, do the opposite and get ahead.
You’ll never get ahead doing what everyone else does. There’s an old saying. The definition of insanity is to do the same thing over and over again expecting different results. If you’re barely squeaking by and you want things to get better you’re in the INSANITY mode.
If you want to get out of your rut and get out of debt welcome to the 20% crowd (see my kit, Debt Free Living). These folks, the 20% percenters, have no debt live a freer life and do the opposite of the 80% percenters.
The way to riches is to do the opposite.
David…
If you want to be successful and have no mentor or individual to model than do the opposite of the majority.
If everyone believes debt is good than don’t do debt. If everyone believes you’ll never get ahead than don’t believe it. And don’t do it, do the opposite and get ahead.
You’ll never get ahead doing what everyone else does. There’s an old saying. The definition of insanity is to do the same thing over and over again expecting different results. If you’re barely squeaking by and you want things to get better you’re in the INSANITY mode.
If you want to get out of your rut and get out of debt welcome to the 20% crowd (see my kit, Debt Free Living). These folks, the 20% percenters, have no debt live a freer life and do the opposite of the 80% percenters.
The way to riches is to do the opposite.
David…
Thursday, March 13, 2008
Did you know?
You’ve paid off all your debt and now it’s down to the home! First, congratulations! I’d be celebrating big time.
Did you know you can pay off your mortgage in as little as 7 years? I’ve provided a few examples for you to chew on.
First, I’m assuming your loan is $100,000 with interest rate of 8% and term of 30 years. If you pay an extra $50 bucks a month you’ll reduce your time by 73 months.
Here’s an interesting little known fact. Let’s say your mortgage is $100,000 interest rate of 9% and 30 year term. The first month’s mortgage payment equals $54.62 toward the principal while the remaining $750 goes toward interest.
The second monthly principal payment works out to $54.62 plus .41cents leaving $749.59 toward interest. If you were to pay an extra $54.62 toward the principal you would save $94,647.20 in interest over the life of the loan and reduce your 30 year term to 15 years. The key is to add an extra principal payment each month. It’s the greatest investment you could possibly make!
If you can’t do any of the above try an annual bonus or tax return. For example, if you use a $500 dollar bonus each year to reduce principal on your home you’d save $26,937.73 in interest and reduce the number of monthly payments by 5 years and 8 months.
Normally I don’t get into lots and lots of numbers but I think you get the point. If nothing else treat your mortgage the way you treated your debt with a relentless pursuit of paying it off. It will pay off big time! It’s the best investment you could possibly make. Now you know.
David…
Did you know you can pay off your mortgage in as little as 7 years? I’ve provided a few examples for you to chew on.
First, I’m assuming your loan is $100,000 with interest rate of 8% and term of 30 years. If you pay an extra $50 bucks a month you’ll reduce your time by 73 months.
Here’s an interesting little known fact. Let’s say your mortgage is $100,000 interest rate of 9% and 30 year term. The first month’s mortgage payment equals $54.62 toward the principal while the remaining $750 goes toward interest.
The second monthly principal payment works out to $54.62 plus .41cents leaving $749.59 toward interest. If you were to pay an extra $54.62 toward the principal you would save $94,647.20 in interest over the life of the loan and reduce your 30 year term to 15 years. The key is to add an extra principal payment each month. It’s the greatest investment you could possibly make!
If you can’t do any of the above try an annual bonus or tax return. For example, if you use a $500 dollar bonus each year to reduce principal on your home you’d save $26,937.73 in interest and reduce the number of monthly payments by 5 years and 8 months.
Normally I don’t get into lots and lots of numbers but I think you get the point. If nothing else treat your mortgage the way you treated your debt with a relentless pursuit of paying it off. It will pay off big time! It’s the best investment you could possibly make. Now you know.
David…
How to eliminate debt by the truck-load
In previous posts we talk about strategies for paying off debt and paying it off fast. There’s no reason to use a clock when paying off your debt. You should do it relentlessly literally every single day (see my $15 dollar a day strategy or get my kit, Debt Free Living).
