Debt

That name of that demon, Debt, should strike fear in man’s heart. It enslaves even the noblest and most honest people. And, strangest of all, it is self-inflicted.

I’m going to tell you how to double your money. It is simple: get out of debt. Get out of debt and your money is doubled. Think of debt as a hole. Let’s say you owe $3,000 on a credit card, and each month you pay $20 on that card. Think of a $20 hole in your monthly finances. Each month that $20 goes down a hole, yet the hole is still there and you own yet another $20 the very next month. But think of this, if that hole was filled up, the result is not that you would be even, but that you would have $20 to the good. That is, rather than losing $20 each month, you would be gaining $20 each month. That is a net gain of $40. Thus, to double your money, you simply get out of debt.

That may sound like mental juggling at first, but I'm talking from experience. Try it yourself. Pay off a bill and see what the effect is on your finances. It is huge! Instead of gaining $20, it is like gaining $40.

The mental relief and joy you get from being out of debt also replaces the mental anxiety, thus your soul is twice better off than it used to be.

How We Got This Way

How did we get into a life of debt anyway?

Just after leaving my teen years, my dad cosigned for my first car. That is where I make the payments but if I default, he will be responsible to make the rest of the payments. Immediately upon signing the contract, dad said to me, “Congratulations. You will now be in debt for the rest of your life.” He was almost right.

Why would my dad say that to me? It was because he was in debt for his entire life. He thought that was the way life was supposed to be. Why would he think that? He thought it because that’s what his dad taught him. His dad was also in debt for his entire life. Mom was no better. She had come from a family with the same mentality. All they knew was poverty and debt. Therefore mom became dad’s supporter and verifier. They both worked hard to make a living and pay their bills, but they never expected to be out of debt.

Guess what my parents taught me. That’s right! They taught me how to be in debt. I had no concept that another, better way of life was possible. It wasn’t until I was in my 50s that I met a group of people who guided me out of the poverty/debt mentality. That was when I learned how not to be in debt.

The Effects of Debt

King Solomon said, “The rich rule over the poor, and the borrower is servant to the lender.”
(Proverbs 7:22)

The word “servant” here means “slave.” This servant is not a paid worker; instead, he had been paid up front with a loan, and now he belongs to the lender until the debt is paid. He is a slave.

Before I learned that being debt-free is an option, I thought I would just have to ignore that verse in the Bible. I knew it meant we should not borrow money, but I also thought it was impossible not to live on credit, therefore I thought that verse applied only to rich people, people who could pay off their debts.

So I lived as a slave for most of my life, beginning when I bought my first car.

And I worried. I worried about how to pay my rent. How to pay for the car. How to pay for car gas. How to pay for my daughter’s education. How to pay for my family’s medical bills. How to pay for the washing machine. How to pay for our clothes. How to pay for the food. How to pay the electric bill. How to pay the insurance. How to pay for car repairs. How to pay for my bus ride when the car was not running.

And forget about giving a tithe to the church.

I was sick with worry and anxiety. Do you think that affected my life? If affected everything. And my family, who was supposed to benefit the most from my presence, instead suffered the most when I was around.

How To Get Out of Debt

I met people who taught me debt was unnecessary and enslaving. They taught me how to get out of debt. They gave me books to read on the subject. They took me to hear public speakers who talked about it. After I turned fifty, I learned that being in debt is an option, not a forced compliance.

The first step to getting out of debt is to decide you’re going to get out of debt. Without that decision, nothing will happen. You may embrace your slavery if you want, or you may embrace freedom.

I’m going to give you two simple methods to get out of debt, and then how to earn more money. I tried both methods of getting out of debt (I was in debt twice), and they both worked fine.

Method One – Use a Debt Consolidation Agency

I think every state has these agencies. Many do. California does. I used CCC, Consumer Credit Counselors. If you’re looking for an agency to help you, just go online and enter “debt” in your search engine. That way you can get a list of agencies who can help you.

