How to manage your debt
How to Get 300% Return on YOUR Investment.
If you can save $100 per year (that is only $2 per week) and put it into an account earning 10% per year and leave it alone for 25 years.
You have saved $2,500 in direct savings which has earned interest. The 10% Interest is not just 10% on the total savings but you earn 10% Interest per Year on the original deposit PLUS the Interest.
If you only earned Interest on the annual deposit, you would have $2,750 after 25 years but with Compound Interest you will have $10,818.18. This is a profit of $8,318.18 or an average of $332.73 per year for the 25 years.
This is over 300% Return on YOUR Investment of $100 per Year.
This is how the Banks make money from the Credit Cards, Loans, Mortgages, Overdraft and Business Loans. Can you think of any good reason why you shouldn't use this Magic for yourself?
The concept of how to manage your debt, is straightforward and simple. With only two components, INCOME and EXPENSES.
Make your income greater than your expenses and voila! The same for losing weight, burn more calories than you consume. We all know it is not that simple, and there is a lot more to it.
YOU KNOW what to do, but you are still BROKE.
You are aware of the damage that debt can inflict on your family and yourself, you know how to make a budget, you know how to track your spending, and you are well informed about what it will take to manage your debt, to become debt free, and the benefits for doing so. You try; you try again, but with no success.
Why is it so difficult to manage your debt?
Well, do not beat yourself to death, because you are not alone and surely, you are not careless about the future of your family. The economic data show that 80% of the people will never become debt free, and 60% of the ones that succeed will use the help of a professional. Why is it so difficult to manage your debt is the question in everyone mind facing this debt epidemic.
Cannot imagine living a debt free life.
Debt is a virus that has infected not only the way you spend but also the fundamental way you reason and live. With enough time and exposure, this germ will find his route sooner or later deep into your mind. For most of us, we grew up with debt and today cannot imagine living a debt free life. To understand the severity of this matter, you need to know who and what you are dealing with.
Who and what you are dealing with.
The credit industry is owned, controled and operated by some of the most intelligent mind and wealthiest human beings of this planet. The creation of the credit card system was no accident, they spend years studying and planning the concept. They spend millions in Washington to deregulate the banking industry.
Congress gave them the green light.
They got a big break about 30 years ago when congress started loosening the rules to make borrowing money available to the middle and lower class of America. Before that, credit and credit card in particular was for the elite of the society. Like the original Dinners Club was a card of prestige for the upper class, accepted in 27 of the best restaurants.
Addictive and was designed to be.
From that point, these companies started a vicious and furious campaign to promote their products. With this system in place, the customers became able to satisfy their present needs, and worry about the future later. By separating the action of: BUYING and PAYING (uncouple) the credit industry went for the kill. Use all the psychosocial tools to manipulate our inner mind.
Fully aware that the vast majority of people will not be able to manage debt and will succumb to the temptation of buying something they desire even when faced with the reality that they will not have the money to pay it back. Furthermore, this technique will diminish the true value of the money we spend (only in our mind).
A major factor, which surely makes it easy to over spend and put us deeper in debt. Finally, the credit score system (fico) is a chain firmly attach to our ankle. In plain English, they knew it was addictive and was designed to be.
MIND, EMOTION, MOTIVATION.
Now that you understand why it is so difficult to manage your debt and try to become debt free. You must also realize the impossibility to begin without the capability and the ability to manage oneself. There are three major aspects that are indispensable. MIND, EMOTION, and MOTIVATION.
All three of them must be understand, corrected, and controlled before you can start to manage your debt, and become debt free.
What is debt ? It is a question that everyone believes they know the answer. In fact, very few of us really know and understand what debt is.
WHAT IS DEBT; it is what you owe.
The result of what you borrowed or service use, a credit that is outstanding. Debt is when a friend, a family, or a finance company lend you a sum of money or pay for the asset that you want to purchase and expect you to pay later.
The pure conception of debt is good, if the intention is to help the borrower. Unfortunately, in our society there is a price to pay for this service.
Debt is not the problem, interest is!Interest is a fee paid for the use of borrowed money, it is compensation to the lender!