The amazing thing about paying off debt is you can do it by the truckload. When you change your mindset now it comes naturally and easily. Paying off debt becomes easy because you become relentless about it.
There’s a fire inside you and all you want to do is get rid of debt fast and by the truckload. Many folks discover new and creative ways to pay off debt through garage sales, part-time jobs, overtime, the reward system, the $15 dollar a day strategy and on and on.
The reason the debt elimination by the truckload strategy succeeds is because you consume yourself with it. It becomes an obsession. And the funny thing about it is it doesn’t take long for this to happen. There’s a snowball effect, kind of like a snowball rolling down a mountain getting larger and picking up steam.
It’s sort of a transformation. You transform yourself and your philosophy on life from DEBT TO CASH. It’s utterly amazing how you can do it.
For most of us the most difficult thing to do is to start. I’ve heard stories of folks who completely go through the house looking for change; from the garage to the closets to the couch and come up with tens to hundreds of dollars to pay off a bill.
Before you know it you become relentless. Take all the strategies on this post and my kit, DEBT FREE LIVING and add it all together and you’ll pay off your debt by the truck-load.
David…
The amazing thing about paying off debt is you can do it by the truckload. When you change your mindset now it comes naturally and easily. Paying off debt becomes easy because you become relentless about it.
There’s a fire inside you and all you want to do is get rid of debt fast and by the truckload. Many folks discover new and creative ways to pay off debt through garage sales, part-time jobs, overtime, the reward system, the $15 dollar a day strategy and on and on.
The reason the debt elimination by the truckload strategy succeeds is because you consume yourself with it. It becomes an obsession. And the funny thing about it is it doesn’t take long for this to happen. There’s a snowball effect, kind of like a snowball rolling down a mountain getting larger and picking up steam.
It’s sort of a transformation. You transform yourself and your philosophy on life from DEBT TO CASH. It’s utterly amazing how you can do it.
For most of us the most difficult thing to do is to start. I’ve heard stories of folks who completely go through the house looking for change; from the garage to the closets to the couch and come up with tens to hundreds of dollars to pay off a bill.
Before you know it you become relentless. Take all the strategies on this post and my kit, DEBT FREE LIVING and add it all together and you’ll pay off your debt by the truck-load.
David…
Wednesday, March 12, 2008
How to go from debt to cash even if you don't deserve it
A friend I’ve been advising recently shared that she felt guilty and undeserving since she was in debt up to her eye balls.
It got me to thinking. You can be debt free and CASH rich even if you don’t deserve it. How do you do it?
It’s that attitude and behavioral thing I’ve been ranting about on this post. You deserve to be free of bondage, free of worries, and free of creditors hassling you.
How do you do this even if you don’t deserve it?
You were born to be free. You were born to achieve everything you’ve ever wanted and more. Period. It’s your God given right. I don’t care how creditors make you feel and I don’t care why you’ve been feeling like you don’t deserve it because you do deserve it and much more.
There’s a mindset I’ve feel like I’ve been preaching about for years. This mindset is perpetuated by the majority of folks (I call it the 80% majority). The interesting thing about it is the credit card companies make you feel bad through their advertising. It may seem counterintuitive but here’s how it works.
Credit card companies will tell you that you deserve to have it now. Buy it now even if you can’t afford it. What the credit card companies don’t tell you is they are hoping for you to buy it now so you can go into hock to them. Once you owe them money the tables are turned on you and they now OWN YOU.
Then they use guilt and other things to keep you down because when you are in a cycle of owing money you begin to feel hopeless. And the reason you feel hopeless is because the credit card companies now own you. It’s interesting how you don’t even realize how they own you. It causes an attitude change in you where you still want it all like the credit card companies are saying but now you have to beg them to raise your credit card limit so you can have it now.
When you break the cycle of debt you break the credit card companies and you take charge of your life and you really begin to feel great and you really do HAVE IT ALL. You can have anything you want as long as you change your mindset and go From Debt to CASH.
