1plus12 - Axioms of Freedom - I of Xiii - Freedom From Debt

AXIOMS OF FREEDOM
I OF XIII
FREEDOM FROM DEBT
By Serving One Another, We All Be Free
W W W . 1
P L U S 1 2 . C O M
1PLUS12 © 2015
Page 1 of 33

Special Report

The primary reason most people have money problems are that in school they were never
taught cash flow management. Without this training, they wind up working harder and harder in
the belief that making more money will solve their problems. Unfortunately, more money often
just sends people deeper into debt. More money won’t solve problems if cash flow
management is the problem.
I don’t embrace the notion “cut up your credit cards and live below your means,” but if you’re so
deeply in debt that you cannot even imagine expanding your means, you’ll need to follow a
debtreduction plan first. Debt reduction will get you out of the hole and on the path to financial
freedom.
Your debtreduction plan will compel you to live within your means before trying to increase
your means. The initial step should be this: Pay yourself first. Put aside a set percentage of any
and all payments you receive, whether from work or other sources. Deposit the money in your
investment piggy bank in an investment savings account, and don’t take it out until you’re ready
to invest it some other way. Think of each dollar in your investment piggy bank as an employee
ready to work hard for you.

W W W . 1
P L U S 1 2 . C O M
1PLUS12 © 2015
Page 2 of 33

Control Spending

When you find yourself deep in a hole, you need to stop digging. And that means curbing your
spending—avoiding the temptation to buy things like a robot lawn mower, a car that gets ten
miles per gallon, or a second pair of highend athletic shoes. Admittedly, this requires willpower.
Nowadays frugality is out of favor. To get out of debt, though, you need to adopt the
oldfashioned virtue of delayed gratification.

By cutting back on money wasters, you’ll increase the percentage of income you keep. It’s
important not to consider this a temporary step. If you truly want to stay out of debt and enjoy
security, comfort, or riches, you ought to make purchasing assets a lifelong practice. There are
hundreds of ways to trim a budget. For example, you can practice wiser money management.
Here are some ideas to inspire you:

∙ Pay bills on time to avoid late fees.
∙ Use only one credit card until you get control of your spending.
∙ Pay off your credit card balance each month to avoid finance charges.
∙ Find a credit card with a lower interest rate and no annual or transfer fees, then
consolidate your debts so you will pay less in interest and fees.
∙ Don’t use automatedteller machines (ATMs) that charge a fee—you’ll be paying for
your own money!
W W W . 1
P L U S 1 2 . C O M
1PLUS12 © 2015
Page 3 of 33

You can also adopt wiser shopping habits:

∙ If it ain’t broke, don’t fix it. The avocadogreen refrigerator stays!

∙ Switch to less expensive brands of everything from shampoo to cars. When buying
bigticket items (necessities only, of course), read magazines like Consumer Reports to
make sure you’re getting quality along with a lower price tag.

∙ Shop at wholesale clubs and discount department stores.

∙ Respect your budget; if you’ve reached the $200 food limit, skip the potato chips or the

ice cream.

∙ Consider starting a parttime business, even if you have a fulltime job, and review your

expenses to see if any could be deductible business expenses.

∙ Don’t take a vacation until you have the money to pay for it.

∙ Shop for discount airfares—or drive.
W W W . 1
P L U S 1 2 . C O M
1PLUS12 © 2015
Page 4 of 33

When it comes to wise budgeting, household expenses are another area ripe for reining in. The
following ideas are meant to inspire you only—there are dozens of other ways to cut:

∙ Turn the thermostat down and the lights off.

∙ Winterize your house from top to bottom, insulating pipes, drafty windows, crawl spaces,
and other energyguzzling areas.

∙ Curb your cell phone use.

∙ Shop for lowercost insurance and raise your deductible.

∙ Don’t run the dishwasher unless it’s full.

∙ Don’t water your lawn every day and cut the grass yourself.

