5 Essentials to Paying Off Debt – Step 3

In this series, I want to equip you to become debt free!! Jenn and I became debt free in just 14 months by following this process. I can tell you this – there is NOTING like living life without the weight of debt!

STEP 1 – Understand the WHY before the HOW

STEP 2 – Calculate your Debt Freedom Date

STEP 3 – Accelerate your debt elimination
DEBT – This four letter word often consumes so much of our lives, thoughts and actions. But, it doesn’t have to!

When it comes to debt, I understand how stressful and frustrating it can be. I understand the weight and fiction it can bring to a family. However, I also know the freedom that comes when one become debt free and I want you to experience this freedom!

When you are ready to start attacking your debt, here are a few ways to accelerate debt elimination. (But before you begin, make sure you’re not making the #1 Debt Mistake – HERE.)

3 Ways to Accelerate Debt Elimination:

  1. Reduce Interest – Many people with substantial consumer debt do not realize that 50% – 75% of their payments are merely going to the lender as interest. This greatly reduces your ability to lower your debt. So, here are a few ways to lower your interest:
    1. Transfer to a 0% Interest Credit Card (Learn more HERE)
    2. Call & ask for a lower rate
    3. Pay on-time
    4. Establish automatic payments
  2. Increase Income – Since we’re all friends here, if we’re being completely honest, we all vote for this option, right? But a lot of people don’t realize that there are numerous ways to increase income that are within your hands. Here are a few:
    1. Pay Raise (see salary.com)
    2. Tax Refund
    3. Bonus
    4. Work Overtime
    5. Extra Job
    6. Sell Some Possessions
  3. Decrease Outgo – This is an option that is always available to us, but it’s probably not fun. If you can decrease the outgo to other things, you can increase the outgo to liberating your life from debt!
    1. Create and follow a budget!
    2. Sell some possessions

You can learn more about each of these steps in my book, I Was Broke. Now I’m Not.

5 Essentials to Paying Off Debt – Step 2

In this series, I want to equip you to become debt free!! Jenn and I became debt free in just 14 months by following this process. I can tell you this – there is NOTING like living life without the weight of debt!

STEP 1 – Understand the WHY before the HOW

STEP 2 – Calculate your Debt Freedom Date
When I meet with people, it’s a guarantee that I will calculate their debt freedom date. When I do this, it’s clear that people do not like debt! It’s also apparent that people have not been paying attention to their finances and do not have a well-defined plan for their life. Otherwise, they would not have incurred most of the debt. However, there is always HOPE and a way out! 

In these meetings, I often use the example of a dragon. Follow me here! How can you effectively defeat a dragon if you don’t know how many heads it has or how large the dragon is? So, before we calculate your debt freedom date,  let’s establish three things: 

  1. Who do you owe
  2. How much do you owe
  3. What are the payments that you are ACTUALLY making

You can list these on the Debt Freedom Date Calculator. Now we can calculate your debt freedom date! This date is simply the date that you will be debt free (including and excluding the house).

Let’s look at a sample. In this sample, the couple listed all of their non-house, non-business debts, as well as their house debt. After all of the debts are inputted, the debt freedom date is calculated. This couple will be debt free, excluding the house, in just 3.3 years and completely debt free, including the house, in 7.7 years!! Get fired up!

Debt Freedom Date Calculator

Are you ready to take your next step? You can calculate your debt freedom date HERE!

IMPORTANT NOTE: When you take this next step to become debt free, you must eliminate the potential for new debt! If you keep swiping the credit cards and running up the balance, you’re just eliminating your potential of becoming debt free.

Have you calculated your date? How many months until you’re debt free?

 

5 Essentials to Paying Off Debt – Step 1

I have found that a large group of those who attend one of my events, are living paycheck-to-paycheck AND carrying debt. In fact, statistics from a recent survey I conducted show that 57% of people are living paycheck-to-paycheck and 73% of people are in debt (excluding the mortgage). When asked how people are doing with managing their money, 45% said that they were barely keeping their head above water or drowning! Only 9% of people feel like they are winning with their money!

