THE FASTEST WAY TO ELIMINATE DEBT AND CREATE WEALTH
Brought to you by Bob Whitaker of the Entrepreneur Network USA, LLC
This is part 2 of a 4 part series on understanding debt and how to eliminate it as quickly as possible.
This section is entitled: “Debt Elimination”. If you don’t wish to wait for the rest of the series on eliminating debt and creating wealth, then you can go now to https://EntrepreneurNetworkUSA.com, join the network for FREE and get the full version of our Debt Elimination and Wealth Creation manual immediately.
SECTION 2 – Debt Elimination
Chapter 1:
Introduction: The Many Paths to Debt Elimination
There are many strategies that people use to eliminate debt. Some of them are:
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Making extra principal payments on a mortgage or credit cards.
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Getting a debt consolidation loan.
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Transferring credit card balances to lower interest-rate cards.
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Negotiating and settling their unsecured debts.
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Going to consumer credit counseling.
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Filing for bankruptcy.
Many people run into problems when they pick one or two of these strategies without carefully considering how that will affect the rest of their financial situation. At Entrepreneur Network USA, we want to educate you on how to get out of debt as quickly as possible by employing the best and most effective strategies for your situation. At the same time, we want to protect your credit rating as much as possible, which can be important to your financial future.
In this section, we will discuss the most effective ways to eliminate your debt as quickly as possible. Note: we will discuss later in Section 4 of this series some of the less effective strategies such as consumer credit counseling, debt consolidation loans, and bankruptcy.
Chapter 2:
The Fastest Way to Eliminate Your Debt
In the following chapters, we will detail the most effective methods for fast debt elimination. In this chapter, we will discuss the fastest way to eliminate your debt: by utilizing real estate investing. After walking through the following example*, you will see how powerful real estate investing can be in helping you eliminate debt and create wealth.
Let’s go back to the example we gave in the chapter entitled “Good Debt vs. Bad Debt”. In this example*, you have the chance to purchase a home for $110,000. Its market value will be $150,000 after you make $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). Besides that, it will bring you $300 per month in additional cash flow when you rent it out.
Assuming you had $20,000 of debt between credit cards, student loans, etc., you have a couple of choices:
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You could sell the house for $150,000, pay off your debts, and have and extra $10,000 to use as an emergency fund (if you don’t already have one) or invest in more properties. With one deal, you are out of debt and on the way to wealth!
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Or you could take out an equity loan for $30,000 (the amount of equity in the property you just bought). You would still be able to pay off your debts completely and have $10,000 for an emergency fund or for purchasing more properties.
You might argue that taking out the equity loan is just exchanging one debt (the credit card balance) for another (the home equity loan). While this is true, there are two reasons you may choose to take out the home equity loan instead of immediately selling the property. One reason is that you can rent out the house and keep the monthly cash flow it generates (in this example – $300).
Remember, however, that since you took out the home equity loan, you will have to subtract the monthly loan payment from the monthly cash flow in order to truly analyze your options. The other reason is that you could capitalize on the potential appreciation and tax advantages of the property by keeping it rather than selling it. You might choose this option if buying and renting real estate are part of your wealth creation strategy. Either way, you have put yourself in a position to pay off your debts and get on the road to wealth right away. The reason we say that real estate investing is the fastest way to get out of debt is that with the proper information, coaching, and action on your part, this process can take anywhere from 30 days to a year. When it comes to debt elimination, it doesn’t get much faster than that! Other debt elimination methods can take years and may require much more effort.
When you are out of debt (usually after completing one, two, or three real estate deals), keep going and do more deals. Real estate is a fast way to accomplish all of the following:
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Get out of debt.
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Establish your emergency fund.
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Fund your short-, mid-, and long-term savings goals.
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Create residual cash flow.
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Become financially independent.
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Help others do what you have done.
Discuss with your coach the real estate programs offered by Entrepreneur Network USA, LLC. Some of our programs include money-back guarantees to ensure you get the help you need to be successful.
* 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 3:
The Second-Fastest Way to Eliminate Your Debt
Those that understand compound interest collect it, and those that don’t, pay it.
In the last section, we covered the Rule of 72, which illustrates the power of compound interest working either for or against you. We also discussed good debts and bad debts.
Long-term debt (debt that will not be paid off quickly and that accrues interest, especially at high interest rates) can be devastating to the success of any financial plan.
Did you know that the way some credit card payments are structured, if you make the “minimum payment” every month, you will NEVER pay off the principal balance? Others are structured so that you pay for 30, 45, 60, or even 80 years before you clear your debt. High interest-rate, long-term debt is VERY EXPENSIVE.
Your unproductive debts might include credit cards, mortgages, auto loans, signature loans, student loans, personal loans, or any other kind of debt that is not contributing to your wealth. (Keep in mind that some of the debts mentioned could be used to improve your financial situation as well). Unproductive debts increase your expenses and limit your ability to save and progress toward your financial goals. In order to reach your financial goals, you must eliminate unproductive debt as quickly as possible.
So what should you do with the bad debt you already have?