The word interest came from the Latin word usuria, “interest” or “excessive interest”, and in many places around the world, the word usury came to mean the charging of very high rates of interest.
A lender can become a usurer (loan shark) by charging excessive rates of interest. A credit card with 29% interests rates, the sub prime mortgage; qualify the lender as a usurer.
Debt is condemned.
A great number of religions, religious leaders, and philosophers in the ancient world denounced usury/debt for its economics abuses, mostly of the masses and the poor. Plato, Aristotle, Cato, Moses, Mohamed, Jesus, and many others spoke boldly about this practice. In the Middles Ages, a Jew was not allowed to charge interest to another Jew, but acceptable to a gentile.
According to the book of Ezekiel, one of the worst sins is the charge of interest. Any kind of debt is forbidden in Islam. According to the bible, the rich rule over the poor, and the borrower is slave to the lender. So what is debt? See why so many are against debt?
Debt in numerous countries and cultures is regarded as dishonorable
Debt and slavery are closely related throughout our past and present, where the lender is master, and the borrower is of course the slave. At different times and places in history we came up with divers’ ways and names, rules and techniques; but the fundamental remain the same.
Any one that takes a good look at the evidences, will notice that debt as we know it today is similar to the indentured servants of the 17th and 18th century. The reasons that compel the individual are different, but the effects are the same.
Different time, different techniques.
What is debt, when people are desperate for something.
If you go across the border into Mexico, or many other places around the world. Where some people are desperate to come to America.
Charge them a large sum of money that they cannot afford. Finance the trip and make them sign a contract to work for you for three years.
The world will say that you are using your money as a bait to entice people and turn them into your service. You cannot do this, this is illegal, this is indentured servants.
If you establish a bank ready to finance the gamblers in a casino, or finance a house to a single mother with a mortgage that is 60% of her income, or offer a credit card to a 18 year old that have not yet worked a day in his life, the world say it is OK.
I believe that you are using your money as a bait, to entice people and turn them into your service. What is debt, if it's not slavery?
DEBT IS BONDAGE.
The masters do not discriminate against race, religion, sex, or ages. In addition to the Africans slaves, many Europeans including the Irish, Scottish, German and even English men, and women were brought over as indentured servants most of them were recruited from the poorest urban area of Europe. It was a way to finance their passage to the Americas in the pursuit of a better life.
Their treatment was not any different from the Africans slaves except the period was fixed according to their contract, and they were not forced physically to sign up.
From the beginning of the world, humans always look for ways to make other humans work for free; it is not about to change soon.
Debt is here to stay.
In the 21st century. The game between master and slave is still at play throughout the world and right here in America. The masters can no longer force someone physically to serve them, but they have multiple ways to enslave fellow human being mentally.
Debt is what balances the world between rich and poor, the lender and the borrower or the master and the slave.
Until we can put an end to poverty, Ignorance, laziness, envy, greed, prostitution, and illegal drug, and debt is here to stay.
How to get out of debt.
1. Step 1 Start by collecting all of your bills and categorize them. You can do this by dividing the total amount due by your monthly payment. Then, put them in order by that number, greatest to smallest. This will be the order in which you will begin to eliminate your debt.
2. Step 2 Now, try to find a way to invest more money towards paying off your debt. This can even be $1.00 more than the minimum due. The more money you can put towards your debt, the quicker you will be out of debt. Here is how to do it...
3. Step 3 Take the bill that is first on your list and pay the minimum amount due, plus whatever extra money you have to put with it. Then, pay all of your other bills as usual, with the minimum payments only. Continue to do this until that first bill is paid off.
4. Step 4 Next, after the first bill is paid off and gone, start paying bill in spot #2 with its minimum payment, the extra money, plus the minimum payment from bill #1. Continue to pay all of your other bills as usual with their minimum payments.
5. Step 5 = After bill #2 is paid off, pay bill #3 in the same fashion, with its minimum, the extra money, and the minimum payments from bill #1 and bill #2. See the pattern!!! You will be debt free in no time if you follow this simple plan. Plus, you really do not need that much extra money in order to do it!