No matter where I go, I see the footprint of debt on people’s lives – marriages failing, stress and depression taking over, and hopelessness closing in. And all of this is happening in the wealthiest country on the planet! This is entirely unacceptable!

I WANT YOU TO BECOME DEBT-FREE!! It changes your life! It enables you to accomplish far more than you ever thought possible with your personal finances! It allows you to do exactly what you were put on earth to do – regardless of the income! In this series, I’m going to share the process that I followed to become debt free. Are you ready?

STEP 1 – Understand the WHY before the HOW
I believe this is the most important step in becoming debt free! In the hundreds of financial coaching sessions that our team has led, it’s amazing how many people do not have a plan for their lives. We ask them the “why” and they stare at us like we’re speaking a different language.

Unfortunately, this is the first time that many of these people have ever seriously thought about what they want to accomplish with their lives. As a result, they are bumbling through life just trying to make it through the day. What a miserable way to live!

I cannot overstate this fact – YOUR LEVEL OF EXPECTATION DETERMINES YOUR LEVEL OF PREPARATION!

When Jenn and I wrote down our plans, hopes & dreams on paper, we realized that our lack of money management proved we had no real expectations of accomplishing these plans, hopes & dreams. We wanted to move back to South Carolina to take a job that paid way less than what we were making, but every single dinner at Outback was robbing us of that opportunity. Every single debt payment went off to make the bank wealthy while at the same time robbing us of our God-given dreams!

That made me MAD! It made me FURIOUS! It made me realize how incredibly stupid I was to be managing our money so crazily! I had a significant amount of our income going to pay car debt, credit card debt, and student loan debt. Add in the stupid house payment, and I had thousands of dollars per month running off to make the bank wealthy!

By writing out our plans, hopes, & dreams on paper, Jenn and I were motivated to manage our money differently. It caused us to view debt differently.

Take your first step today by writing down your plans, hopes & dreams. If you are married, you need to do this separately and then take time to discuss it with each other. By the way, one of my plans, hopes, & dreams is for you to become debt-free!

Why do you want to be debt free? It’s not easy! After you get started, it might be easier but it’s not going to be easy. There are so many things that compete for your money. So, why do you want to break free from debt? One of the most common responses I get is, “so I can do whatever I want”. I don’t believe this is the best response. I believe a better response is, “so I can live a fully funded life doing exactly what I’ve been put on this earth to do!”

What has kept you from attacking your debt?

 

 

Monday Money Tip: Make Your Debt Pay Off Visual

It’s that time again…time for today’s Monday Money Tip! In today’s Monday Money Tip, I wanted to share one of the ways my family had FUN while attacking our debt – coloring! It made our Debt Freedom March much more visual and enabled us to see the progress we were making. It was awesome!

Want to automatically receive a helpful and practical money tip every Monday? Register FREE at MondayMoneyTip.com.

 

Liberate Your Life From DEBT

I am FIRED UP to be teaching the “Liberate Your Life From DEBT” LIVE online experience today at 12:00 PM EST!

It is my passion to help people win with their money, and I’ve discovered that succeeding with money is more of a journey rather than just a moment. Yet, many people’s money journey is being impeded by this one thing: DEBT!

I remember when I was broke with an average bank account balance of $4.13. I wanted to save money. I wanted to bless my child. I wanted to give money away. I wanted to invest.

There was just one problem: I had a ton of DEBT. I had no financial margin. Every dollar I earned was immediately redirected toward a payment. This made it very challenging to manage our finances. Even worse, I didn’t know how to fix it! However, over the course of just 14 months, I eliminated all my non-house debt. My credit cards, student loans, truck debt, car note, and furniture debt – all of these debts were gone!

My question for you: “Do you have debt?”

If you answered “YES!”, let me ask another question: “What would life be like if you didn’t have to make these debt payments each month?”

I want to help you experience a life without a pile of debt. This is why I’m inviting you to this special LIVE online event that I will be hosting today (Thursday, April 16th) at 12:00 PM EST.