This is what they do. First, you bring them a list of every debt you have. Not just some, but all of them. You also bring a list of all you income and assets. Not just some, but all.

The counselor will go over what you have and set out a reasonable budget for you. When I tried to budget myself, I was always too hard on myself. They made a budget for me that I could really live on. I liked theirs better than mine.

Next they contacted all of my creditors and told them (not asked; but told them) that I was now in their care and from now on each creditor would get so much money each month until the debt was paid. For example, I had been paying $552 each month for bills. They lowered that to about $225. They divided that $225 among my creditors. The rest would go to me.

Of course I had to promise not to create any more debt. If I opened a new credit account, all bets were off and I was at the mercy of my creditors. My credit cards were cut up.

Now think about that. For my whole life I was taught the normal way for people like me to live was to be in debt. These people cut up my cards and told me not to create more debt. Do you think I followed through on that?

People follow their habits. If you’re in debt and you want to be out, you’ve got to make up your mind to get out of debt and you’ve got to change your thinking. If you don’t change your thinking, you’re not going to succeed. You must change your perception. That is why my friends had me read books and attend lectures on the subject; they wanted to change my thinking patterns from being a victim of my debt to being a victor over my economics.

Being in debt is an option. Being out of debt is a choice. You can be free if you so choose. You don’t have to be a debtor.

Method Two – Do It Yourself

This debt-riddance method is taught in one of the books I read. It pretty much does the same thing that Method One does, except that you do it yourself.

List all your debts on a piece of paper. That is, the amount, the account number, the creditor’s name, address and phone number.

List all your assets on a piece of paper. Especially your income.

List your expenses, your rent, car payments, food, insurance, and so on.

Find out how much you can pay on your bills. For example let’s say you owe $500 each month but you can only afford $420. Therefore each month you go deeper in debt. From now on you’re going to pay $420, not $500.

You contact each company via mail and tell them to close your account and you’re going to pay them so much money until the account is paid off. You’re not asking their permission, but you’re willing to cooperate and be civil to them if they want to talk to you about it. However, you don’t back down.

Some companies will want to buy you out. They’re willing to “sell” your debt to you for a lower percentage. For example, if you owe $5,000, they might let you buy it off for $3,000, if you pay it all in cash up front. That’s a good deal, but if you don’t have $3,000, what are you going to do? Borrow it? Get in debt again?

Here’s the really neat thing when you decide what you’re going to pay your creditors. Let’s say you’re paying $50 a month for a $500 bill, and you’ll have it paid off in ten months. When that bill is paid off, you don’t have $50 extra money. Instead you add that $50 to the creditor that will be paid off next. So, if you were paying $45 to someone else and you increase it by $50, then you will be paying him $95, instead of $45. That will make him happy. When he’s paid off, you take that $95 and put it onto the creditor that will be paid off next.

You keep that up until you are all paid off and debt free. You'll find that adding the money from a paid-off debt to what you're paying someone else will accelerate your travel to freedom. Instead of getting debt-free in three years, you may be able to accomplish that in eighteen months. Remember, your goal is to get debt free, not to put an extra $50 in your pocket. When you become debt-free, you'll find that it has the effect of doubling your income. That is, if you had been paying $500 a month, the effect of being debt free is like having an extra $1,000 each month, plus having the internal, mental freedom and relief.

Tips

Get out of the “broke” mentality. You don’t have to be broke.

Get out of the “debt” mentality. You don’t have to be in debt. How do you do that? You do it in two ways:

1. Decide you’re going to get out of debt and stay out of debt.
2. Buy and read a book that teaches you how to be debt free, or go online and find a place that teaches you the same thing. Read it twice if it helps.

Get rid of your credit cards. Instead, use the debit card (check card) Visa or MasterCard provided by your bank and use the cash method only.

Sometimes you must have a credit card, as when you have to rent a car for some reason. In that case, get a credit card for which you have prepaid $300. It is a credit card that is good for up to $300, or whatever amount it is you prepaid.

