Cruising on Easy Street

Posts Tagged ‘debt’

Cruising on Easy Street

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I know some of you may be thinking: “I don’t even have to be a millionaire. I’d settle for just being on Easy Street.” You know what Easy Street is, I assume. It’s not in the land of make-believe. Easy Street, after all, is the place where we all long to be. It’s just that we might have different names for it. Call it what you like: being “well off,” enjoying “a comfortable retirement,” or just “having enough money.” For each of us, Easy Street represents that financial signpost where we can finally breathe a sigh of relief and shed all the past worries and insecurities about the things we couldn’t have, couldn’t do, or couldn’t experience simply because of a lack of money. For some of you, you’ll know you’ve made it to Easy Street when you reach a financial milestone you’ve been targeting: such as having a million dollars in the bank. But for others, the realization that you’re on Easy Street won’t be because of some financial landmark you’ve hit, but rather because of the way you feel about your financial situation, and what you’re able to do as a result of having made some smart money moves.

For instance, have you longed to start a business but didn’t have the startup capital to get your new venture off the ground? Have you wished you could quit your job, but you remain shackled to it because you need the paycheck? Or maybe you’ve just been hoping for the day when you don’t have to juggle so many bills, and decide which ones to pay and which ones to skip this month. Does any of this sound familiar?

The Millionaire Success Formula

Well, whatever your goals and dreams, rest assured that you can get to your own special Easy Street – and even better, you can achieve millionaire status – if you’ve got the right road map, and if you follow the right path. Actually, there are seven paths – or what I call seven “universal wealth principles” – that will guide you to millionaire territory. Think of these principles as the fundamental steps you must master in order to navigate your way to millionaire’s row. Before I explain how you will do that, let me first summarize these seven steps to long-lasting riches. Together, these make up the “Millionaire Success Formula:”

1) Make a personal prosperity plan.

Develop a millionaire’s budget; written goals; and a financial policy statement
Realize that financial success doesn’t happen by luck

2) Invest first, last and always in your reputation.

Build perfect credit
Understand how having a stellar name is often better than cash in the bank

3) Live like a lender, not a borrower.

Achieve Zero Debt
Decide to collect interest, not pay it, for the rest of your life

4) Leverage the power of property.

Ramp up with real estate
Use hard assets and other people’s money to build riches

5) Increase your fortune with proven methods not shortcuts.

Buy stocks, bonds, and alternative investments when prudent
Avoid fads, scams and Wall Street long-shots

6) Overcome setbacks and minimize risks to your financial health.

Make insurance a top asset
Protect yourself against the Dreaded D’s: downsizing, divorce, disability, disease, and death in the family

7) Never forget the next generation.

Create wills, trusts, personal and business succession plans
Establish a wealth legacy

Excerpt from The Money Coach’s Guide To Your First Million.

Make A Personal Prosperity Plan

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Author: The Money Coach

I have a confession to make: I’m a financial Dr. Jekyll and Mr. Hyde. That might sound strange coming from someone who’s about to tell you how to bank your first million. But it’s only right that I let you know from the start that there are two sides to my personality when it comes to money.

I’ve amassed great wealth – while at other times accumulating tremendous debt. I spent a decade building a six-figure investment portfolio, only to fritter it away in a year’s time. I didn’t blink an eye to pay $30,000 a year in tuition for my children’s education – when they were just three and five years old. But I’d be loathe to drop $3 on a soft drink while dining out at a restaurant. So for better or worse, I admit that there’s a “virtuous” side of my money personality and a “reckless” side as well. Thankfully, the “good” side wins out far more often than not. That’s the part of me that likes reading business newspapers and magazines, that takes pleasure in saving money and watching it grow, and that actually enjoys tackling financial chores such as doing my taxes or updating my will. Geeky, I know. In other words, that’s the Dr. Jekyll in me.

