Pay Off Debt – Part 01
I have found that a vast majority of those who sign up to attend the Financial Freedom Class or the Financial Learning Experience are living paycheck-to-paycheck AND carrying debt. In fact, statistics from surveys I have recently conducted show that 72% of those attending my classes are living paycheck-to-paycheck. Of those 72% living paycheck-to-paycheck, 24% are BEHIND on payments.
Only 3% felt that they are doing well financially.
This is a NATIONAL problem. No matter where I go, I see the trappings of debt – marriages failing, stress, depression, and hopelessness. And all of this is happening in the wealthiest country on the planet! This is entirely unacceptable!
So, as part of my crusade to help America become debt-free, I am going to share the process I followed to become debt free.
Before I get started, I want to ask you these questions.
- Would you join me in my crusade?
- Would you share this with others?
- Would you commit to become debt-free?
I WANT YOU TO BECOME DEBT-FREE!!! It changes your life! It enables you accomplish far more than you ever thought possible with your personal finances! It allows you to go do exactly what you were put on earth to do – regardless of the income!
Step 1 – Understand WHY you want to be debt-free!
I believe this is the most important step in becoming debt-free! In the hundreds of financial counseling sessions I have held, it is amazing how many people do not have a plan for their lives.
I ask them, "Why do you want to win with your money?" and they stare at me like I am from outer-space.
"Why?", they stammer back at me.
Seriously, I believe that it 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 – IF YOU AIM AT NOTHING, YOU WILL HIT IT EVERY SINGLE TIME!
When Jenn and I wrote down our hopes and dreams on paper, it opened our eyes to the fact that our money management (or lack of) was literally ROBBING us of our future! We wanted to move back to Anderson, SC 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 $755 PER MONTH going out to pay car debt, credit card debt, and student loan debt. Add in the stupid house payment, and I had over $1,700 per month running off to make the bank wealthy!
By writing out our hopes/dreams on paper, Jenn and I were motivated to manage our money differently. It caused us to view debt differently.
Are you ready to get rid of your debt?
Take your first step today by print out THIS FORM and filling out your own 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 hopes/dreams is for you to become debt-free!
Question of the Day: What has kept you from attacking your debt?
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Credit Cards
I love credit card offers. They are packaged so well.
- Slick-looking logos and card designs
- Use of flattering language like "pre-approved", "Platinum Credit Card Benefits", "Financial Benefits", and "Invitation"
- Urgency – "This is a limited-time offer!" They fail to mention that the time is only limited by Jesus' return to Earth (could be tomorrow – maybe they are right!)
- "Fixed APR"
Sounds great, right? WRONG!
Let me share some direct quotes from the same offer.
- "We reserve the right to change the account terms for any reason" In other words, "Dear Customer – You have NO rights!"
- "We allocate payments at our discretion. This means, for example, we will allocate payments to pay off your 0% introductory APR balances before higher APR balances." In other words, "Dear Customer – We are going to stick it to you!"
- Regarding "Fixed APRs", the small print states "The APRs for this offer are not guaranteed; APRs may change to higher APRs, fixed APRs may change to variable APRs, or variable APRs may change to fixed APRs. Any changes will be in accordance with your account agreement." What? A "Fixed" APR is not fixed?!!! And regarding the fact that changes will be in accordance with the account agreement – the agreement is that the credit card company can change the account terms for any reason!
Another story of life-change was released on the podcast today! Have you listened to the Podcast from Joe? To subscribe to the podcast using iTunes, click HERE. If you do not have iTunes, you can download an mp3 by clicking HERE.
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Investing – FUN with mutual FUNds
Anyone who reads this blog with regularity knows that one of the key reasons I want you to become debt-free is so you can invest more! Investing means that Jenn and I will be able to achieve many of our hopes and dreams! It means that our current sacrifice will allow us to purchase financial freedom for our future! (Perhaps the number of “!” indicates my level of excitement about this!!!
Well, one of the most common questions I receive is “What mutual funds do you recommend?”
My answer is always, “I don’t recommend mutual funds. I can only tell you what ones I own. What you choose is up to you.”
So today, for those inquring minds who want to know, I am publishing some of the mutual funds/investments that I own.
As I prepared this list, I realized several things:
- We have too many accounts. We have a rollover 401(k), rollover 403(b), 529, Roth IRA, 401(k), and a SIMPLE IRA.
- I am OK with some risk, but for some reason or other I have purchased some bond funds. Maybe that is part of my inner-security needs bleeding out … ?
- I can’t tell you exactly why I own all of these funds – that CAN’T be good. I really hold to the belief that I should not own anything that I can’t tell you exactly why I own them.
Do you have any funds that you really like that you think I should be considering?
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Book Review: The E-Myth
I was talking to my friend who visited over the weekend and he mentioned this book called The E-Myth.
I borrowed the book from another friend on Monday and completed reading it on Wednesday. It is a great book for small business owners or anyone contemplating starting a small business.
A key reason that this book applies to me is the fact that I really want to help over 100,000 people accomplish far more than they ever thought possible with their personal finances by October 2011. This will require a humongous team effort!
Here are some things I am taking away from this book.
- The same thing that prompted me to write THIS is what will enable this effort to reach 100,000 people. I certainly can not do it all!
- Great doers don't necessarily make great leaders.
- Putting together a structure and a system always trumps "flying by the seat of the pants"
- Consistency in the overall "experience" is HUGE
- Following the system – everyone following the same system and protocol leads to this consistency
- Great people have a vision of their lives that they practice emulating each and every day.
- I want to go to the hotel the author mentions in chapter 15.
Well worth the few hour read!
Tony also offers his takeaways from this book HERE.
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I want you to be 100% debt-free
Anyone who has read this blog knows clearly that I want you to be debt-free – including the mortgage!
Think about that for a minute … Debt-free INCLUDING the house. How much money goes out to pay debt and the house every month? For the average family it is somewhere between $1,000 and $3,000 every month! What would you do with that money if it did not have to go to service that debt?
A www.JosephSangl.com Financial Hero, David Bach, recently wrote an article on Yahoo! Finance about "How to save big on your mortgage".
In the article, David makes a fantastic statement. David writes …
I'm often asked if it makes more sense to prepay a mortgage or invest the money in stocks and bonds. Rather than ponder which asset will get you a higher return, I think the better question is which investment decision will free you financially and allow you to retire earlier.
In my 9 years of experience as a financial advisor for Morgan Stanley, the clients who paid their debts off early — specifically their mortgages — retired 5 to 10 years before those who didn't.
I ran the calculations for a $150,000 30-year mortgage with 6.0% interest:
I just love the idea of all of us reading this blog being debt-free including the house!
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