Use some of my previous posts to get the strategies and techniques to make you free or my kit, Debt Free Living.
You can change your mindset. You can have everything you were born to get and born to do when you go From Debt to CASH.
David…
It got me to thinking. You can be debt free and CASH rich even if you don’t deserve it. How do you do it?
It’s that attitude and behavioral thing I’ve been ranting about on this post. You deserve to be free of bondage, free of worries, and free of creditors hassling you.
How do you do this even if you don’t deserve it?
You were born to be free. You were born to achieve everything you’ve ever wanted and more. Period. It’s your God given right. I don’t care how creditors make you feel and I don’t care why you’ve been feeling like you don’t deserve it because you do deserve it and much more.
There’s a mindset I’ve feel like I’ve been preaching about for years. This mindset is perpetuated by the majority of folks (I call it the 80% majority). The interesting thing about it is the credit card companies make you feel bad through their advertising. It may seem counterintuitive but here’s how it works.
Credit card companies will tell you that you deserve to have it now. Buy it now even if you can’t afford it. What the credit card companies don’t tell you is they are hoping for you to buy it now so you can go into hock to them. Once you owe them money the tables are turned on you and they now OWN YOU.
Then they use guilt and other things to keep you down because when you are in a cycle of owing money you begin to feel hopeless. And the reason you feel hopeless is because the credit card companies now own you. It’s interesting how you don’t even realize how they own you. It causes an attitude change in you where you still want it all like the credit card companies are saying but now you have to beg them to raise your credit card limit so you can have it now.
When you break the cycle of debt you break the credit card companies and you take charge of your life and you really begin to feel great and you really do HAVE IT ALL. You can have anything you want as long as you change your mindset and go From Debt to CASH.
Use some of my previous posts to get the strategies and techniques to make you free or my kit, Debt Free Living.
You can change your mindset. You can have everything you were born to get and born to do when you go From Debt to CASH.
David…
Tuesday, March 11, 2008
Discover the fortune that lies hidden in your salary
In my kit, Debt Free Living, I talk about strategies and techniques to get you out of debt and into CASH. Cash is KING.
The more you study the kit the more you discover a fortune that’s hidden in your salary. We live in a sound-byte world. We want information in short snippets. We rely on the television to give us ten second blurbs to explain what’s going on in a complicated world.
It is the reality we live in.
To understand the fortune you have in your salary you need to understand the concept of living Debt Free. Living debt free is deeper than just paying off your credit card bills, auto loans, and home. Living debt free is taking the salary you make and turning it into a fortune.
You’ve heard me rant about how difficult it is to be GENEROUS when you owe so much money you can barely make your bills. The interest you pay your creditors is the money you could be using to be generous.
It’s difficult to explain how much extra money you get from your salary when you’re debt free. In order to really understand it you’ve got to get out the calculator. Add up the interest you’re paying per month now with all your debt. Add all your debt separate from the interest.
When you pay cash you’re paying what you have in your pocket. When you pay your credit cards you’re spending next month’s paycheck. You’re spending money you haven’t made yet. With debt you spend what you don’t have. With cash you’ve got the money and the interest you get from keeping the money in the bank or other financial institution.
The quicker you get to debt free living the quicker you get to the fortune that lies hidden within your salary.
David….
The more you study the kit the more you discover a fortune that’s hidden in your salary. We live in a sound-byte world. We want information in short snippets. We rely on the television to give us ten second blurbs to explain what’s going on in a complicated world.
It is the reality we live in.
To understand the fortune you have in your salary you need to understand the concept of living Debt Free. Living debt free is deeper than just paying off your credit card bills, auto loans, and home. Living debt free is taking the salary you make and turning it into a fortune.
You’ve heard me rant about how difficult it is to be GENEROUS when you owe so much money you can barely make your bills. The interest you pay your creditors is the money you could be using to be generous.
It’s difficult to explain how much extra money you get from your salary when you’re debt free. In order to really understand it you’ve got to get out the calculator. Add up the interest you’re paying per month now with all your debt. Add all your debt separate from the interest.
