by David DeFord
What keeps the most people from developing wealth?
What is the greatest obstacle to retirement?
If you could eliminate one thing to position yourself for financial peace and security, what would be?
to each question above is debt!
Imagine the freedom and peace you would feel with no debt!
Imagine the small portion of your paycheck you would need to meet your needs and obligations if the all of your earnings were available
Think about the savings, investments, and charitable giving you
The safety of your family may depend upon your attention to your debt. It has been estimated that 89% of all divorces can be traced to quarrels and accusations over money.
What will it take to convince you to finally resolve to become
Will you need to be cornered by a creditor?
Will you have to be publicly embarrassed?
Or will you respond to a milder stimulus, like the frank advice
of a friend, or an article like this one?
It's not the amount of money we earn that brings peace of mind as much as it is having control of our money. Money can be an obedient, productive servant, or a brutal taskmaster.
Success has a way of passing by those who have not the discipline
to handle it. Through our healthy respect for money, we can attract
Compounding interest is your enemy. It robs you of your working funds. Tony Robbins taught about the power of compounding by comparing it to a small , friendly wager on a golf course. Say that your golf partner suggested a small 10 cent bet per hole. You think, "Well, that means that only $1.80 is at stake." So, you agree. Then, he suggest that you double the bet on each subsequent hole.
Here's how it would go, if your partner wins each of 18 holes:
One the first hole you lose a dime. On the second, you lose twenty cents. When you add the dime from the first hole, you're down only 30 cents. Big deal!
The third hole is worth forty cents, the fourth only 80 cents. Not too bad.
But now watch what happens:
Hole five is worth $1.60, sixth $3.20, seventh $6.40, eighth $12.80, and the ninth $25.60.
When you add up your losses on the first nine, you realize you are down $51.11.
Once you have finished your game, you will have lost what, maybe $150?
Actually, because of compounding you will owe $19,660.80.
Now, your debts probably haven't interest rates that high, but the principle is the same--if you pay only the minimum payments on your debts, you will pay them for years and years. You will pay many times the actual principle you spent in the first place.
So, what will it take to eliminate your debt?
First, you will need to determine why you are in debt in the first
Don't spend time on the external reasons--they are excuses.
What inside of you built your debt?
Generally, the internal reasons center on the need for immediate
gratification. Rather than saving your money for furniture, cars,
or vacations, did you borrow for them? Distinguish between need and want.
Maybe you wanted to keep up with the living standard of your friends
Or you frequently make purchases on impulse.
Search your heart deeply. Discuss your debt situation with your
spouse. You can't make the needed changes without his or her help.
Maybe he or she sees more clearly than you the internal cause.
Make a Plan
After you have identified the internal cause, make a plan to conquer
Make a budget, make a goal. Decide how you will reduce your spending
enough to attack your debt.
Some people think a budget robs them of their freedom. On the contrary, successful people have learned that a budget makes real economic freedom possible.
Think of your debt as a cancer. You must first eliminate it's spreading,
and then you must eradicate it. Use invasive treatments to kill
Use the snowball technique.
1. Identify your smallest debt (debt one).
2. Pour every available cent each payday into paying down that debt.
Pay the minimum payment on the other debts.
3. Once you have paid off that first debt, identify the next smallest
one (debt two).
4. Add the amount you had been paying on debt one to the minimum
of debt two, and pay that amount.
5. Let the snowball grow with each debt you eliminate.
As you continue, your snowball will get huge, and your progress
will seem to multiply.
Keep a chart of your progress.
Plan ahead how you will celebrate the successful elimination of
each debt along the way. But don't celebrate in ways that would
slow your progress.
Be tenacious. Don't let anything get in your way.
Once you have achieved your desired end-financial freedom, resolve
to never have debt again--keep budgeting.
You can then begin the delightful opportunity to use your excess
earnings toward building wealth, enjoying the fruits of your labors,
and preparing for your retirement.
You can do it-start today!