There are other secrets that help you get out of debt and stay out of it; however, those will do you no good until you have followed the above methods. There is a way of living right and free, but you must seek it to find it.

Change Your Thinking

Everybody knows the numbers. You earned $1000 a month and your expenses plus bills are $1500 a month. Your expenses without bills are $1100, and your bills are $400. That is, even if you get out of debt, you are still going down to the tune of $100 a month, and it’s all because you’re not earning enough money.

You’ve gotta do something fast.

This is the first step. You’ve got to change your way of thinking. It is your thinking that got you where you are now, and it’s your thinking that is keeping you there. The only way you can escape is to change your thinking.

Everything you did was based on your thoughts. Every response you made was because of some condition to which you gave thought and decided on a course of action. Everything. From the time you were in kindergarten until now, your life has been shaped by your own thoughts. If you accepted someone else’s thoughts, that was because they sounded good to you and you thought you would accept them, and thus you made them your thoughts.

You’re poor, broke and in debt because you have poor, broke and debt thinking. If you want out of that cycle, you’ve got to change your way of thinking.

How Some People Think

During my lifetime, I’ve made several identifiable life-changing decisions. They were quality decisions and I’ve never been the same after that. One of those decisions is important here. It is this: I will never think of myself as less than average.

You know how some siblings are and even parents. Sometimes your own family members beat you down by constantly telling you how stupid you are and how useless you are. That poison is worse when it regenerates itself in your own soul, and you take up where they left off, telling yourself how stupid and useless you are.

It’s a scientific, proven fact that the average person is average.

Most people are average. So I analyzed myself and discovered I don’t have Down’s Syndrome nor any other common mentally challenging conditions. My grades in school were average. When I checked over my body, it was average. Therefore, the lowest I would allow myself to be categorized is “average.” Nobody could ever call me stupid without my approval. I rejected it.

The average person, I’ve found out, can hold down a job, raise a family, and even get rich. I’m not saying the average person does get rich. He can get rich – through is own inititive.

And you are in that category.

But some people give up on high school, thinking, “I’m too dumb for high school.” Some don’t go to college because high school was too hard and they know they would never make it through college. Besides, after twelve years of school, the thought of another four years of school sickens them.

I’ll tell you what should sicken them, the thought of a lifetime of being broke, struggling, over their head in debt, and not ever being able to realize their childhood dreams.

Do you see what just happened? To spare themselves four years of effort, they chose sixty-four years of effort, drudgery, struggle, hardship, heartache, anxiety, and disaster.

That’s average for you. If you did that, then you’re average. If you’re average, then you have the ability to achieve anything you want and obtain any dream you have.

Don’t believe me? Then buy an annual copy for Forbes 400 Magazine, showing the four hundred wealthiest men in the world. Look and see who they are. They’re all billionaires.

Some of them didn’t finish high school. Many of them didn’t go to college. Eleven percent of them inherited their wealth. Of those eleven percent, most of them are ranking lower every year, because they didn’t learn how to earn money; they learned how to spend it.

Here’s a test. Suppose you win the lottery. What are you going to do with that money? The first thing most people say is, they’re going to pay off their bills. Then they’re going to share the wealth with their family and friends. Then they’ll take that lifelong dream vacation. People plan how to spend their lottery winnings, not how to put it to work to earn more. That’s the recipe for disaster. That’s poverty for you. That’s average.

About eighty-five percent of the Forbes 400 billionaires earned their money, all of it. And most of them are average.

What’s the difference between average people who get rich and average people who get broke? There’s only one difference, and that is, they think differently. Rich people plan how to get rich; broke people plan how to be broke.

How to Make More Money

So, how do you make money? I’ll start with the traditional way, and then work up to the sublime.

Most people who make money and want to earn more get a second job. Everybody knows that’s a way to disaster, but that’s how they think. They have the victim mentality, the broke mentality. Nevertheless, it works in a way. You get a second job.

Here’s what traditionally happens. The man gets a job. Then his wife gets a job. Then he gets a second job. Then maybe she gets a second job. Then they bail their son out of jail or pay for their daughter’s abortion.