In this online experience, I will be sharing how my family liberate ourselves from a pile of debt and positioned ourselves to live a fully funded life. I’ll also be sharing 8 Ways to Eliminate Debt – Fast! You don’t want to miss it!!

Liberate Your Life From DEBT Live Online Event Details

  • DATE: Thursday, 4/16/2015 at 12:00 PM Eastern Time (11:00 AM Central; 9:00 AM Pacific)
  • DURATION: 60 minutes total (45 minutes teaching – 15 minutes Q&A)
  • LOCATION: LIVE Online
  • COST: FREE! (but you MUST register to secure your spot)
  • REGISTER: HERE

I really hope you will be able to join me! It’s FREE, but you do have to REGISTER.

Where Are You On Your Money Journey?

Can we all agree that money is a journey, not a moment? This journey comes with ups and downs and curves. With that being said, I know everyone is at different places and levels of progress. Some people are winning with their money, while others are struggling to get by.

I’m so passionate about helping people accomplish far more then they ever thought possible with their personal finances. It’s what drives me! In order to serve you better on your journey, will you fill out this quick survey answering the question: “Where are you on your money journey?”

 

We’re Hiring – Financial Administrator

I’m so excited about what is happening through the I Was Broke. Now I’m Not. Team! We have an amazing team that is so passionate about helping people accomplish far more than they ever thought possible with their personal finances. We’ve seen our dream literally become a reality and EXPLODE (in a great way) before our very eyes! Over the years, our team has been given the opportunity to teach and speak to literally tens of thousands of people.

With this growth comes the need for great people to help steward this tremendous effort. That’s why we are currently hiring a Financial Administrator. This part-time position (20-25 hours per week) is located in our Anderson, South Carolina office.

Download the full job description HERE.

If you feel like this role would be an incredible fit for you:

  • Send your resume to: info@iwbnin.com
  • Tell us why you would be an incredible fit for this role and our team
  • Include as many specific skill sets and abilities that you posses that would allow you to excel in this role

 

Monday Money Tip: Using the Debt Snowball Concept

During the month of April, I’m focusing on all things related to debt. To start this week off right, I’m sharing the process that I used to eliminate all of my non-house debt in just 14 months and my house mortgage in 10 years.

Get fired up! YOU CAN DO THIS!

For more information on how to eliminate debt, pick up a copy of my latest book, I Was Broke. Now I’m Not. 

#1 Debt Mistake

When I meet people at events, I often ask them: “What is your top financial goal for the year?”

By far, the most common response is, “I want to reduce or eliminate debt!”

This is an incredible goal. Reducing or eliminating debt helps create financial margin and reduce stress. However, many people make the mistake of skipping straight to debt reduction without first saving money in an emergency fund. This is a HUGE MISTAKE.

You see, I made this mistake for a long time. I wanted to kill debt. I was frustrated and angry and wanted to say goodbye to my long-time friend, Sallie Mae Student Loans, the bank, credit card companies, and stores. I wanted the debt to be G-O-N-E. So I ran right past the more important step – saving money.

Take a minute to think about it. If you do not save but only focus on attacking your debt with any and all extra money (tax refunds, bonuses, money freed up by budgeting better, etc), you will begin to see your debt go down.

Then your car will break down.

How will you pay for it? Since you skipped the “save money” step, you will have to use credit to pay for it. This becomes an extremely disappointing moment. It causes many people to give up on debt freedom and say, “I just can’t seem to get ahead.”

Choose to save money first. I recommend starting with at least one month of expenses. Once all of the non-house, non-business debt is gone, build the savings to 3 months of expenses.

Yes, this slows down the debt pay-off. Yes, it’s frustrating to focus on savings when you have debt (especially when you include interest). BUT if you save first, you will secure your ability to stop acquiring new debt, which is the biggest step you can make towards true financial freedom.

Interested in learning more about saving, eliminating debt, and budgeting? Check out my book I Was Broke. Now I’m Not.

5 Basic Steps to Investing – Step 5

Investing! This is consistently given as one of the most confusing topics individuals face. In this series, I wanted to share some basic investing fundamentals. My goal is to help you understand this topic better and walk away with practical steps.

