How to be wealthy and debt
free.
How to be wealthy and debt
free.
A college professor on economics said
“You can only spend your money once.” This Idea I really accepted and have
thought about it often. If you spend money on interest, paying to much for
items, buying items you really don't need, gambling, smoking, alcohol or on
rip-offs you'll be and stay financially Poor. You won't have money for what you
need, want or to have money when you retire.
I have carefully spent my money and have plenty for what I need in retirement.
Year after year I am now able to spend nothing on interest. This gives me a 26% increase in money available for purchases I want and need compared to the average American.
I found wonderful advice on how to be wealthy on the web page http://www.debtstowealth.com/ here is the main thrust of the article.
Hard working home owner found the secret to financial independence. It's here for you!
You are at the right place if you want to learn how to achieve true financial freedom and build meaningful retirement income without the need of any additional income.
WHY WE ARE IN TROUBLE?
Did you know that Americans are the most indebted nation in the world?
» Consumer debt is $7.2 trillion and growing.
» 62% of Americans say money is their biggest problem (and it causes more friction in families than any other issue)
» 51% of all Americans have no retirement savings (and we keep hearing that social security will max out before we get old enough to retire)
» The average credit card debt is $8,367 (some of us wish ours was only that much!!)
» The average retirement savings for Americans 55 years and older is $34,000 (which would only yield $1,000 annual income at today's CD rates)
Do you see yourself in this picture?
Think about this. You are giving up more than two thirds of your income to mortgage, credit card, car loan interest and taxes, etc. So where does your money go?
Money Borrowed 16.0%
Interest On Borrowed Money 26.0%
Taxes 29.0%
Total 71.0%
This leaves you with 29% for household expenses, insurance and entertainment. If you are having trouble getting ahead maybe these numbers will give you a clue as to the problem.
A COMMON SOLUTION ...
You see when we have a cash crunch, we look to borrow more money to bail us out. We get new credit card offers almost on a daily basis to tempt us. We're told to take out loans to consolidate our debts. Then there is "the monthly payment trap." The ads tell you it only costs "X" dollars per month, thus diverting your thinking from the real total cost. You can't get ahead that way. You must learn to live within your income to release yourself from this bondage.
IT WASN'T ALWAYS THIS WAY!
When I was a child my parents and their contemporaries had it all backwards. If they couldn't afford it , they didn't buy it. If it were broken , they repaired it. Imagine that! This isn't the case today. The IRS says this is a time of instant gratification. We can't wait until we can pay cash for what we want. Unfortunately for us, we are bombarded every day with marketing messages which urge us to spend money we don't have. The credit card companies, the mortgage companies, the auto lenders and retailers only promote what is good for them, - not you! Another problem is that often the people we turn to for help give us advice that is wrong.
A TERRIFYING EXAMPLE!
Are you aware if you make a $2,000 purchase on credit with an interest rate of 17.9% and only make minimum payments of $31.28 per month, it will take 30 years and 5 months to pay off that debt? Maybe you don't have a problem waiting that long to own the item. But do you realize that you will pay $4,827 in interest alone.
NECESSARY STEPS -
So how do we escape from all these messages and advice that lead us down the path to debt troubles and the accompanying stress. First we have to understand the three steps to true financial independence. They are learn to live within your income, pay off your debts first and the build wealth with conservative investments over a period of time.
"NO INVESTMENT IS AS SECURE AS A REPAID DEBT." --AUSTIN PRYOR
What Austin Pryor, author of "Sound Mind Investing," is saying is that your best investment is investing in your debt. In fact paying off a 15% credit card is the same as getting a 15% return equivalent return in the stock market. Andrew Tobias, author of "The Only Investment Guide You will Ever Need," supports Austin Pryor when he says,"Make no mistake paying off the balance on a credit card is just about the best "investment" you can ever make."
INVEST IN YOUR DEBT!!
How do I go about investing in my debt? Well there is a technique, a system if you will, which will show you the very best way to invest in your debt. With this system you can eliminate all of your debts, including your mortgage in 10 years or less. At that point you can put all the money you are wasting on debt payments into safe investments. I have seen my clients put themselves in a position to build a retirement nest egg of over one million dollars in the same time that it would have to taken them to pay off all of their debts in the normal fashion.
Know how to recognize a Rip-Off
The offers for furniture, appliances and
cars at no interest rate for 2 years and we pay the state taxes sound to good
to be true. In fact it is one of the biggest rip-off. If you do not pay this
loan completely before it comes due they add on 24% interest starting on the day
you signed the contract, add on the state taxes and start charging you 24%
interest until the loan is paid off.
The offer from The collegen Man, to give you
softened water and pure drinking water at $3.54 cents per month, If you just
call, sounds far to good to be true. It is! When they come to your home, they
tell you that you will get that low rate for 3 months and then it goes to 54
dollars per month but they furnish the salt. To get this low price you must pay
$1855 for installation. But they tell you, it would be much better for you if
you bought the equipment outright from them at only $4699, put your own salt in
and pay no monthly fee. What a rip off! I listened to their speech and then
went to Sears and got a larger more effective system for $699. I installed it
my self. That is a savings of $4000.