Phase two is when you start thinking a little bit. After all, you are average, which means you can think your way to wealth. You grow up mentally and realize you should have gone to college. Now you have to go to college while at the same time you have a wife, children, and primary job. That’s what I did, and the result was that, over the years, I increased my salary over six times (600%).

That’s pretty good. But guess what. I was still broke. Why? Because I had the broke mentality. I thought like a broke person. I acted like a broke person. I was a broke person. I was average.

Then things changed. I stopped thinking like a broke person. I stopped being broke. And I got out of debt.

Finally, here’s the number one, all-time best way to get out of debt and even achieve your dream. There’s one way to do that. One way only. That is to begin your own business.

The United States government was founded on the principle of capitalism and free enterprise. The American tax code was designed to benefit people in business, not the worker.

I’m not going to tell you which business you should get into, but I will give you a few tips. You may say, “Wait a minute! Ninety-five percent of new businesses go out of business within five years.” That’s exactly right, so I suggest you find a business you can do that won’t go out of business in five years.

Here’s an example. Take a person who does a wonderful job at clipping poodles. She’s great at it, and her reputation has spread so far that she is overwhelmed with new customers. So she decides to open a poodle clipping business, and she does, and she goes out of business within five years, bankrupt. Why? Because the skill of clipping poodles is not the skill needed to run a business. You need business-running skills for that.

That leaves you with options. You can run your own business or join a multi-level marketing group.

Don’t discount multi-level marketing groups. Average people are becoming wealthy by them all the time. Don’t mistake them for “pyramid schemes.” Pyramids have a well-defined description and they are illegal. Multi-level marketing groups are legal, and they don’t fit the description of Pyramids. Therefore, if somebody shows you a multi-level business (also called “networking”), don’t appear like an idiot to them by asking if it is a pyramid. It’s not.

The benefit of a multi-level marketing group is that it runs like a franchise. It always works, if you work it. Those people in MLM (multi-level-marketing) who fail, all fail for the same reason: they didn’t work it the way they were taught. Of course they blame someone else, because blaming themselves is not an option. After all, they’re only average.

Another advantage of MLM is that your group teaches you what to do. They provide the training. You can’t beat that. Just be careful to get into a good group, not something you’ve never heard before. The new ones go belly up in about five years. Look at Shakley, Herbalife, Quixtar, Avon, Mary Kay, Tupperware, and stuff like that.

Can’t do MLMs? All right, then go into your own business, doing something you love. Remember, the failure rate is high in personal businesses, therefore you must learn the skills of running a business, as well as the skill of providing a product or service. You’ve got to read books to learn what to do. A good book to start on would be Steven K. Scott’s The Richest Man Who Ever Lived. Scott went from being a loser passing from job to job to being the hottest item on the market, thanks to following the principles he describes in that book.

You have a third option. You can get into something “respectable” like Primerica, Insurance or Real Estate. You’re still going to have to take training and learn. There’s no getting around it.

How to Decide

If you don’t have something already in mind about what you want to do, how do you decide? What I’m about to say may sound weird, but it works. It always works. I’ll tell you a way to get hundreds of ideas to come to your mind, all of which will work, and all of which you may love. Follow me on this one.

Make up your mind that you want to run your own business. Then you tell yourself that is what you want to do. Then you tell God that is what you want to do. You do it like in a prayer. If you can’t handle that because you’ve got such a strong mental block on God, then tell it “to the universe.” Tell it to the higher power. Then set out reminders, such as buying a roll of play money and lying the bills around where you see them all the time. Every day upon waking and as you go to bed, tell yourself again that you’re going to be a successful business man, and you need the idea to get started.

You keep that up for three weeks and you will have ideas swimming in and out of your head all day. Pick one. But don’t forget that you need training to do it. You need help. Look for someone to help you, someone to be on your cheering squad and support team.

That’s it. I told you how to get out of debt and also how to stay out of debt.

Go for it.