STEP ONE  Evaluate & Diversify 

STEP TWO  Automate Your Investments 

STEP THREE  Get the Free Money

STEP FOUR  Unleash the Power of Compound Interest

STEP FIVE  Continue to Learn about Practical Investing Opportunities
There are so many different types of investment opportunities, so I’ve broken down a few of them.

Stocks – When you own stock in a company, you technically become a part owner of that company. You have some claim to the assets and earnings of the company. Stocks are foundational to most investment portfolios. They are known to be very volatile in the short term but have historically outperformed other investments in the long run. 

Mark Twain has famously said this about investing in stocks: “October: This is one of the particularly dangerous months to invest in stocks. Other dangerous months are July, January, September, April, November, May, March, June, December, August and February.”

There are two major types of stocks:

  • Common Stock: Common stock allows the holder to vote in the shareholder meetings (depending on the amount of stock owned) and provides access to dividends or profit sharing produced by the company.
  • Preferred Stock: Preferred stock holders have priority over common stock holders. This applies in many areas including when dividends are being paid to shareholders.

Bonds – A bond is a large debt owed by a company, government, or even a school, where the borrowing institution has agreed to repay an established amount of interest payments for a set period of time. When this time expires, the borrower then returns all of the principal back to the lender(s). Bonds can vary in maturity times anywhere from 1 year to 30 years. I like to think of my personal residence as a bond investment. A bond is generally less risky.

Mutual Funds & Exchange Traded Funds (ETFs) – Mutual funds and ETFs let you accumulate a wide variety of investments that couldn’t normally obtain without consuming large amounts of time and money. Mutual funds and ETFs are funded “mutually” by you, me and millions of our closest friends. Our money is pooled together and then used by the “mutual fund managers” to invest in hundreds of other company stocks, bonds, and other sorts of investments. Usually, mutual funds and ETFs have specific charters that direct their investments. Our mutual fund might only focus on established companies in the USA while another could focus on investing in up-and-coming companies in third world countries.

Other Investing Opportunities – People so often hold themselves to these common types of investing and never branch out. Investing opportunities are all around you! You can invest in a small home and rent it out. You could invest in small businesses in your community. When you are investing, you can think outside the box. Some of the greatest returns can be found when investing in unorthodox ventures.

Next Steps
– Review your investments and know what you are invested in
– Start to think OUTSIDE of the stock market when you’re investing
– Start investing!
– Recommended Resource ==> OXEN: The Key to an Abundant Harvest – Learn how to maximize your money through investing

5 Basic Steps to Investing – Step 4

Investing! This is consistently given as one of the most confusing topics individuals face. In this series, I wanted to share some basic investing fundamentals. My goal is to help you understand this topic better and walk away with practical steps.

STEP ONE  Evaluate & Diversify 

STEP TWO  Automate Your Investments 

STEP THREE  Get the Free Money

STEP FOUR  Unleash the Power of Compound Interest  
Have you ever heard the say, “my money is working for me”? This is exactly what compound interest does for you! When you utilize the power of compound interest, you’re allowing the interest you’re making to also earn interest.

For example, let’s say we have $100 in an investment account that grew to $105 in one year. This is the equivalent of 5% interest. Now suppose the $105 is left alone for another year and continues to grow at a rate of 5%. Will it be paid another $5 interest when the second year is up? No! It will be paid $5.25 because interest was received on $105 – not just $100. Interest earning interest!

Take a look at the below example of a $100/month investment growing at an annual compound rate of 12%.

Compound Interest Table

 

 

Remember,  you are only investing $100 each month! After 40 years, you’ve only invested $48,000 BUT your account balance is $1,176,477! This means that $1,128,477 is the interest you have gained!

Now do you see the POWER of compound interest?

Where do you find investments that offer 12% return? I have found no investments that constantly return 12% every single year, but I have found several mutual funds that average over 12% return over the past 50 years. Some years could lose 15% while others gain 30%. You can see a list of my current investments HERE.