"If there is any one thing that will bring peace and contentment into the human heart, and into the family, it is to live within our means. And if there is any one thing that is grinding and discouraging and disheartening, it is to have debts and obligations that one cannot meet."
Heber J. Grant
Well, to be financially wealthy, all you've got to do is this: Spend less than you earn.! ....Spend less than you earn and invest the difference."
I remember saying to my mentor, 'If I had more money, I would have a better plan.' He quickly responded, 'I would suggest that if you had a better plan, you would have more money.' You see, it's not the amount that counts; it's the plan that counts."
"The most important habit you can develop to achieve financial independence is the habit of frugality. Carefully consider every expense before you make it. If possible, delay a large purchase for a day, a week, a month, or even longer. Take that time to think about it before you commit. When you put off a major purchase decision for any period of time, you often end up ont making it at all."
"Debt can be a terrible thing. It is so easy to incur and so difficult to repay. Borrowed money is had only at a price, and that price can be burdensome...."
"The purpose of a budget is to help thy purse to fatten. It is to assist thee to have thy necessities and, insofar as attainable, thy other desires. It is to enable thee to realize thy most cherished desires by defending them from thy casual wishes. Like a bright light in a dark cave thy budget shows up the leaks from thy purse and enables thee to stop them and control thy expenditures for definite and gratifying purposes."
for Dummies by John A. Tracy
Not everyone is cut out to be a professional accountant. But thanks
to Accounting For Dummies, 2nd Edition you can get a handle
on the financial aspects of your business, investments, or taxes.
Accounting professor and author John A. Tracy sheds light on the
-- Generating income statements and balance sheets
-- Establishing budgets, controlling profit and cash
flow, stemming losses, and managing inventory
-- Evaluating profit margins – and identifying ways
to increase them
-- Making financial decisions that keep investors,
creditors, and managers satisfied
-- Reading financial reports
-- Surviving an audit and using the results to improve
your accounting system
-- Putting the latest computer technology to work to
help you manage the bottom line
If you've steered clear of accounting because you thought it incomprehensible
by mere mortals, prepare to be enlightened. Accounting For Dummies,
2nd Edition empowers you with knowledge you can't afford to be without.
the Easy Way by Peter J. Eisen
Useful as either a self-teaching guide or a supplement to classroom
textbooks, this book presents the fundamentals of accounting, starting
with the accounting equation, then explaining financial statements,
recording daily business transactions, using special journals, accounting
for receivables and payables, and accounting for assets, inventories,
and payroll from the viewpoint of a sole proprietorship form of
business. Final chapters cover partnership and corporate accounting.
Within every chapter, self-testing exercises follow each topic with
detailed solutions presented at the back of the book. Barron’s Easy
Way books focus on both practical and academic topics, presenting
fundamental subject matter in clear, understandable language. Equally
popular as self-teaching manuals and supplementary texts for classroom
use, they are written to help students improve their grades and
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general readers to a new career-related skill. Easy Way titles cover
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college-101 levels. Subject heads and key phrases are set in a second
Living for Dummies by Deborah Taylor-Hough
Tips to help get the whole family involved in saving money. The
helpful guide to living the good life on less. Need help keeping
that New Year's resolution to eliminate credit card debt and live
within your means? Then Frugal Living for Dummies is for
you! Packed with tips on cutting costs on everything from groceries
to gifts for all occasions, this practical guide shows you how to
spend less on the things you need and save more for the things you
Finance for Dummies by Eric Tyson
Do you need help managing your financial priorities? Relax! This
friendly guide, now updated to include changes to the tax code,
gives you just the information you need to take control of your
finances, buy the right insurance coverage, and weather economic
downturns. Guide to saving more, investing wisely, and planning
for the future. Revised and updated to include changes to the tax
and Grow Rich by Napoleon Hill
First published in 1938, this personal development classic helped
spawn the motivational genre. The principles still apply. While
the title subject is about gaining wealth, the book, in fact, has
more to do with taking control of your thoughts, and therefore your
-- David DeFord
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