Brought to you by the Entrepreneur Network USA, LLC

        Entrepreneur Network USA (ENUSA) is a network of entrepreneurs helping entrepreneurs.  The network consists of expert educators in the areas of: debt elimination, cash flow management, taxes, insurance, investments, real estate, estate planning, charitable giving and foundation planning.   Wherever you are along that path, our experts can help educate and guide you towards achieving your goals more quickly.   In future issues of The Network Marketing Magazine, ENUSA will provide you with educational material on the above topics and give you insight on how you can achieve the level of wealth you desire.  We will start today with a four part series on understanding debt and how to eliminate it as quickly as possible.  You will find the first article below entitled: “Taking Control Over Your Debt”.   If you don’t wish to wait three more months for the rest of the series on debt elimination, then you can go now to, join the network for FREE and get the full version of our Debt Elimination and Wealth Creation manual immediately.

SECTION 1 – Taking Control Over Your Debt

 Chapter 1:

Why You Need to Get Out of Debt – NOW!

You already have many reasons to get out of debt as quickly as possible. It may be that the stress of debt has become overwhelming or your current debt has kept you from buying a home or a car. Perhaps you are looking toward retirement and have realized that with your current debts, that may be a long way off. As if these reasons weren’t enough, here is one more reason to take charge now and eliminate your debts: the ever-present threat of economic conditions that could make debt devastating to your financial health.

First, demographic trends in the U.S. predict a prolonged economic downturn in the coming years. The spending and savings years of baby boomer generation, the largest group of U.S. consumers, have recently peaked.  This impact on the U.S. economy has kept it strong for many decades.  Those baby boomers are now beginning to retire. As they retire, they will be living on the money they have saved over the years. Much of the money they have invested will be taken out of the market within a relatively short period of time. In general, when money comes out of the market, the market goes down – thus the looming economic downturn.

Contributing to this demographic trend, current laws could accelerate the expected downturn. The law that created tax-deferred retirement plans such as the 401 (k) is called the Employee Retirement Income Security Act (ERISA). ERISA contains a provision that forces people to begin to withdraw money from their retirement accounts at age 70½. Even people who want to keep their money in the market are forced to withdraw a certain amount from that age on. This provision could accelerate the economic downturn as it forces more people to take their money out of the market. You can easily see how these factors might impact your investments.  Therefore, you might want to adjust your investment portfolio over the next several years.

What does all of this have to do with your debt?

Prolonged economic downturns tend to lead to periods of deflation. Most people today don’t really understand deflation since our country has experienced the opposite (inflation) since the 1970s. For the last 40-45 years, inflation has meant that the price of the things we buy has gone up. We don’t usually worry too much about prices going up because we typically get raises and/or bonuses that help offset the rising cost of living, get promotions, or move to better paying jobs. Inflation only causes problems when the cost of certain things rises much faster than the average income. This has happened with health care and higher education costs in recent years; that is why those two areas receive so much media and political attention.

Inflation has been especially good to people who own real estate since the price of real estate has gone steadily upward in most of the country. People have created a lot of wealth by investing in real estate during these years of inflation.

In contrast, deflation means the cost of the things we buy would go down. We have experienced deflation recently in a few segments of the economy such as electronics, computers, etc., which have gone way down in price over the last few decades. You might be thinking, “That would be great! I would love the price of the things I buy to go down. What’s the problem with that?” The problem is that lower prices create a cascading effect. If companies make less for the products they sell, they have to cut expenses in order to stay in business and keep the stockholders happy.

Can you guess what a company’s #1 expense is? That’s right – it is the employees. Companies will have three choices: 1) lower wages and/or benefits, 2) lay off workers, or 3) both. Whether you keep your job or have to find a new one, chances are that you will earn less than you do now. Just ask anyone who worked in Information Technology (an industry that experienced deflation) when the bubble burst back in 2001. Many of them lost their jobs and those that didn’t lost much of their income.

“But,” you may argue, “even if I earn less, the price of the things I buy will go down too. So, unless my income goes down dramatically and prices go down just a little, I’ll still be able to maintain my standard of living, right? I still don’t get what the problem is.”

The problem is that in one area of your finances, prices WILL NOT go down. This area is DEBT. If your mortgage is $250,000 with a monthly payment of $1,500 and deflation hits, you will still owe $250,000 and have a monthly payment of $1,500. The same goes for your credit card payments, car payments, student loan payments, etc. What would you do if you found yourself making 10% or 25% less than what you make now and still had to make the same mortgage, car, and credit card payments? What’s worse, if prices go down, you still owe $250,000 on your house and it may be worth much less than that because of deflation. The same applies to your car or any other asset. With deflated prices, selling your assets to pay your debts might not be an option. In other words, debt can be financially devastating during periods of deflation, especially prolonged periods. There are no good solutions to the problem.  At that point, it’s too late.