How to maximize your investment growth:

  1. Invest enough to receive the entire company match: By investing in an employer-sponsored retirement plan that matches a portion of your contributions, you could even receive a 50% or 100% return!
  2. Monitor your investments at least every six months: I track my investments at the end of every single month. This helps me understand how each one is performing and allows me to make necessary adjustments.
  3. Consider investments beyond the stock market: The stock market is just one place to invest. Consider investing in a small businesses, real estate, and intellectual property – like patents and licensing rights. Remember, a higher interest rate almost always means a higher risk.

Next Steps
– Establish a consistent investing habit. Invest into your retirement account every paycheck for the rest of your working life. Even if you can only invest a small amount, it will add up to more than you can imagine!
– Recommended Resource ==> OXEN: The Key to an Abundant Harvest – Learn how to maximize your money through investing

5 Basic Steps to Investing – Step 3

Investing! This is consistently given as one of the most confusing topics individuals face. In this series, I wanted to share some basic investing fundamentals. My goal is to help you understand this topic better and walk away with practical steps.

STEP ONE  Evaluate & Diversify 

STEP TWO  Automate Your Investments 

STEP THREE  Get the Free Money 
Yes, I said FREE money. Many employers will match a portion of your contributions into a self-directed retirement plan! I encourage you to go to your human resource department and sign up for the retirement plan. Start investing money into it immediately! Contribute enough money to obtain the entire employer match. Remember, this is really just FREE money!

Each company is different, but most companies will usually match up to a certain percent of your pay. I worked for an employer that matched me dollar-for-dollar up to 8% of my pay (100% automatic rate of return!!). Another matched dollar-for-dollar up to 6% of my pay. Still another matched dollar-for-dollar up to 3% of my pay. Whatever your employer is willing to give you is FREE MONEY!

It is baffling that many people don’t take advantage of this opportunity. I have heard several excuses about why people choose not to, excuses like:

  • “I can’t afford to contribute.”
  • “I’m living paycheck-to-paycheck already.”

These people are basically saying they can’t afford to be given free money. Doesn’t make a whole lot of sense. This is an opportunity to receive 100% return on your investment! DO NOT WASTE THIS CHANCE!

Next Steps:
– Talk to your employer TODAY and sign up for your company’s retirement plan. Start contributing something – at least enough to get the full match.
– As quickly as possible, increase your investing contribution to at least 10% of your gross income. I know this is a lot of money, but you will NEVER regret this decision.
– Recommended Resource ==> OXEN: The Key to an Abundant Harvest – Learn how to maximize your money through investing

5 Basic Steps to Investing – Step 2

Investing! This is consistently given as one of the most confusing topics individuals face. In this series, I wanted to share some basic investing fundamentals. My goal is to help you understand this topic better and walk away with practical steps.

STEP ONE  Evaluate & Diversify 

STEP TWO  Automate Your Investments 
Make your investments automatic! Your bank account can be set up to auto draft money into different investment plans (401k or a child’s 529 college-savings plan).

When your investments are automated, it prevents you from forgetting to transfer money each month. It also eliminates the possibility of using that money for splurge purchases. This is awesome for those of us who are highly susceptible to spend any and all extra money! You’ll also see your net worth increase every single month.

One thing to note, if you have to ever switch banks, you’ll need to set up the auto-drafting again at your new bank. I would try to do this ASAP! I know from firsthand experience how hard it can be to write a check to your savings account or 529 college-savings plan when the auto-drafting isn’t set up. There are moments where you will think, “Wow! I could really use this money elsewhere!”

If I had to write a check every month to my investments accounts, there is a good chance that my investing plan would be seriously off-track. Make it automatic!!

Next Steps
– Set up auto-drafting with your bank (via phone or online) and start automating your investment account(s) , such as a 401k, retirement account, or 529 college-savings plan.
– Recommended Resource ==> OXEN: The Key to an Abundant Harvest – Learn how to maximize your money through investing

5 Basic Steps to Investing – Steps 1

Investing! This is consistently given as one of the most confusing topics individuals face. In this series, I wanted to share some basic investing fundamentals. My goal is to help you understand this topic better and walk away with practical steps.