But you do remember what happened in Robert Louis Stevenson’s classic tale, right? Dr. Jekyll creates a potion that suppresses his “good” side and lets down his inhibitions. This gives his “evil” side free reign. And each time Dr. Jekyll drinks the potion, the evil Mr. Hyde grows increasingly powerful, while the normally sensible and good Dr. Jekyll becomes weaker and more fearful. While Dr. Jekyll ultimately discovers that he can transform himself back from being a fiendish monster by drinking the potion again, his actions raise two interesting questions, namely: Is there a good and dark side lurking in all of us? Also, can you control the “bad” parts of your personality once you’ve indulged them – or will you always be a slave to them? Excerpt from The Money Coach’s Guide To Your First Million – Now in paperback.

How to Get Out of Debt

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Author: The Money Coach

If one of your personal or financial goals is to get out of debt this year – or at least eliminate your debt as soon as possible – now is a great time to get started. Becoming debt-free takes work. But it doesn’t have to be an overwhelming chore.

Simply following proven strategies below to knock out your debts sooner rather than later:

1) Write down all your debts.
To get a clear sense of your finances, you really need to know exactly how much you owe, to whom, and how much interest you’re paying on your debts. You don’t want to guess about debts. Do you owe $5,900 or is it more like $9,500? Getting your bills listed in black-and-white is a sure-fire way to simplify your finances and see where your cash is going. To get a jumpstart on this process, download this free form called “I Debticate Myself to Being Debt Free.” It will help you list all your debts.

2) Call your creditors and negotiate your interest rates.
Even though banks have been raising interest rates during the credit crunch, in 2010 you’ll have more power to negotiate with your creditors. Why? Starting February 2010, key provisions of the Credit Card Reform Act begin. Among the changes: credit card companies can’t retroactively raise your interest rate on an existing credit card balance – unless you’re 60 days or more late paying your bill. Even if your rate has been raised to a “default” rate, the new law restricts creditors to hitting you with that higher for just six months, if you pay on time. So every six months or so, starting today, call up your creditors and ask for lower interest rates. Often, credit card companies will lower your rate on the spot, simply because they don’t want to lose your business to another company offering lower rates. If you can knock down the interest rate on a card with a 21% interest rate to 12% or so, you’ll be saving yourself a lot of money. Your minimum payments will also be less each month.

3) Pay your bills online.
Another benefit of the credit card reform law is that, starting February 2010, banks and other credit card issuers will be banned from charging fees to customers who pay their bills via the telephone or the Internet. So if you’re not already doing so, set up your credit cards to be paid electronically. Online bill payment is a great service for busy people. Use it as a time saver to pay those fixed monthly expenses, such as your mortgage, car note, or insurance payments. Online bill payments also helps ensure that you don’t forget to pay bills, which can result in late payments or negative marks on your credit report.

4) Pay more than the minimum amount due.
Don’t fall into the minimum payment trap. Minimum payments in the short run really mean maximum payments in the long run. To avoid paying exorbitant amounts of interest and being in debt for life, you must pay more than the minimum balance due. If possible, try to pay 2 to 3 times the minimum payment.

5) Use more cash than plastic.
Before you go shopping for anything this year, even groceries, hit the ATM first – armed with your budget and your “need” list so that you don’t buy more items than you planned, or purchase items priced higher than you should be spending. Take out exactly the maximum amount you’ve determined you can afford and will need to purchase your items of necessity (not just the items you want, but the items you “need”). Later, when you are out of cash, that’s it. Leave the mall or whatever store you’re in. Resist the temptation to whip out plastic to buy more stuff.

6. Get financial help with debt
Having lots of credit card debt lowers your credit score and forces you to live paycheck to paycheck. So if you’re struggling to pay off debt, and nothing you’ve tried has worked, consider getting help from a trustworthy credit counseling agency. One reputable resource is the National Foundation for Debt Management, a non-profit agency that negotiates with creditors, gets your interest rates lowered, and creates a plan to quickly get you out of debt.