Now for the great news! You can prevent these problems by taking control NOW and getting out of debt before deflation hits.

What have you got to lose? If deflation hits you hard, you will be prepared. If it does not, you will still be debt-free and prepared for the many opportunities for wealth that come with the  ups and downs of our economy.

This course is designed to help you get out of debt as quickly as possible. Follow this program and you will soon put yourself in a much more secure financial position. Financially speaking, there is no better feeling than the freedom of living debt-free.

Chapter 2:

Introduction: Let’s Get Clear;

What Do You Want to Accomplish?

Everyone’s idea of financial security is different. Some people just want to get out of debt and maybe pay off their home loan. Other people want to have enough saved to support them for several months if something unexpected happens. Still others want to create passive income streams that will replace their current income so that they can stop working whenever they want.

Whatever your goals are, our debt program is set up to help you accomplish them. We will show you the fastest way to accomplish your goals.

First, take a moment to identify your goals. Think about what you want to accomplish and keep that in mind as you go through the rest of this course.

Our goal

Our goal is to help relieve you from the burden of debt as quickly as possible. We are committed to helping you understand your current situation and tailoring a plan specifically for you. If you will learn and use the principles outlined in this course, you will be well on the way to getting rid of unproductive debt forever.

All of this will help you get where you want to be… on the road to wealth.

Chapter 3

Good Debt vs. Bad Debt

Understand that not all debt is bad. Some debt can actually improve your financial situation. For example, let’s say that you get a mortgage to own a rental home. That mortgage is a debt. However, if the income, tax advantages, and appreciation of the home’s value exceed the cost of your mortgage, insurance, property taxes, and property maintenance, the debt (mortgage) would improve your financial situation by increasing your cash flow and/or net worth. In other words, when you take on a mortgage debt like this, it pays for itself and then some. This debt actually increases your wealth.

Or what if your credit card company offered a 0% interest rate for one year with no fees? If you took $10,000 from this card and put it in a money market account earning 2% per year, you would earn $200 during the year and be able to replace the $10,000 before any interest charges accrue on your credit card.

In either of these cases, you would be using an important principle called leverage. Leverage is when you use someone else’s money (a debt) to make money for yourself. Properly used, leverage can provide a strategic advantage to help you eliminate debt and/or create wealth.

Bad debt is another matter. Let’s say you just have to have that great sweater you saw at the store. It costs $150.00. You put it on your credit card. The credit card charges 18% interest and requires a monthly payment of $3.00 (2% of the balance). This debt will take 7 years and
1 month to pay off and will cost you a total of $365.00. After two winters of wearing the sweater, you decide it is a little frayed, you spilled some grape juice on it, or you just don’t like it anymore. You sell it at your yard sale for $5.00. You will be paying for the sweater long after you sell it and you will lose $360.00 in the process. These types of transactions don’t help your financial situation, now or in the future.

If you had purchased a $50.00 sweater instead, saved the additional $100.00, and earned 10% on it over the same 7 year period, your $100.00 would now be $195.00.

To put it simply:

Good debt puts money in your pocket.

Bad debt takes money away from you.

The biggest problem with bad debt is that it reduces your monthly cash flow and keeps you from taking advantage of great financial opportunities when they come up. You might run across a rental home you would love to purchase. Maybe you can get it for $110,000 and its market value will be $150,000 after $10,000 of repairs. You would be walking into $30,000 of instant equity ($150,000 home value, minus $110,000 purchase price, minus $10,000 in repairs).

It will also bring in $300 per month of additional cash flow*. However, if you have too much debt, you may not qualify for the mortgage you need to finance the deal. You might miss out on something that would almost instantly turn your situation around. Bad debt is devastating to your financial health.

If you want to create wealth, use credit or borrowed money only for items that will appreciate in value, increase your cash flow, or net worth. Avoid using credit for items that depreciate or that do not increase your cash flow or net worth.

Ask yourself, “What is it I desire more? Long-term financial security or that fashionable sweater and the cool car?” Many would say that financial security is more important. If you are one of the many and prefer financial security, remember:

Don’t sacrifice what you want most for what you want right now.