You’re probably thinking, Save $2 by changing shampoos and $10 by cutting back on cell
phone chatter? That’s small potatoes. In fact, you’d be surprised how quickly those savings add
up. If you save $25 a week—and most people can easily trim that much—you’ll have $1,300 a
year to put towards your credit card balance. Save $40 a week and you’ll have $2,080!
W W W . 1
P L U S 1 2 . C O M
1PLUS12 © 2015
Page 5 of 33

Eliminate All Unsecured Debt

Simply speaking, there are two types of debt: secured debt and unsecured debt. Secured debt

is debt with collateral behind it, such as your home mortgage or car loan. Unsecured debt is
debt with no collateral behind it, for example, personal loans, medical bills, and the charges on
your credit card. Once you’ve cut expenses, the debt you should attack first is unsecured debt.
While some unsecured debt is unavoidable—most is unnecessary, the result of unbridled
spending. There are also two types of debt, good debt and bad debt. Review your unsecured
and secured debts to see if they are good or bad debts. Consider most unsecured debt as bad
debt. Remember, good debt is debt that buys an asset, so it is usually secured debt.
W W W . 1
P L U S 1 2 . C O M
1PLUS12 © 2015
Page 6 of 33

Some Notes on Credit Cards

Credit cards can be wonderful bookkeeping tools, particularly if you use one credit card for
business purposes and another for personal use. But beware—credit cards are only useful if
you pay off the total balance due each month, thereby eliminating interest charges. One reason
many people get mired in debt is that credit card companies make it so easy. What can you do?
Simple: Don’t get sucked in.
Credit cards have benefits, to be sure. With a credit card you can secure rental car
reservations, purchase tickets over the phone, and solve the problem of checks that stray in the
mail. But there are so many types of cards that you have to shop to find a budgetfriendly one.
Just the card alone—forget your charges—can eat a big hole in your pocket. There are late
fees, overlimit fees, and annual fees, the latter of which can approach a whopping $100. As for
annual percentage rates (APRs), they can reach as high as 26.5 percent. Does the APR really
make any difference? Say you’re paying $500 a month on a $10,000 balance. With an APR of
18 percent, it’ll take twentyfour months to pay off the loan, and you’ll also be paying almost
$2,000 in interest. With an APR of only 9.5 percent, it will take only twentytwo months to pay
off the loan, and you’ll pay $1,000 less in interest. Now let’s assume you only pay $175 on the
card. It would take you 131 months, or almost 11 years, to pay off the $10,000 at 18 percent
and 77 months, or over 6 years, to pay off the $10,000 at 9.5 percent, and you will have paid
$12,872 and $3,364 in interest respectively.
W W W . 1
P L U S 1 2 . C O M
1PLUS12 © 2015
Page 7 of 33

Clearly, getting out of debt requires credit savvy. Examine the terms of your credit card agreement. If

you don’t like what you see, call the company and see if it will lower its rate to keep you on board. If
not, start looking for a better card. When you find one with a lower APR, make sure it isn’t a
temporary promotional offer. Also make sure there aren’t any transfer fees. You don’t want to incur
debt to consolidate debt.
Homeowner’s Quick Tip
If you’re a homeowner and your report is excellent, find out whether you’re receiving the best
possible mortgage rate. Nationwide, homeowners spend $100 million more than necessary
each year because they don’t know they qualify for lower interest.
W W W . 1
P L U S 1 2 . C O M
1PLUS12 © 2015
Page 8 of 33

Auto Advantages
With some auto prices approaching the cost of a small home, consumers can’t be lazy about
comparison shopping. Here are a few moneysaving resources available to car buyers:

∙ CarPoint (
www.carpoint.msn.com
). This allows you to browse one hundred models
inside and out, determine invoice prices, and contact local dealers.

∙ Consumer Reports New Car Price Service (18006514636;

www.consumerreports.org
). For a nominal fee, this provides uptodate pricing
information. You’ll find out what a model actually costs a dealer, giving you a basement
price for negotiating.