STEP ONE  Evaluate & Diversify 
Before we begin, you need to assess what investments you currently have. You might be saying, “Joe, I don’t have any investments.” My question to you would be: do you contribute to some type of retirement plan at work, own a home, or own a business? Investing is much more than owning stocks. To start, let’s make a list of all your investments. (A great place to list these investments is on the asset side of the Net Worth Calculator.) Now that you have all your investments listed, lets evaluate to make sure they are diversified.

I’m sure you’ve heard the saying, don’t put all your eggs in one basket. This directly relates to investing! A key step when investing is to diversify your investments. For example, you should not put all your money into one company’s stock, instead spread your investments out. By spreading out your investments you greatly lower the risk of your investment.

You can research countless times where people have put a large portion of their money into one company, only to have that company fail. Several people lost large sums of money when they invested solely in Enron during the early 2000’s and the company went under. If these people would have diversified their investments, they could have softened the blow.

An easy way for you to diversify is to invest in mutual funds. A mutual fund allows you to purchase a portion of many stocks and bonds with a single share purchase. This purchase automatically diversifies your investments, even though you’ve only bought one share! Also, don’t just think stocks. Invest in a new business or a home that can be rented out. Investing is much more then the stock market. You have a world of things to invest in – real estate, land, new businesses, or even your own business!

Next Steps:
– Review your current investments. Are they diverse?
– Are you only investing in one type of company? If yes, take steps to address right away!
– What other investments could you make outside of the stock market?
– Recommended Resource ==> OXEN: The Key to an Abundant Harvest – Learn how to maximize your money through investing

Joseph Sangl’s Current Investments – 2015

Anyone who has attended a Financial Learning Experience has heard me say that it is important to INVEST money and to do so every single time you are paid money. At the end of our live events, I am regularly asked or emailed the following question:

“What investments do you recommend?”

My answer is always, “I don’t recommend specific investments. I can only tell you the investments I own, and they have worked well for me. The investments you choose are up to you.”

Occasionally, I update everyone on the investments I currently hold. Below is a chart of the current investments we hold. If it is publicly-traded, I have included the ticker symbol. Click on the chart itself (or HERE) to see a larger version.

JSInv2015

It is hard to believe that another year has passed by! If you look at last year’s update, you will see quite a change in the allocation of my investments. This is most noticeable in our real estate holdings. This is due to acquisition of more properties as well as the appreciation in the value of other real estate holdings. You can click the pie chart below to see a larger version of the chart.

PortfolioDistribution2015-02JDS

My views of the investing market place:

  1. I anticipate the stock market will continue to grow at a moderate pace. While the current Price-to-Earnings Ratio (P/E) for the overall market is at nearly 18, there are are many reasons to believe that we will see some growth. These include:
    • (a) cash rich companies – I believe we will see a hastening of the investment of these monies through 2015,
    • (b) low interest rates – while the Federal Reserve Board has ceased QE3 and are clearly signaling an increase in interest rates, these rate hikes are going to be low for the foreseeable future, and
    • (c) oil price collapse – while this certainly affects Big Oil stocks, it has an overall economic stimulus effect as it puts substantial dollars back into the pockets of consumers
  2. I continue to believe there will be ample investment opportunities within the real estate markets in 2015. I travel throughout the U.S. and Canada and rarely have I seen construction – both large-scale commercial and residential – at the levels I’m observing right now. It’s only a matter of time before this shows up in the profit statements of the largest contractors.
  3. I also believe there will be ample investment opportunities into new business start-ups and purchase of existing businesses
  4. Worldwide instability has existed since the beginning of time. It exists today. While the problems may change names tomorrow, I’m convinced we will still face worldwide instability tomorrow as well. I believe a great risk is in not investing at all. I will continue to be an investor!

I welcome your thoughts on the investing market place as well. What do you think? What are your strategies?

Read previous installments of Joe Sangl’s “Current Investments” posts HERE.

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