When you pay cash you’re paying what you have in your pocket. When you pay your credit cards you’re spending next month’s paycheck. You’re spending money you haven’t made yet. With debt you spend what you don’t have. With cash you’ve got the money and the interest you get from keeping the money in the bank or other financial institution.
The quicker you get to debt free living the quicker you get to the fortune that lies hidden within your salary.
David….
Monday, March 10, 2008
How debt sucks the life out of you!
When I was in debt up to my eye-balls it never occurred to me how much it was sucking the life out of me. It’s kinda like being in the forest on fire. You cannot see beyond the tree in front of you and never realize you’re slowly burning up.
Debt has that same affect. As you stagger to pay your bills it never occurs to you that you’re doing this all of the time and worrying all of the time. Slowly but surely it sucks the life out of you.
I remember thinking at one point that I was so far under there was no way I’m going to get out of this situation.
The more you allow debt to pile up the more you go under the more you worry and the more it sucks the life right out of you.
The simplest solution is to go on a nice and easy debt diet. Just like you were to lose an ounce at a time you lose a buck at a time and slow get out of debt. There will come a point when all of a sudden its gone and the pressure’s off.
Don’t let debt suck the life out of you.
Just like eating an elephant. The thing’s massive! You’ve got to eat it one bite at a time. Just like with debt you got to tackle it one bill at a time. I’ve provided many strategies for doing that (see previous posts or get my Debt To Cash Kit).
Don’t let debt eat you up. Take the pressure off and start tackling it one bill at a time.
David…
Debt has that same affect. As you stagger to pay your bills it never occurs to you that you’re doing this all of the time and worrying all of the time. Slowly but surely it sucks the life out of you.
I remember thinking at one point that I was so far under there was no way I’m going to get out of this situation.
The more you allow debt to pile up the more you go under the more you worry and the more it sucks the life right out of you.
The simplest solution is to go on a nice and easy debt diet. Just like you were to lose an ounce at a time you lose a buck at a time and slow get out of debt. There will come a point when all of a sudden its gone and the pressure’s off.
Don’t let debt suck the life out of you.
Just like eating an elephant. The thing’s massive! You’ve got to eat it one bite at a time. Just like with debt you got to tackle it one bill at a time. I’ve provided many strategies for doing that (see previous posts or get my Debt To Cash Kit).
Don’t let debt eat you up. Take the pressure off and start tackling it one bill at a time.
David…
There's always an alternative
A friend of mine has a Starbucks fetish. He can’t avoid Starbucks. If he’s driving down the road his car will automatically turn into the Starbucks parking lot. He told me once that he just can’t help it.
He’ll visit Starbucks 4 to 5 times a day. In case you’re wondering how much the Starbucks habit equals in dollars for him; $16 to $20 bucks a day. Many of us have fetishes that we just can’t control.
Maybe your’s is smoking. Maybe it’s eating out everyday. Whatever it is there’s always an alternative. For my friend, I suggested two strategies to deal with his Starbucks addiction.
First, there’s always an alternative to your addiction. If for example you smoke two packs of cigarettes a day purchase by the case one name brand and one off-brand cigarettes. Mix the cigarettes. Maybe you even alternate between one high dollar cigarette followed up by a cheap cigarette. You can always keep the cheap cigarettes in your high dollar cigarette package.
For my friend I suggested he make coffee in the morning and use one of his Starbucks cups. If you’re going to Starbucks four or five times a day just alternate with an alternative coffee.
In the morning he’d take one of his old Starbucks cups and fill it with fresh coffee from his house (which by the way was way less expensive to make).
He turned his 4 – 5 times a day habit into two. The alternatives cost pennies, not dollars and he literally saved $8 plus dollars a day.
I then convinced him to use my (money order strategy) and he began to pay off his credit cards early (see my previous post on the strategy or order my Debt Free Living Kit)
It doesn’t take much to change your fetish into a debt pay off strategy or savings plan. Just take the two examples I’ve laid out for you and apply it to your fetish.
