The first step towards a proper financial education…
… is to know how to ask the right questions.
One of the most common questions asked is what the difference is between good debt and bad debt, but most people miss out on asking a much more important question that is the difference between them slaving away and achieving financial independence.
The real question you should be asking is:
“How can I turn bad debt into good debt?”
Most of you reading this right now are in this exact situation; you need to pay off your credit card debt or car loans, but you also want to start investing for the future. Below are FIVE simple and actionable steps you can take to make this transition a reality:
1) Think long-term
If you have credit card debt, be sure to use only one or two of them if you really need to. If any new charges occur, be sure to pay them off before financial charges are incurred against you. The last thing you need is even more compounded long-term bad debt.
2) Expand your income
If I asked you to come up with an additional $150 to $200 a month, would you be able to do it? If you have a solid financial education, this shouldn’t be an issue for you.
While it would be optimal to have money work for you, there are plenty of ways to make money as well such as taking up freelance work.
3) Baby steps
Now that you’re making an additional couple hundred a month, add it to the monthly payment on one of your credit cards. The best way to go about this would be to focus on one card at a time while paying the minimum monthly on your other cards.
Most people try to pay everything at once but it almost never works out!
4) Keep the momentum going
Once the first card is paid off, apply the total amount you were paying each month on that card to your next credit card. You are now paying the minimum amount due on the second card plus the total monthly payment you were paying on your first credit card.
Continue this process with all your credit cards and other forms of bad debt. With each debt you pay off, apply the full amount you were paying on that debt to the minimum payment of your next debt. As you pay off each debt, the monthly amount you are paying on the next debt will escalate.
Just by doing this, you’ll be amazed at how fast you can actually pay off all your bad debts. In fact, most average people who are in huge debts can clear their debts in far less than a decade just by using this strategy.
5) Build your wealth
With no bad debt holding you back, take the monthly payment you were putting towards your last debt, and put that money towards investing. This is where your asset column comes in, and grows, and grows, and grows.
It’s that simple. Want to learn more? Yes you can, at the Business & Investor Summit where you’ll learn these and more!