Debt Rolldown
The debt roll-down concept taught by Entrepreneur Network USA is simple and it is the quickest and most powerful way to eliminate unnecessary debt. The first step is to set up a debt elimination calendar. To make one, mark off several columns on a piece of paper. In the first column on the left, write the names of the months, beginning with the upcoming month. At the top of the next column, write the name of the creditor you want to pay off first. It may be the debt with the highest interest rate or the one with the earliest pay-off date. List the monthly payment for that creditor until the loan is repaid as shown in the illustration below. At the top of the next column, record the name of the second creditor you want to repay, and list payments due each month. After you have repaid the first creditor, add the amount of that monthly payment to your payment to the second creditor. Continue the process until all loans are repaid.
Debt-Elimination Calendar
| Debt #1 | Debt #2 | Debt #3 | Debt #4 | Total Monthly Payment | |
| January | $20.00 | $50.00 | $75.00 | $155.00 | $300.00 |
| February | $20.00 | $50.00 | $75.00 | $155.00 | $300.00 |
| March | $20.00 | $50.00 | $75.00 | $155.00 | $300.00 |
| April | $20.00 | $50.00 | $75.00 | $155.00 | $300.00 |
| May | $70.00 | $75.00 | $155.00 | $300.00 | |
| June | $70.00 | $75.00 | $155.00 | $300.00 | |
| July | $70.00 | $75.00 | $155.00 | $300.00 | |
| August | $145.00 | $155.00 | $300.00 | ||
| September | $145.00 | $155.00 | $300.00 | ||
| October | $145.00 | $155.00 | $300.00 | ||
| November | $300.00 | $300.00 | |||
| December | $300.00 | $300.00 |
You can see that once one or two debts have been paid, the payoff of the others speeds up quickly. Keep at it and your debts will be gone before you know it.
Most of us have the tendency to spend any additional money we have. If we pay off a credit card and free up an extra $20 a month, it will usually go toward an extra restaurant meal or pizza night. If we pay off a car, it feels like it’s time to buy a-new one. But if you make debt elimination a priority, with a little discipline you can quickly pay off debts. And as you can see, our monthly payments stay the same throughout the whole process.
In the next section, we will discuss more ways to improve your debt elimination plan and pay off your debts more quickly. By combining these concepts, many people can eliminate all of their debts, including their home mortgage, in 5-12 years without increasing their monthly payments.
We also want to point out a couple of resources you can use to help you with your debt elimination plan – or even do all the work for you.
As part of your debt elimination course, you can talk with a coach who will help you evaluate your current situation and help you develop a proper debt analysis. Your debt analysis will be tailored for your individual situation and will show you exactly how to proceed with your debt rolldown plan. It will tell you which debts to pay off first to eliminate your unproductive debts as quickly as possible. The analysis will estimate how long it will take to pay off your debts if you stick to the plan as outlined. Your coach will also discuss other ways you can speed up the payoff of your debts. These ideas are also discussed in the next section of this manual.
You can also implement your plan electronically. There are many software programs that can help you track all of your expenses and allow you to track your debt roll-down plan. We highly recommend that you use a software program to organize your plan and track your progress.
Most importantly, to eliminate debt effectively, remember that you have to stop accumulating new, unproductive debt. Make the decision to stick to your debt rolldown plan and eliminate your unproductive debt as soon as possible.
Chapter 4:
Action Plan
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Talk to your coach about investing in real estate. Discuss the coaching programs offered by Entrepreneur Network USA to help you take advantage of opportunities in real estate. Use these opportunities to eliminate your debt quickly and start building wealth now.
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With your coach, determine if a debt rolldown program will work
for you. If it will, work with your coach to create a detailed debt elimination analysis , and begin to implement your plan.
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If a debt rolldown plan is not practical, consider debt negotiation as an alternative.
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If neither will work, read the 4th section on bankruptcy and consider speaking with a bankruptcy attorney.
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Go to https://EntrepreneurNetworkUSA.com and begin your journey to a healthier financial future TODAY.
COMING UP NEXT
In the next two issues of The Network Marketing Magazine, watch for a series of debt elimination articles describing: 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 https://EntrepreneurNetworkUSA.com , join the network for FREE and get the full version on our Debt Elimination and Wealth Creation manual immediately.
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For over 30 years, Bob & Anita Whitaker have successfully operated About Face Photo And Video from their home, doing hundreds of weddings & events. Bob founded The Daily Plan-It and developed the Tax MiniMiser, a financial tracking system used by independent contractors and small business owners now for over 25 years.Formerly the National Marketing Director for Musco Olive company, Bob oversaw all national sales. He has more recently Co-Founded the Entrepreneur Network USA and is the current VP of Sales for the company.He also serves on the Board of Directors of ConTXT, Inc, a mobile app technology company.Latest posts by Robert Whitaker (see all)
- THE FASTEST WAY TO ELIMINATE DEBT AND CREATE WEALTH Part 4 of 4 By Bob Whitaker - February 1, 2019
- THE FASTEST WAY TO ELIMINATE DEBT AND CREATE WEALTH by Bob Whitaker - January 1, 2019
- THE FASTEST WAY TO ELIMINATE DEBTAND CREATE WEALTH By Bob Whitaker - December 1, 2018
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