Wealth Manager

Why do you have month left after the money? Perhaps it is because you are up to your eyeballs in debt interest. Perhaps it is because you are dealing with the fallacy that monthly payment is the only way to do business. Of course your debt interest just happens to follow right along. So is a monthly payment your only option? I have news for you. It isn’t. The monthly payment is nothing more than the propaganda developed by advertising and which the IRS has aptly named “Gotta have it now” syndrome and its costing you a fortune in compound debt interest.

When on a car lot, have you noticed that after a little small talk the question eventually comes up, “What are you expecting your monthly payment to be?” The ploy is very simple. That shiny new car you just have to have does not cost $20,000. It only costs $400. Of course “monthly payment” is rarely mentioned above a whisper… and have you ever heard “debt interest” at a time like this? . I Know. I use to be a retail manager and this is how we trained our employees. “Anything in the store that you want is yours for less than $42.” (“But don’t mention what the debt interest will be unless asked.”)

Have you ever notice the large bold price of the monthly payment. If it weren’t for the Truth In Lending Law, the total price might not even appear. But the total price usually does appear in some small out of the way place in hopes you will never see it. And that is the point. You must reshape your thinking to think in terms of total cost and not monthly payment if you are to beat the debt trap you find yourself drowning in.

Albert Einstein was once asked what was the most powerful thing he had ever witnessed. His simple genius was quick to answer, “compound debt interest”. The following examples illustrate compound debt interest.

Finance a $2000 item at 19.8 %. By making minimum monthly payment it will take 31 years to pay it off and more than $10,000 in compound debt interest.

On the other hand, if you were to invest $300 per month at 10% (i.e. mutual fund) for 20 years the compound interest would accumulate your investment to $227,810.65. That amount would generate $1,898.41 per month for the rest of your life.

Ask yourself the question, “Do you want compound debt interest working against you or for you?” The choice is yours. But until we shut down the wealth sucking valves that are drowning us in debt interest, we will never get ahead. We need to live by the creed, “If I can’t afford to pay for it in cash, I can’t afford it.”

Is it essential to do so? To answer that ask yourself how your financial future is looking. Do you like juggling monthly payments and never quite having enough left over? Do you like paying 4-6 times more for an item than its value? If so, continue on the way you have been going.

But if you are tired of it, get out of the monthly payment rut.  The truth is the average consumer can eliminate all debt including their mortgage with the money they currently earn in an average 7.5 years. I have been teaching people how to do this for years and you can see how it is done yourself by receiving the free Debt Freedom Mini-Course via email.

You might also want to know that that eliminating all debt is like getting a 40% Tax-free Salary Increase.  If you don’t believe me, read the blog about it.