If you've ever struggled to keep up with all those
darn payments-including the credit card and car
payments-you'll want to tune in to this important
article...
More and more people are getting swallowed up
by debt. I'm sure you've read and heard many of the
statistics and stories in the news. One of the keys to
financial independence is to get rid of your bad debt
and acquire good debt.
Bad debt is debt that makes you poor, such as credit
card debt, car loans, etc. - this is consumer
debt. Good debt is debt you acquire that actually works
for you. The best example of good debt is a mortgage
loan on a rental property that throws off positive cash
flow every month. Good debt is money that you borrow
to purchase assets that put money in your pocket.
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5 Steps to Eliminate Your Bad Debt and Acquire
More Good Debt
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Step 1 - Stop accumulating bad debt. Whatever you
purchase via credit cards must be paid off in full at the
end of each month. No exceptions.
Step 2 - Make a list of all your consumer (bad) debts.
This includes each credit card, car loans, and any other
bad debts you have acquired.
Step 3 - Refinance your mortgage to consolidate your
high interest debts. Chances are you've built up
enough equity in your home to pay off your high
interest credit cards and consumer loans.
As your mortgage advisor, I can help determine
how much equity is available and how much you
can save by increasing your mortgage balance to
pay off bad debts at lower interest rates.
Step 4 - Explore the option of using additional
equity in your home to increase cash flow. After
you consolidate your bad debts you may still
have equity left over to invest in a secure cash
flow producing asset.
For example, the equity could be invested in a
First Mortgage Fund that earns 9% interest. With
a home mortgage interest of 5% the net return
on this investment would be 4%. That return can
be left to compound or withdrawn every month.
Step 5 - Pay yourself first. Put aside a set percentage
from each paycheck or each payment you receive
from other sources. Deposit that money into an
investment savings account. Once your money goes
into the account, NEVER take it out, until you are
ready to invest it. Now - instead of just paying
creditors - you're paying yourself for only one type
of purchase: assets that give you positive cash flow
each month. By adopting this as a consistent habit
you will be out of the Rat Race faster than you ever
dreamed!
I look forward to hearing about your success stories
as you apply these financial principles to your life.
Your trusted mortgage advisor,
Ronald Ephard
778-881-0276
www.tmacc.com/ronaldephard