∙ CarBargains (18004757283;
www.checkbook.org
). Once you’ve selected a make and
model, this nonprofit service will obtain firm, rockbottom quotes from five local dealers
for a fee of $165.

∙ Keep your old car as long as repairs are not too costly.

If you need a car, consider leasing one or buying a secondhand one in good condition. Another

option: shop for a new car through an autobuying club or on the Internet, which can save
hundreds or even thousands of dollars.
W W W . 1
P L U S 1 2 . C O M
1PLUS12 © 2015
Page 9 of 33

Check Your Credit History

Records of all the financial transactions you make—from retail purchases to home equity
loans—are fed to credit bureaus, which digest the data and issue a credit report. The report
grades your credit worthiness and is available to anyone with whom you wish to do business.
Based on your rating, creditors will decide not only whether to grant you a loan or card but also
what interest rate to charge you. The lower your rating, the higher your interest rate. You’re
legally entitled to review your report, and you should do so. Errors are frequently made and
should be corrected. The Federal Trade Commission’s Bureau of Consumer Protection has
guidelines for disputing inaccuracies. To order a copy of your report, contact any or all of these
major credit bureaus:
∙ Trans Union (18008884213;
www.transunion.com
)

∙ Equifax (18006851111;
www.equifax.com
)
I.
W W W . 1
P L U S 1 2 . C O M
1PLUS12 ©
2015
Page 10 of 33

Debt Reduction Planning and Action Steps

Now that you have an idea of how to get to living within your means so that you can be free to
expand your means, it’s time to look at what specific actions you can take right away to
eliminate your debt.

I remember that I had a lot of debt when I started my journey of self discovery and
transformation back in 2003. I recall that I had a debt of about $100,000 and growing while I
was working as an engineer and making good salaried income, my spending habits were
having me accumulate a lot more debt than my income could service. Of course, because I was
living such a comfortable and sometimes extravagant lifestyle, I never stopped to notice how
fast my consumer debt was rising. Much of my debt came from my student loans and credit
cards. As time went on, I noticed that there were number of things I wanted to do or buy that I
couldn’t because I couldn’t afford them as I used to initially. Eventually, I saw that my lifestyle
was becoming a lot more restrictive than I wanted it to be and then I would try to fool myself
and justify to myself that I didn’t want those things after all or that I did not want to do those fun
hobbies anymore. This experience of my life came to a resounding peak when I had an
opportunity to participate in a very powerful training program at Landmark Education that I had
put deposit to registered for and found that I could not afford to pay the balance. I had a very
straightforward conversation with one of the staff members of the company that was delivering
the program. That conversation changed my financial life. I still remember the conversation as if
it happened yesterday.
W W W . 1
P L U S 1 2 . C O M
1PLUS12 ©
2015
Page 11 of 33

I called Landmark Education and said that I would not be able to participate in their
transformational Advanced Course that I had initially registered for because I could not afford to
pay the balance of the tuition by the balance due date that was a month away. The staff
member on the other line just simply said to me “Well when do you want to stop having your life
be dictated by your finances or lack of?” I said “Well as soon as possible!” To which he replied,
“Then work it out! And call me back when you’ve done so! And if you can’t, then we’ll talk about
that when we cross that bridge in a month” and then hung up!
In that moment, something shifted in me and I decided to take control of my finances and start

