A New Way to Build in Your Wealth - Invest in Your Debt!
It's pretty discouraging to a recent college graduate who finds a great job but is using most of his paycheck to pay off those high interest credit cards and college loans he built up while in school.
What happened to the idea that he would have the money to "pay himself first"?Invest in a 401-K at work, who are you kidding?Where's the money coming to come from? Well, let's turn that outlook around and come up with a plan.
Investing in your debt is a new way of thinking.
Have you ever used those on-line calculators to figure out what kind of money you are actually paying for that plasma TV once you tack on that 18% interest rate? How about the card that has the 16% you're paying on all those meals you ate out while you were in college? Sure, with your new job, you are still able to pay the minimums but at the rate you're going, it will take YEARS to pay for that TV and meals plus just think of what you could have used that money for!! First, you need to educate yourself.
Have you read any books lately other than the ones you HAD to for your college degree?Head to the local Barnes and Noble, take a pen and paper, and grab a comfortable chair.
Find the Personal Finance section and get a book by David Bach or Suze Orman.
Both of these financial gurus have a wealth of knowledge about getting out of debt, staying out of debt and building your wealth! Jot down some notes on ideas you see that could work for you.
Do you have 3 credit cards plus 2 college loans?Which ones have the highest interest rate?List them in order with the highest interest rate first and loan amounts.
Make a plan to pay more than the minimum on the highest interest rate debt first.
How much extra can you afford to put toward this debt?Even $50 would be okay but better yet, how about $100?Do this for 3 months and watch that debt dwindle away.
Once that debt is gone, take the amount you were paying and start adding that amount to your minimum on the next highest interest rate debt.
How is this investing in your debt?Well, think of it like this.
You're paying 18% interest on that credit card.
If you can get this debt paid off quickly, you have SAVED or INVESTED that much toward your future.
Wouldn't you rather take that money and put it toward saving for a house? You'll find that the quicker you pay more the minimum, the faster you are building your wealth.
What happened to the idea that he would have the money to "pay himself first"?Invest in a 401-K at work, who are you kidding?Where's the money coming to come from? Well, let's turn that outlook around and come up with a plan.
Investing in your debt is a new way of thinking.
Have you ever used those on-line calculators to figure out what kind of money you are actually paying for that plasma TV once you tack on that 18% interest rate? How about the card that has the 16% you're paying on all those meals you ate out while you were in college? Sure, with your new job, you are still able to pay the minimums but at the rate you're going, it will take YEARS to pay for that TV and meals plus just think of what you could have used that money for!! First, you need to educate yourself.
Have you read any books lately other than the ones you HAD to for your college degree?Head to the local Barnes and Noble, take a pen and paper, and grab a comfortable chair.
Find the Personal Finance section and get a book by David Bach or Suze Orman.
Both of these financial gurus have a wealth of knowledge about getting out of debt, staying out of debt and building your wealth! Jot down some notes on ideas you see that could work for you.
Do you have 3 credit cards plus 2 college loans?Which ones have the highest interest rate?List them in order with the highest interest rate first and loan amounts.
Make a plan to pay more than the minimum on the highest interest rate debt first.
How much extra can you afford to put toward this debt?Even $50 would be okay but better yet, how about $100?Do this for 3 months and watch that debt dwindle away.
Once that debt is gone, take the amount you were paying and start adding that amount to your minimum on the next highest interest rate debt.
How is this investing in your debt?Well, think of it like this.
You're paying 18% interest on that credit card.
If you can get this debt paid off quickly, you have SAVED or INVESTED that much toward your future.
Wouldn't you rather take that money and put it toward saving for a house? You'll find that the quicker you pay more the minimum, the faster you are building your wealth.
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