There’s always an alternative.
David…
He’ll visit Starbucks 4 to 5 times a day. In case you’re wondering how much the Starbucks habit equals in dollars for him; $16 to $20 bucks a day. Many of us have fetishes that we just can’t control.
Maybe your’s is smoking. Maybe it’s eating out everyday. Whatever it is there’s always an alternative. For my friend, I suggested two strategies to deal with his Starbucks addiction.
First, there’s always an alternative to your addiction. If for example you smoke two packs of cigarettes a day purchase by the case one name brand and one off-brand cigarettes. Mix the cigarettes. Maybe you even alternate between one high dollar cigarette followed up by a cheap cigarette. You can always keep the cheap cigarettes in your high dollar cigarette package.
For my friend I suggested he make coffee in the morning and use one of his Starbucks cups. If you’re going to Starbucks four or five times a day just alternate with an alternative coffee.
In the morning he’d take one of his old Starbucks cups and fill it with fresh coffee from his house (which by the way was way less expensive to make).
He turned his 4 – 5 times a day habit into two. The alternatives cost pennies, not dollars and he literally saved $8 plus dollars a day.
I then convinced him to use my (money order strategy) and he began to pay off his credit cards early (see my previous post on the strategy or order my Debt Free Living Kit)
It doesn’t take much to change your fetish into a debt pay off strategy or savings plan. Just take the two examples I’ve laid out for you and apply it to your fetish.
There’s always an alternative.
David…
Sunday, March 9, 2008
Just because you're paranoid doesn't mean they're not out to getcha!
The fact is the Big Banks are out to get you whether you believe it or not. How do they get you? Banks are out to get you by continually offering you great deals on credit cards.
Every year billions of credit card offers go out to consumers. Many times these credit card companies are trying to get you to transfer one balance to the new card offering no interest for several months.
This tactic is similar to Beer companies. For the most part beer companies are not trying to find new beer drinkers. Beer companies are trying to get you to change brands. All of the commercials on tv assume you’re already a beer drinker and encourage you to try their brand.
A healthy paranoid attitude can be a good thing when it comes to debt. The Big Banks want you to be into hock forever. The big banks are interested in getting interest payments from you month in and month out.
The worst thing you can do to a credit card company is to pay off the entire balance every month.
Credit card companies are very sneaky. They’ll offer you a bunch more credit knowing you won’t be able to pay off the balance at the end of the month. This forces you to become a minimum payment customer.
Only discipline can save you and since you’re reading this I’m guessing you’re in debt.
A little paranoia never hurt anyone.
The next offer you get from the credit card folks needs to thrown in the trash. You might even rip it up first. You’ll feel even better! Do this 3 times and you’ll kick the habit and defeat the credit card company tactics.
Some healthy paranoia never hurt anybody.
David…
Every year billions of credit card offers go out to consumers. Many times these credit card companies are trying to get you to transfer one balance to the new card offering no interest for several months.
This tactic is similar to Beer companies. For the most part beer companies are not trying to find new beer drinkers. Beer companies are trying to get you to change brands. All of the commercials on tv assume you’re already a beer drinker and encourage you to try their brand.
A healthy paranoid attitude can be a good thing when it comes to debt. The Big Banks want you to be into hock forever. The big banks are interested in getting interest payments from you month in and month out.
The worst thing you can do to a credit card company is to pay off the entire balance every month.
Credit card companies are very sneaky. They’ll offer you a bunch more credit knowing you won’t be able to pay off the balance at the end of the month. This forces you to become a minimum payment customer.
Only discipline can save you and since you’re reading this I’m guessing you’re in debt.
A little paranoia never hurt anyone.
The next offer you get from the credit card folks needs to thrown in the trash. You might even rip it up first. You’ll feel even better! Do this 3 times and you’ll kick the habit and defeat the credit card company tactics.
Some healthy paranoia never hurt anybody.
David…
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