Kirby vacuum, Speed queen vacuum, Knife,
carpet, kitchen pans, windows, vitamin, siding, phone solicitation and the list
of sales men goes on and these are almost surly to rip you off if you buy from
them.
Pyramid schemes where you get a group of items to sell and try getting your friends to sell so you make a profit on what they sell is a rip off. Most people end up with a large box of items they bought to show other but never be able to sell. Amway is such a pyramid company and of all those I know lost money on this scam that is legal but iffy.
Pyramid schemes where you send money to the name at the top of the list and expect to get back 20 times as much when your name gets to the top of the list is a rip-off. The US Government put out this on Pyramid schemes on the internet. Do check it out http://www.ftc.gov/bcp/conline/edcams/pyramid/ Another very good site is pyramid schemes, chain letters and Ponzi schemes http://skepdic.com/pyramid.html.
In las Vegas they have some gambling machines that pay out as much as 80%. Each time you put money into these machines you can expect to lose 20%. That's a very poor investment. State gambling scratch offs pay out less then 30%. That is a horrid rip-off.
Smoking and drinking can not only harm your health they can keep you poor and miserable.
Christian evangelist are nearly all rip-off artists. They can use what appears to be hypnotizes to get your money. Before you give your money to any church or to any Christian evangelist first pay off your credit card. When this makes you richer you can then give if you must. Most Evangelist have several huge elaborate homes, big diamond rings, and very expensive cars. Ask yourself if he really needs your money.
Oil change services will often try to get you to flush your engine or use some special oil and this is purely a rip-off. GM tell you to change your oil when the message comes up on your dash. This happens about once every 7300 Miles. So don't change your oil every 3000 miles. It's a waste of money.
Oil change places tell me I should have my transmission fluid changed. It can't be done. As an engineer I know most of the fluid is in the torque converter and can't be drained out. Gm says Don't.
Good advice "If it isn't broke, don't fix it."
Most charities are rip-offs. Make sure the charity you give too spends no more than 30% on promotion. you can check this on the internet. ABC Prime time was on as I type this, telling of charities to kids wishes, Firemen's help, Police men's, save the pets and many other charities that pocket 90% or more of what is given them. Police solicitations companies normally pay out 5% and pocket the rest our news paper reported..
New windows for your home is a poor investment if done to save on your heating bill. The US government tell us the most you can save is 10% and that is if you are going from single pane windows. If you want real home energy savings that will pay for them self, go to http://homeenergysaver.lbl.gov/ by our government.
Don't buy a used updated computer as these are normally poor investments.
Don't buy from a high pressure salesman.
Loan consolidation companies are normally a rip-offs.
Don't take a job selling for a rip-off company.
Items you can buy that will increase you wealth.
Remember "Poor people have few books. Rich people have lots of books."
Money alone can't bring happiness, but finding happiness and piece of mind can be a lot easier with lots of money.
Examples of how money talks.
I go to buy a car they offer me a low interest rate or 2 to 3 thousand off the price of the car. I pay cash and that is 2 to 3 thousand less then the average American. I also pay no interest which can amount to a savings of several more thousand dollars.
Examples of Rip-Offs
:
1 I know someone who Signed a contract for carpet at no cost if they only found 12 friends or relation to buy carpet.
I was the first friend the sales man visited. I asked him how much the carpet would cost me if I could find no one to buy carpet. He said we don't give out that information. I said I absolutely wouldn't sign a contract unless I knew the total cost and if he would not give me that figure than leave. He was with me less than 6 minutes before leaving.
Our friends found no one to by carpet and were charged 4 times the going rate for carpet. It came in 3 foot strips. When they steam cleaned it, it shrunk leaving gaps every 3 feet and the tuff wore off almost completely in less then a year in the heavy walked on areas. They took it to court and still paid more then twice the going rate for good carpet.
2 Who went to a bunch of meeting on making money with Amway selling. They ended up not making any money In fact they lost money and ended with a lot of products for demonstration they didn't need or want.
3 Who tried to sell vacuum cleaners and didn't sell any at the inflated price required. He had answered news paper adds and spent many hours learning the selling lessons and trying to sell before quitting.
4Who sent $25 in to a pyramid scam and never got a cent back. He sure tried to get me to do the same.
5Who spent 6 weeks 8 to 12 hrs per day 6 days a week, after answering a news paper ad for a modular home salesman. He made $200. The owner said he sold the homes.
6 I got a window quote and a brochure from a home sales man only to find I could get the same window for half the price and brochure at the nearby lumber yard.
7 Who husband and wife worked at GM and gambled on horses often. They had a very small home in a poor neighbor hood. They sold their home and moved into a trailer in Florida. She died a week later. He didn't have enough money to get back to Michigan.
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