Please don’t misunderstand. We realize that lifestyle is important as well. People like to have nice things, go on vacations, etc. The good news is that you can have both financial security and lifestyle. Here’s how:

Instead of borrowing money to buy the things you want and create the lifestyle you desire, use borrowed money to purchase assets that will improve your financial situation. These assets can include:

  • Real Estate

  • Investment Opportunities

  • Starting a Business

  • Retirement Accounts

Take some of the profits generated by your assets and use them to buy the things you want. In other words, earn the money to pay for your lifestyle BEFORE you spend it, not afterward. This strategy will improve your financial situation and put you on the road to building wealth. You really can have it all.

* The example cited here is for illustrative purposes only. It does not represent any particular real estate investment. Results will vary from one investor to the next.

Chapter 4

The Rule of 72: The Time Value of Money

Because most people don’t fully understand the power of compound interest, they don’t realize how serious their debt problems are.

The Rule of 72 illustrates the power of compound interest. The Rule of 72 estimates how many years it will take money to double at a specified rate of interest. For example, let’s take $10,000 compounded at different interest rates and see what happens after 36 years*.


Rate of Return                                    2%                   6%                   12%                 18%


Years to Double                                 36                    12                    6                       4


$10,000 After 36 Years                  $20,000            $80,000          $640,000         $5,120,000

As you can see from the above example, compounding interest is powerful. Beware! The Rule of 72 can work powerfully against you if you pay high interest rates on credit cards and other consumer debt. $10,000 borrowed now could cost you upwards of $5,120,000 in the long run. That could make a one-time purchase of a stereo system or vacation very expensive. Under these circumstances, compound interest can drain your cash flow and dramatically reduce your ability to create wealth.

Three factors play important roles in the Rule of 72: the amount of money involved, the length of time compound interest has to work, and the interest rate.

When it comes to debt, these three factors are especially important. The more money you owe, the more time you take to pay it off, and the higher the interest rate charged, the more power compounding interest has to work against you. Think about this:

  • High Balances: Credit card companies want you to spend a lot on credit (they send you many offers and give you high credit limits on each card).

  • Long Payoff: They want you to take a long time to pay off your balance (this is why they require only very small monthly payments) Note: some companies set their minimum required payments so low that if you only pay the minimum amount every month, the balance will NEVER be paid off.

  • Interest Rate: They charge you a high interest rate on the debt. Many companies charge 15%, 18%, 21 %, or more – if you are late on a payment, rates may go up to 29% or more!

Credit card companies make debt easy to build up and difficult to pay off. Fortunately for you, this course is designed to help you eliminate these types of debts as quickly as possible so you can start creating wealth.

We’ve shown you the down side, but there is also good news. Compound interest can work just as powerfully FOR you as it does against you. Based on the chart above, with compound interest working for you, a $10,000 investment could turn into $20,000 or even $640,000 depending on what rate of return (interest) it receives. When it comes to saving money, high rates of return can greatly increase your net worth and help you along the path to creating wealth.

Applying the Rule of 72 to wealth creation, two things are clear:

  • In order to create wealth, high-interest rate debt (bad debt) must be eliminated.

  • Wealth is created by earning high rates of return on your savings and investments.

* The example cited here is for illustrative purposes only. It does not represent any particular investment and should not be construed as an endorsement or recommendation of any investment product. The Rule of 72 is an estimate, not an exact indicator or formula, especially since many investments fluctuate in their performance and do not give consistent rates of return over long periods of time. 

Chapter 5

Saving Money

It may seem obvious, but people forget they can’t create wealth if they spend everything they earn. You must save in order to be successful financially. We realize you have to spend money for housing, food, and other necessities. But in order to eliminate debt and build wealth, you MUST spend less than you earn.

There are four types of savings that are important to your financial future: 1) an emergency fund 2) short-term savings 3) mid-term savings and 4) long-term (retirement) savings.

Emergency Fund: An emergency fund is key to any successful financial plan. No matter how well you plan, unexpected things will happen and you will need money available. It could be a job loss or disability, a car repair, a medical bill, a great investment opportunity, etc. An emergency fund keeps your financial goals intact when unexpected things happen.

We recommend that you have a year’s worth of expenses saved in an emergency fund. Don’t worry about getting a high rate of return. That’s not the goal here. An emergency fund should be easily accessible; you must be able to use these funds any time you need them. Many people choose to keep the money in a savings account or a money market fund.

If you have an adequate emergency fund, you probably can handle most financial emergencies. Most likely, you will have several financial emergencies in your lifetime and without an adequate emergency fund, you may have to incur debt to handle the situation (which is what you are trying to avoid).