paying off my debts. I thought it was best that I learn my lesson and pay back the money. As
those of you who have fallen behind know, it is hard to get ahead with debt hanging over your
head. In fact to make extra money, I even took on a paper route delivering newspapers from
1am to 4am for a month. I remember the worst were those Saturday nights when it would be
raining and the papers were extra thick because they had so many pamphlet inserts. Each
pamphlet I had to stuff in the paper by hand and then try to squeeze the whole bundle into
these cellophane plastic water proof baggies that always seemed like they were way too small
to hold these gigantic newspapers. Once that was all done for the hundred or so papers then it
was all about trudging through the cold wet streets dropping huge cellophane wrapped
newspapers door to door for the next 3 hours. Those were the toughest nights by far. In
hindsight, however, I can say that doing all that I could do to keep paying back the money owed
was a wise decision as it made me stronger as a person.
All through this period I kept up my monthly payments working at so many other odd jobs, after
working at my day job, just to cover my debts, eat and keep a roof over my head. So, I know
well what it’s like to be swimming in debt. I know what it’s like to struggle financially as well as
endure the stress and anguish it causes.
W W W . 1
P L U S 1 2 . C O M
1PLUS12 ©
2015
Page 12 of 33

For me, paying the money back was a wise decision because it made me smarter as an
investor and businessperson, and more confident about my future. By 2006 I was out of
consumer debt and had paid back most of the student loans. I can say that today, I am
extremely grateful from the experience and the lessons I learned digging my way out of debt
and from learning how to live within my means while at the same time expanding my means.

As most of you know there is good debt and bad debt. Simply put, good debt makes you rich

and bad debt makes you poor. More specifically, good debt is debt on which someone else
makes your payments, and bad debt is debt you pay for. An example of good debt is a loan on
a rental property where your tenant pays rent and the rent covers your mortgage and expenses
— and puts additional money in your pocket. An example of bad debt is the debt on your car or
your home, debt you have to pay for.
Many people simply say, ‘Get out of debt.” That makes good sense if you are loaded with bad

debt. But if you have a higher financial IQ you may want to get into debt… a lot of good debt…
debt which someone else pays for and debt that will ultimately make you richer. In financial
terms, good debt is often referred to as leverage.
A word of caution before running out to get into good debt: Please remember that debt is a
doubleedged sword. If the economy changes, good debt can change to bad debt very quickly.
W W W . 1
P L U S 1 2 . C O M
1PLUS12 ©
2015
Page 13 of 33

The bottom line is that in order to become a successful investor you first must put your personal
finances in order. Simply said, if you have too much bad debt due to poor financial habits,
please do not get into any more debt, good or bad. Once you get your personal finances in
order and under control, you may be ready to go out and look for sound real estate investments
to grow richer on. Remember, the problem with having too much bad debt is that bad debt
makes it harder to acquire good debt. For many people, just getting out from under bad debt is
enough to make their financial future brighter, even if they do not invest.

Next, take the following 10 steps I used to get out of bad debt.

W W W . 1
P L U S 1 2 . C O M
1PLUS12 ©
2015
Page 14 of 33

STEP I
Tell Yourself the Truth

The first and probably the toughest step of all was to commit to tell myself the truth. To face the
grim reality of how much I owed and to whom I owed the money to. I knew I could easily lie to
myself and pretend I was okay financially, which is what many people do.

STEP II
Stop Accumulating Bad Debt

I basically put a freeze on all debt. Anything I purchased was paid off that month. I stopped
adding to my existing credit card balances and took on no new loans. That step alone forced
me to be much more cognizant of what monies were flowing out.
W W W . 1
P L U S 1 2 . C O M
1PLUS12 ©
2015
Page 15 of 33

STEP III
Make a List of all the Debt You Owe

Write down every single debt you owe. This may include credit cards, school loans, car loans,

boat loans, IOUs to individuals including friends and family members, store credit accounts,
home shopping and online balances due, vacation home, and your personal residence. Do not
include debt for investments, such as rental properties and business investments. And just a
reminder, your home is not considered an investment in this exercise. We are dealing only with
bad debt and bad debt is debt that you pay for. Good debt is debt that someone else, such as
your tenants, pay for.
I realized it was important to clean up my past, and at the same time I needed to create my
financial future. So I added one more piece to the equation.

