If you have debt, turn it to your advantage. Few people realize that debt can springboard you to wealth. We share an example of this on today’s podcast.
On The BIGG Success Show today, we talk about how to get out of debt.
This show is inspired by a recent report on consumer debt levels by the Federal Reserve Bank of New York. It shows that household debt in the U.S. hit a record high in the first quarter of 2019, up 8% from the previous record reached in the third quarter of 2008.
So if you’re in debt, you’re not alone. But debt can be good or bad. We believe debt is a tool. So today, we show you how to get out of debt and then, how to use debt to your advantage – to turn debt into wealth. Here’s a summary of that discussion…
We want to share an example with you today, so you can see how debt can springboard you to wealth. Once you’ve listened to this show, check out our new FREE resource: How to Get Out of Debt in 3 Easy Steps.
Assume you have the following debts:
Further, assume the interest rate on each loan is 10%, which means you will never get out of debt because all your payments are just enough to cover the cost of interest. Sounds horrible, doesn’t it? Yet credit cards interest and minimum payments work similarly.
Find $10 in your budget
Just $10! We call this Freedom Money! It’s the small investment you need to make to achieve financial freedom.
Add this Freedom Money to the $10 payment on Loan 1. So, your next payment on Loan 1 will be $20 ($10 as planned + $10 of Freedom Money). All other loan payments remain the same.
Keep paying the $20 until Loan 1 is paid off. Then roll the $20 payment into paying down Loan 2. So you will pay $40 a month ($20 as planned + $20 roll over from Loan 1) until it is paid off. Once Loan 2 is paid off, repeat this process for the other loans.
In this example, you would pay off all your debt in 2 years and a month (25 months). But we’re not through yet…
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Go from paying off debt to creating wealth
Once you’ve paid off all your debt, roll in all the payments into investing. Month after month, your nest egg grows. Instead of creating wealth for your lenders, you’ll be creating wealth for yourself!
How long does it take to see results?
Loan 1 will be paid off in 8 months. As mentioned previously, it will take just a little over 2 years to get out of debt.
You could expect your investments to total…
$6,234 in 5 years (assuming a reasonable 8% return on your investments)
$20,383 in 10 years
$189,366 in 30 years
And here’s the important thing to remember:
You only changed your lifestyle by $10 a month!
Of course, if you have more than $1,500 of debt (which most people do), $10 won’t make such a difference. But the good news is:
You can quickly and easily find more Freedom Money with our Financial Freedom Tool.
More good news: If you have more debt and find more Freedom Money, you can build an even larger nest egg!
Little changes lead to BIGG success!
FREE Get-Out-of Debt Plan
Here’s to your BIGG success!
George “The Professor” & Mary-Lynn
Co-Founders, BIGG Success
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