An emergency fund is vitally important. We recommend saving an emergency fund while paying off current debts, even though you may be paying high interest rates on the debt. With an emergency fund in place, you can make your monthly payments and take care of anything that may come along. If, on the other hand, you aren’t saving as you go, one unexpected event may be enough to put you in a financial crisis and ruin the progress you have made to that point.

You should only use your emergency fund money when it is absolutely necessary. It is not a slush fund to spend on extras every month.

Short-term Savings:

You need a plan for short-term goals. These include a vacation, the down payment on a house or car, etc. Short-term savings is to allow you to purchase the things you want without going into debt to get them. Short-term savings money should be invested conservatively so that you do not lose your savings to a risky investment. These savings should be fairly liquid.

Mid-term Savings:

You may also have mid-range goals like saving for your children’s college education or wedding expenses. These things should also be a part of your savings plan. Mid-term savings can be invested in several different ways with some possible tax advantages (example: a child’s education fund). It is possible to make these savings tax-deferred or tax-free depending on investment and/or withdrawal.

Long-term Savings:

You should plan as early as possible for your retirement. You can use many types of investments to grow your retirement savings. There are many tax-advantaged strategies you can use for retirement money.

To a great extent, your success in financial matters is directly linked to how much you save each month and the consistency of your savings habits. We recommend you save at least 10% of what you earn. If you can, save much more than 10%. If you can’t save 10%, then start with what you can save and consider how you might increase your income or decrease your expenses so that you can save at least 10%.

We strongly recommend that you make your savings plan automatic. Set up automatic deposits or transfers so that your savings money goes where it should (savings accounts, debt payments, retirement accounts, etc.). It is too easy to spend money on other things if the savings plan is not automated.

Start by applying your savings toward your emergency fund and paying off your debt. When your emergency fund is in place, speed up your debt payment. When these goals are taken care of, you will feel a great sense of accomplishment and you will be much more financially secure.

You can then apply your savings toward your short, mid, and long-term goals.

The more you save and the sooner you start, the sooner you will be debt-free and the sooner you will be looking forward to financial freedom and retirement.


Chapter 6

Spending Management

Whether you realize it or not, your spending habits reflect your values. In other words, you spend money on the things that are more important to you than money. For example, if you spend $1.00 on a candy bar, it is because you want the candy bar more than you want the $1.00. While spending $1.00 on a candy bar now and then probably won’t seriously hurt your financial situation, your spending habits (the series of spending choices you make over time) WILL determine your financial well-being now and in the future.

If you are like most people, you rarely think about how a single spending decision will impact you long-term. If you did, you might reconsider some of your spending decisions.

Let’s say that you really want a new TV. It will cost $2,500.00. You might not think about what that same $2,500.00 could do for you if you decide not to buy the TV. $2,500 invested at 12% for 30 years becomes $74,899.81*. Which do you want more? A new TV now or $74,899.81 at retirement? Chances are you will not be able to sell a 30 year-old TV for $74,899.81 when you want to retire. Your choice will show which you value more.

The results of this decision have even more impact on your financial future if you choose to put the new TV on a credit card. If you put it on a credit card at 18% and paid $40.00 per month, it would cost you almost $5,000.00 and the impact on your retirement would be more like $110,000.00. That’s a pretty expensive TV. The TV you already have is probably starting to look better and better.

If you really want the TV, we recommend that you use the strategy outlined in Chapter 2 of this section. This describes how you can put your money or borrowed money to work and use the profits to purchase the TV.

If your spending habits consistently show that you value the ability to purchase things now more than saving for the future, you will likely find that your financial future looks pretty bleak. On the bright side, you will have lots of “stuff”.

*The example cited here is for illustrative purposes only. It does not represent any particular investment and should not be construed as an endorsement or recommendation of any investment product.


Chapter 7

Action Plan

  • Get clear on your goals…

What do you want to accomplish? Be specific.

How much do you want to save?

How soon do you want to accomplish your goals?

What are you willing to do and/ or sacrifice in order to accomplish your goals?

Write your goals down.



        In each of the next three issues of The Network Marketing Magazine, watch for a series of debt elimination articles describing: The Fastest Way to Eliminate Your Debts; Ways to Accelerate Your Debt Elimination Plan; and Alternative Ways to Eliminate Debt.  If you don’t want to wait until next month, go now to, join the network for FREE and get the full version on our Debt Elimination and Wealth Creation manual immediately.

Robert Whitaker

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