W W W . 1
P L U S 1 2 . C O M
1PLUS12 ©
2015
Page 16 of 33

STEP IV
Pay Yourself First

I decided that with every dollar bill that I made, I would take a set percentage off the top, before

paying any bills. It was vital that the money come to me first, instead of paying everyone first
and hoping there would be something left over.
I set up 3 accounts: one for savings, one for debt elimination and one for investing. I then set

the percentage for each bank account at 10% each, for a total of 30% of all income I received.
If I received $99 in income then $9.90 went into the savings account, $9.90 into the debt
elimination account and $9.90 into the investing account. I did this with every dollar of income I
received.
Here is a key point – it’s not the percentage or the dollar amount you commit to that’s most
important. You may choose to start with only 2%. What’s important is creating the habit of
putting this money aside every month. I had formed some bad financial habits which were what
got me into so much debt. In order to pay off my debts and build my financial future I needed to
create new habits that supported me in doing so.
W W W . 1
P L U S 1 2 . C O M
1PLUS12 ©
2015
Page 17 of 33

The steps are simple:

I. Set up three accounts: savings, debt elimination, investing (You could use a spreadsheet
to track the amounts in each account and just have 1 actual bank account. This way you
can save on fees associated with keeping an account open)

II. Decide what percentage of your income will go into each bank each month.

III. Hold yourself accountable to “pay yourself first” with every dollar that comes into your
home.

Once the first four steps are in place, you are ready to move on to the formula for the
elimination of bad debt.
Steps V through X walk you through the specific formula that I followed to get out from under

the debt I owed. If you follow these guidelines closely you will be amazed at how quickly you
will erase each debt, one at a time, from the list you put together. I paid off the debt i had
amassed within five to seven years. You can too.

W W W . 1
P L U S 1 2 . C O M
1PLUS12 ©
2015
Page 18 of 33

STEP V
Make A Visual Picture of Each Debt

From the list you’ve made in Step #3, create a spreadsheet that contains each of the debts and
from there you can then determine which order each debt will be paid off. Here is how you do
that.

Create a spreadsheet with the following headings:
Name of Debt Total Balance Minimum Monthly Payment Score Rank

In far left column is the name of the debt, such as Visa. In the next column write in the total
balance owed. In the next column write the minimum monthly payment due. Now, divide the
total balance owed by the minimum payment due. For example, if you owe $2,000 on your Visa
and your minimum amount due each month is $100, then $2000/$100 = 20. Write that number
in the column with the heading “Score” and highlight it in red. It would look like this:

Name of Debt Total Balance Minimum Monthly Payment Score Rank

Visa $2000 $100 20

W W W . 1
P L U S 1 2 . C O M
1PLUS12 ©
2015
Page 19 of 33

Do that for every debt on your list. If you owe money to an individual with no set minimum
monthly payment then decide what you want that monthly payment to be.
When completed, your spread sheet may look something like this:

Name of Debt Total Minimum Monthly Score Rank

Balance Payment

Visa $2000 $100 20

Mastercard $2400 $150 16

Amex $1500 $120 12.5

School Loan $6000 $250 24

Car Loan #1 $12,000 $350 34.3

Car Loan #2 $20,000 $700 28.5

Personal Loan – Carol $4000 $175 22.8

Dept. Store C.C. $800 $100 8

Home Store C.C. $1200 $120 10

Jewelry Installment Loan $400 $45 8.8

Personal Residence $150,000 $900 166.6
W W W . 1
P L U S 1 2 . C O M
1PLUS12 ©
2015
Page 20 of 33

STEP VI
Determine the Order for
Paying Off each Debt

Looking only at the highlighted numbers of each debt, the Score number, find the lowest
number and place a #1 next to that debt under the column with heading of “Rank”. Find the next
lowest number and write a #2 in it’s Rank column. Continue to do that until there is a ranking
next to each of your debts. Again, go from the lowest to the highest number. The highlighted
numbers in the “Score” column are the number of months it will take to pay off that specific
debt.
For example, if the smallest score you find is a 3 then you would write a #1 next to it. This is the
first debt you will pay off. If the largest highlighted number is 300 then this would be the last
debt you pay off.
W W W . 1
P L U S 1 2 . C O M
1PLUS12 ©
2015
Page 21 of 33

