Transforming Debt Into Wealth – 3 Steps You Can Take Towards Financial Freedom

5% Of The Population Holds 80% Of The Worlds Wealth

Seriously, you must have seen this statement a couple of times already. You probably have seen this in so many years, yet fail to understand why is it that ordinary people can achieve greatness in a matter of years.

If you are serious about transforming debt into wealth using a proven system, then let me assure you that you are truly blessed today. More than 68% of all American households have an annual income that earns less than $30,000 a year. Why not earn double or even triple of that!

Step 1: Conquering The Fear Of Debt And Money

Your first task is to be able to overcome the feelings of fear in your mind when you see the bills come in. It makes your head ache and your heart pound faster. Nevertheless, keep this in mind. You are still alive and that means you have the capability to change your situation for the better.

God has entrusted every human to a task in this world and it is a command in the Bible to “be fruitful and multiply”. Therefore, if you have a debt try to be creative in clearing your highest interest rate debts first.

Step 2: Time To Manage Your Time For More Money

If you work on 60 hour weeks or more than I can understand where you are coming from. My friend has this kind of schedule but he’s serious in transforming debt into wealth and has a plan.

All it takes is some research in what you can do to increase cash flow. Here’s a few suggestions:
offer your neighbors weekly tuition for their kids on math

start a small business part time online

invest in a small investment fund that generates cash flow (oil and gas are popular)

Step 3: Learning Your Way To Success

Even though you might think that getting another degree or PhD certification is the key to earning a higher income, we will not discuss about this. There are many other articles talking about this but I’m going to point a different direction to you.

Some of the most successful people actually invests their time in reading books. Books that teach them how to generate income or improve their personal skills or development. My point is either you improve your mind or you stay on a plateau in your life.

In all of the steps above, probably the best advice that can help transforming debt into wealth very quickly is in step 3. You can invest in a business but it is really knowledge that will turn your future around. Oh yes, step 1 is important too. Every wealthy person first has a strong emotional control.

Finances – The Right Question

It’s the age old question asked by financial advisors, “Can you really afford it?” Unfortunately, most Americans, working as trained professionals in reputable industries, and filled with an innate sense of entitlement, will answer that question “Yes. Of course I can afford it.”

And why not? Certainly after a 40-50 hour exhausting work week you should be able to afford a decent wardrobe, your kid’s tuition for summer camp, and a nice family vacation. So why, when we work so much and so hard, are Americans in debt? Why do our salaries always fall short of what we need to survive?

The answer lies in the question. I don’t mean to sound ambiguous. The fact is, if we base each purchase we make on the question “Can I really afford this?” we set ourselves up for budget-breakers. Fortunately, there is a better question we can ask ourselves that effectively cleans up our spending habits, and leave our dignity in tact.

In their 1992 National Bestseller, Your Money of Your Life, Joe Dominguez and Vicki Robin lay out nine steps that will transform your relationship with money and achieve financial independence. In my experience, step two is enough to break most bad spending habits. This exercise changes our mind-set by asking a question we may not have thought before.

The exercise involves the concept of Life Energy. Life Energy is your time in hours traded for money. Some of us make an hourly wage. This is not quite the same as Life Energy, because it only includes the time you punch in to the time you punch out. It doesn’t include the hidden hours we give to our employers: the time required for grooming ourselves, commuting, cooling down after a hard day, (not to mention the vacations and entertainment we must have to maintain our sense of balance.) Nor does our hourly wage reflect the money we must spend just to have the opportunity to work for our employer. I’m talking about the expenses connected with costuming, transportation, meals, and other job-related costs. To know what your real hourly wage is, add all the extra job-related hours to your normal work week, and subtract the job-related expenses from your pay. Now you know how much you really make at work. A simple division problem shows you how much money you earn per hour. This is the amount of money you trade for your time-your Life Energy. Keep this number in your head.

Whether or not you find this number satisfactory (that is considered in another step of the program) you are now equipped to ask the right question. The next time you are at the check out counter don’t ask if you can afford that new “gazingus pin.” Instead, think of your new hourly wage and ask if this purchase is worth that amount of your Life Energy. For instance, let’s say your adjusted hourly wage is $11 per hour. If your new gazingus pin is $67, that’s equivalent to over six hours of your life! Is it worth it? This question can be very sobering for those used to saying “Sure I can afford it!” All of the sudden, the question becomes, “Do I really want to sacrifice that much of my life for this?”

Add to this question the subject of debt and buying on credit. If you are making your purchase on a credit card you are automatically paying a premium for time. And if you are struggling to pay off debts, you must realize that you won’t even have the opportunity to work the six hours to pay for your gazingus pin for several days, weeks or even years. By then it may be up to ten, fifteen or even thirty hours of Life Energy. All for this gazingus pin. Is it worth it? Do you love this gazingus pin so much that five years from now, when you’ve paid your credit card down enough to reconcile this purchase, you won’t mind throwing thirty hours in at work for it? Is your job so enjoyable?

Kind of puts paid employment into perspective, doesn’t it? It also transforms our all-American sense of entitlement. If we look at time as money, maybe we’ll be a little less cavalier and a little more cautious about where we throw it.

The Shocking Truth About Transforming Debt into Wealth

Are you tired of living month to month, paycheck to paycheck? Do all of your financed purchases pale in light of the debt you obtained to acquire them?

How would you like to learn how to go about transforming debt into wealth? It can be done, with discipline, a change in habits, and a solid plan.

First, discipline. You need to decide for sure that this is what you want to do. You don’t want to be a slave to debt any more.

You want to tell your money what to do for you, rather than having your debt tell you where to put your money. Remind yourself of these things, and it will be much easier to maintain your self discipline in eliminating debt and becoming truly wealthy.

Second, habits. This is a biggie. This is where your friends and family and society in general will think you are completely off your rocker.

You have to stop spending money you don’t have. This means no credit card purchases (cut those suckers up!), no financing automobiles, and no personal loans.

You’ll find on your journey of transforming debt into wealth that the truly wealthy don’t use these things.

You can do this, and if you do this for some time, not purchasing anything that isn’t a strict need or specifically allotted for on your budget, in a few short years, you will have the CASH to buy what you want and need, and you will wonder why you ever thought you had to have credit in the first place.

Third, a plan. Your plan is key. Going straight to cash is step number one. (Did you cut up those cards yet?)

Step two is working out a budget. The budget is a comprehensive listing of every single category in which you spend money, spelled out at the beginning of a pay period, before you spend a dime.

You need to tell your money where to go, not the other way around. Pay your bills, and put money in savings to save up for annual expenses like car tags and homeowner’s association dues.

Put all spending money in envelopes, labeled for their purpose. (e.g., groceries and personal care products, gasoline, gifts, eating out, medical, etc.)

And now you’re on your way to transforming debt into wealth. Get rid of the debt, and you’ll have your wealth!