I love debt - it motivates me (more on that in tomorrow's post). But many folk don't get the same thrill living on the edge.
Most people want to quit debt worries fast. Not only does debt take a lot of fun out of life, it also prevents them from taking vacations when they want to, giving gifts to family, and buying luxury items to make life fun.
So while you're waiting for a lotto win to knock over your debt mountain, why not get started on getting rid of it permanently and fast!
This is something you can get started on today, and the benefits will flow on for the rest of your life.
A while back I revealed my method for reducing debt fast, but I've since discovered a new twist that makes it even better...
Back then I've recommended that you pay off the smallest debts first. And as each debt is finished, you put that extra payment to the next largest.
This still applies, but you can now do it in a more efficient way.
Here's how 'Kill Bills V2.0' works:
1. Make a list of all the consumer debt you have. That doesn't include day-to-day expenses like food and rent.
2. Now, beside each item write down your monthly payment.
3. Divide that monthly payment into the main total for each one. This will give you a ratio that prioritizes your debts far more efficiently.
Here's an example...
----------Loan Bal. -----Monthly -----Ratio
House ---$100,000 -----$1500 -------66
Car -------$12,000 ------$500 --------24
Visa ------$7,000 --------$350 --------20
Loan -----$5,000 --------$200 --------25
Now, choose the payment with the lowest ratio. In this example above, it's the Visa card with a ratio of 20. Use any extra income to pay that card off first. For example, you might find you're able to pay $600 a month in total off your Visa.
That's an extra $250 a month. This means that the card will be fully paid off in around 11 months.
Here's where it starts to get better.
Now take that monthly Visa payment of $600 and use it to pay off the next low ratio item... in this case the car with 24 ratio. Because of the extra payment, you're now able to pay $1100 a month off the car, which means that it will be fully paid off in just a further 6 months!
Here's why it works...
Because you've been paying the car off at a regular amount already, it has a reduced balance of $6,500 after you finish paying the Visa card. So now paying the car back at $1100 a month lets you pay it off completely in 6 months.
Now that you don't have the car payment, you have a total of $1600 a month (ex-Visa and ex-car payments) free to apply to the next low ratio, the loan of $5,000.
On and on it goes, rapidly speeding up until at the final loan - your house - you have over $3,000 a month to apply to that amount. Surprise - it will take only a little under three years to pay back that mortgage!
Now you're completely debt-free, and altogether it's probably taken you less than 5 years! Most people are amazed at the speed at which it works.
Five years is good - but to do this even more quickly, you'll need a little extra income to put towards the payments.
If you have some spare money over after the monthly payments, great. If you don't, look for ways to increase your income by reducing some expenses. Or better - increase your income.
There are two success secrets for reducing your debt...
SECRET #1: Once you've decided you are going to pay down your debt, don't SPEND. Any further spending will just increase the time it takes you to clear everything.
SECRET #2: Daily, visualize the life you going to have free of debt. This is important because it gives you the incentive to carry on when times are tough. Also reward yourself after each major success. Go out to dinner, buy or sell something special... just make sure that you celebrate at each stage.
If you've taken the time to read and work out this system, you are 99% ahead of the rest of the population who will never be free of debt for most of their lives. Enjoy!
--- Hi Ken; ...I followed your advice... I WON $100,000.00!!!!!! on my second try. Your system works and your tips are very important to follow. I'm continuing to play and expect to win again. I'll write again when I do. Thanks for a system that works.
--- Ken, I bought your system a couple of years ago... Since then computer crashed ,new computer, changed internet carriers, etc, etc. Anyway still kept trying the system and 2 weeks ago won 2nd division powerball $100,000.00... Thanks