It will look something like this:

Balance Payment

Visa $2000 $100 20 6

Mastercard $2400 $150 16 5

Amex $1500 $120 12.5 4

School Loan $6000 $250 24 8

Car Loan #1 $12,000 $350 34.3 10

Car Loan #2 $20,000 $700 28.5 9

Personal Loan – Carol $4000 $175 22.8 7

Dept. Store C.C. $800 $100 8 1

Home Store C.C. $1200 $120 10 3

Jewelry Installment Loan $400 $45 8.8 2

Personal Residence $150,000 $900 166.6 11

W W W . 1
P L U S 1 2 . C O M
1PLUS12 ©
2015
Page 22 of 33

The question I often hear is, “Shouldn’t I pay off my debt with the highest interest rate first?”
Not necessarily for this formula to work. The reason is this: It’s important that you see some
immediate results in this process otherwise it is easy to get discouraged and quit before even
paying off one of your debts. By paying off the debt with the lowest Score, you are also paying
off the debt that will be the quickest to pay off. So you see results quickly. You have a win early
on. You can see what you are doing is working. This ‘progress’ makes it easier to keep moving
ahead with this formula.
So now you have a clear outline of every debt you owe and the order in which you will pay off

each debt.

W W W . 1
P L U S 1 2 . C O M
1PLUS12 ©
2015
Page 23 of 33

STEP VII
Find an extra $100-$200 per month

“Where am I going to find an extra $100 to $200 a month?” you ask. Face it, if you cannot
come up with an additional $100 each month, then what do you think your chances are of
becoming financially set in life? Probably pretty slim. If $100 per month is stopping you then
financial freedom will be nearly impossible to achieve.
So do whatever you need to do, that is within legal, ethical and moral boundaries to create this

extra amount of money each month. It may be a parttime job on Saturdays, selling items on
ebay, or creating a miniseminar on your favorite hobby. You will probably surprise yourself
with how easy it is.
Having said that, there’s nothing stopping you from creating more than $200 per month either.

W W W . 1
P L U S 1 2 . C O M
1PLUS12 ©
2015
Page 24 of 33

STEP VIII
Except For Your #1 Debt, Pay Only the
Minimum Payment Required of Each of
Your Debts

Let me guess, you’ve been told if you just pay a little extra on each credit card or loan then you
will reduce your debt quicker. Is that correct? That’s what I was told. However, my credit cards
never seemed to get paid off. I didn’t feel I was making progress or getting ahead.
For this formula to work, pay only the minimum payment due on each debt and put the extra
$100 to $200 towards debt #1. So against debt #1 you are paying the minimum monthly
payment required PLUS $100 to $200 extra.
Continue doing this for 3 months (ie. For a full quarter). On the next months payment date, for

Debt #1 only pay the minimum payment PLUS the additional $100 to $200 PLUS all the money
that had accumulated in the Debt Elimination account. Continue this every month and every
quarter until Debt #1 is completely paid off.
W W W . 1
P L U S 1 2 . C O M
1PLUS12 ©
2015
Page 25 of 33

Go back to your spread sheet of debts and place a big strikethrough through debt #1.

Balance Payment

Dept. Store C.C. $800 $100 8 1

And Celebrate!

W W W . 1
P L U S 1 2 . C O M
1PLUS12 ©
2015
Page 26 of 33

STEP IX
Move On To Debt #2

You made it through the first milestone. Congratulations! Turn to debt #2. Except for debt #2,
pay only the minimum monthly payment required for all other debts. For debt #2 pay the
minimum payment required PLUS the full amount you were paying on debt #1.