7. Use a tax refund to pay debt

If you’re expecting a tax refund, or any other financial windfall, apply it to pay down your credit card debt. It was money you didn’t have the day before so don’t use it on luxuries. If your refund can pay off any one of your credits cards in full, pay it off. It will be one less bill you’ll have to worry about. Paying off a card will also help raise your available credit, which, believe it or not, helps to raise your credit score.

By using these techniques, you’ll be out of debt in no time.

How To Ease Your Student Loan Burden

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Author: The Money Coach

As many college students look forward to graduating this spring, one thing many of them aren’t looking forward to is starting to pay off their student loans.

Staying current on college debt payments is serious business, especially since defaulting on a student loan can result in a host of problems, ranging from wage garnishments and blemishes on your credit report to difficulties landing a job.

But if recent data are any indication, an increasing number of cash-strapped students are being saddled with these issues — and the problem is only likely to get worse.

For starters, the volume of student loan debt including federal and private loans — is expected to top $1 trillion for the first time ever in 2011, according to Mark Kantrowitz, publisher of FastWeb.com and FinAid.org. Kantrowitz is perhaps the country’s best-known expert on student loans and college financing.

Additionally, student loan delinquencies and defaults are on the rise. The latest figures from the Department of Education indicate that roughly 7 percent of all federal student loans are in default — meaning the borrower has missed at least nine months’ worth of required payments.

Yet many observers believe the government’s 7 percent figure is vastly understating the extent of the student loan burden on borrowers.

In March 2011, the Institute for Higher Education Policy issued a report called “Delinquency: The Untold Story of Student Loan Borrowing,” which put the student loan default rate at a substantially higher rate of 15 percent. Equally troubling, the report concluded that: “A total of 41 percent of borrowers faced the negative consequences of delinquency or default.”

“It is important to recognize that for every borrower who defaults, there are at least two others who were also delinquent on their student loans, but successfully avoided default,” the report states.

Continue reading Lynnette’s article: How to ease your student loan burden

Prove It To Yourself That You Can Be Debt Free

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Author: The Money Coach

Prove Yourself to Yourself

To prove that you’re serious about getting out of debt, right now pick a day and time – a minimum of one hour a week — to devote to your finances. Plan to use one of three methods: spend 1 hour straight on money matters; set aside two 30-minute periods of time to handle personal finance issues; or set aside three chunks of 20 minutes for this task. Decide right now what day you’ll do it. Some suggestions: Spend 20 minutes in the morning, 20 minutes on your lunch break, and 20 minutes in the evening one day a week, such as Wednesday. Or pick a day over the weekend, like Saturday, when you can devote an entire hour, uninterrupted, to the task.

OK, now you’re really on the road to being debt-free and becoming and millionaire. But wait a minute, you’re not done “proving” yourself – or shall I say proving to yourself – that you’re serious about bettering your financial world. Now make a list of three money matters in your life that you want to get proactive about and immediately address. It may be that you need to pull your credit report and FICO score, enroll in a personal finances course, or make an appointment with a financial planner. Whatever it is, go ahead and do all three things – or at least start the process for whatever needs to be done – this very day. Lastly, I want you to get real with yourself. Where have you been cheating? Write down three areas where you’ve failed to be consistent or where you know you’re been erring in handling your finances. It might be the case that you’ve constantly dipped into your savings or retirement funds without good cause; or perhaps you’ve allowed your significant other to handle all the household finances because it was “too complicated,” or you were “too busy.” Whatever the case, I want you to now write down the opposite scenario. Describe how you’re going to turn that around and become consistent in repairing broken areas of your financial world caused by you “cheating” yourself when it comes to money matters. Have you done all three things? OK, now I know you’re serious. And you know it too. Now you’re ready to hear more details about how you’re going to get that debt monkey off your back.

Excerpt from The Money Coach’s Guide To Your First Million – Now In Paperback

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Posts Tagged ‘debt’