For example, on debt #2 you will pay the following each month:

∙ The minimum monthly payment required on debt #2.

∙ The minimum monthly payment you were paying on debt #1

∙ The additional $100 to $200 per month.

∙ At the end of each quarter, on the next month’s payment also pay using the money that

has accumulated in the debt elimination account

W W W . 1
P L U S 1 2 . C O M
1PLUS12 ©
2015
Page 27 of 33

∙
So now you are paying more than simply the monthly required payment and the extra $100 to

$200. With each debt you pay off you will be accelerating your payments on the next debt.
Continue each month until debt #2 is paid off. Then put a big strikethrough through debt #2 —

and celebrate!
Move onto debt #3. Pay the following towards debt #3:

∙ The minimum monthly payment required on debt #3.

∙ The total amount you were paying on debt #2, which included:

o The minimum monthly payment you were paying on debt #1

o The minimum monthly payment you were paying on debt #2

o The additional $100 to $200 per month

∙ At the end of each quarter, on the next month’s payment also pay using the money that

has accumulated in the debt elimination account
W W W . 1
P L U S 1 2 . C O M
1PLUS12 ©
2015
Page 28 of 33

Continue each month until debt #3 is paid off. Put a big strikethrough through debt #3. Continue
this process, always paying the minimum monthly payment due plus everything you were
paying towards the previously paidoff debt. And at the end of each quarter, on the next
month’s payment also pay using the money that has accumulated in the debt elimination
account.

Balance Payment


Home Store C.C. $1200 $120 10 3

When all of the debts in this example are paid off, starting with the $800 Jewelry Installment
Plan and ending with the $150,000 personal residence, that is the proof that this formula works.
By following this getoutofdebt formula all the debts, excluding the residence, were paid off in

just over three and a half years. This is over $50,000 of debt. It then took less than four and a
half years to pay off the personal residence. So in just eight years this person is completely
debtfree. (The personal residence alone would have taken over 20 years if a traditional
payment schedule were followed.) And now that all the debt is paid off this person has $2,810
per month to put towards investments.
That is the magic behind this formula. And the real beauty of it all… all it took was an extra
$100 per month.
W W W . 1
P L U S 1 2 . C O M
1PLUS12 ©
2015
Page 29 of 33

Eventually your spreadsheet will look like this:

Name of Debt Total Minimum Monthly Scor Rank
Balance Payment e

Visa $2000 $100 20 6

Mastercard $2400 $150 16 5

Amex $1500 $120 12.5 4

School Loan $6000 $250 24 8

Car Loan #1 $12,000 $350 34.3 10

Car Loan #2 $20,000 $700 28.5 9

Personal Loan – Carol $4000 $175 22.8 7

Dept. Store C.C. $800 $100 8 1

Home Store C.C. $1200 $120 10 3


Personal Residence $150,000 $900 166.6 11

W W W . 1
P L U S 1 2 . C O M
1PLUS12 ©
2015
Page 30 of 33

If you stick with this formula you will be amazed at how quickly you can become debt free.
Many people report they are completely out of debt within five to seven years.

W W W . 1
P L U S 1 2 . C O M
1PLUS12 ©
2015
Page 31 of 33

STEP X
The Monthly Amount You Paid on Your
Final Debt – Invest It!

This process does not stop once you’ve paid off all your debts. This is the point where you go

from being debtfree to becoming rich!
Take the total amount of money you were paying each month on that last debt you owed and

paid off, and invest it. Do this every month. It’s very likely that the monthly amount has grown
quite a bit since you started this process. Imagine having that much money every month to
invest and to, more importantly, contribute towards you becoming financially free – never
having to worry about money again. Living the life you choose… because money is not an
issue!
W W W . 1
P L U S 1 2 . C O M
1PLUS12 ©
2015
Page 32 of 33

Few Bonus Tips

1. Remember this is a process. In order for this formula to work you have to stick to it
every month. If you say to yourself, “I’ll go off the plan just this month.” then chances
are you’ll begin a habit of not following the formula and your debts will not go away.

2. Do you have to be debtfree before you invest? No. This is your choice. I had quite a bit
of debt when I started investing AND I was also following this debt formula every single
month. This formula not only answers the question, “How do I get out of debt?” It also
handles the objection of, “I don’t have any money to invest.” Now, you can do both.

3. I highly recommend, if you are married or in a longterm relationship, that you go
through this process together. And the same applies to investing. Investing is an
ongoing educational process. If you and your partner are learning together, growing
together, making money together, and most importantly, driving towards a common goal
of freedom together — that makes for an exciting life together.

4. Enjoy the process, keep your spirits up and your eyes on a brighter future.

5. Keep going. If you feel like quitting, talk things over with a friend, your mentor and your

bookkeeper. Remember, two minds are better than one. Talking it over with trusted
friends or professional financial people is a lot smarter than arguing with yourself or your
partner.
W W W . 1
P L U S 1 2 . C O M
1PLUS12 ©
2015
Page 33 of 33

1plus12 - Axioms of Freedom - I of Xiii - Freedom From Debt

Hochgeladen von

Dokumentinformationen

Originaltitel

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

1plus12 - Axioms of Freedom - I of Xiii - Freedom From Debt

Hochgeladen von

Copyright:

Verfügbare Formate

AXIOMS OF FREEDOM

FREEDOM FROM DEBT

∙ Respect your budget; if you’ve reached the $200 food limit, skip the potato chips or the

∙ Consider starting a part­time business, even if you have a full­time job, and review your

Eliminate All Unsecured Debt

Simply speaking, there are two types of debt: secured debt and unsecured debt. Secured debt

Some Notes on Credit Cards

Clearly, getting out of debt requires credit savvy. Examine the terms of your credit card agreement. If

Homeowner’s Quick Tip

∙ Consumer Reports New Car Price Service (1­800­651­4636;

If you need a car, consider leasing one or buying a secondhand one in good condition. Another

Check Your Credit History

Debt Reduction Planning and Action Steps

In that moment, something shifted in me and I decided to take control of my finances and start

As most of you know there is good debt and bad debt. Simply put, good debt makes you rich

Many people simply say, ‘Get out of debt.” That makes good sense if you are loaded with bad

Write down every single debt you owe. This may include credit cards, school loans, car loans,

I decided that with every dollar bill that I made, I would take a set percentage off the top, before

I set up 3 accounts: one for savings, one for debt elimination and one for investing. I then set

Steps V through X walk you through the specific formula that I followed to get out from under

Name of Debt Total Balance Minimum Monthly Payment Score Rank

Name of Debt Total Balance Minimum Monthly Payment Score Rank

Name of Debt Total Minimum Monthly Score Rank

So now you have a clear outline of every debt you owe and the order in which you will pay off

So do whatever you need to do, that is within legal, ethical and moral boundaries to create this

Continue doing this for 3 months (ie. For a full quarter). On the next months payment date, for

∙ At the end of each quarter, on the next month’s payment also pay using the money that

So now you are paying more than simply the monthly required payment and the extra $100 to

Continue each month until debt #2 is paid off. Then put a big strikethrough through debt #2 —

∙ At the end of each quarter, on the next month’s payment also pay using the money that

By following this get­out­of­debt formula all the debts, excluding the residence, were paid off in

This process does not stop once you’ve paid off all your debts. This is the point where you go

Take the total amount of money you were paying each month on that last debt you owed and

Few Bonus Tips

5. Keep going. If you feel like quitting, talk things over with a friend, your mentor and your

Das könnte Ihnen auch gefallen

∙ Consider starting a parttime business, even if you have a fulltime job, and review your

∙ Consumer Reports New Car Price Service (18006514636;

By following this getoutofdebt formula all the debts, excluding the residence, were paid off in