Debt is like a double edge sword, it is a weapon of destruction. You can use it to kill the enemies, protect your family or you may even use it to harm yourself. There are basically two kinds of debt: there’s the good debt and there’s bad debt. Looking from a positive point of view, you may use debt as a form of leverage. For instance, if you borrow from a bank for a new business venture and it turned out to be profitable or expanded your plant equipment to meet increase in market demand. It could also be that you took up a personal loan in the bull market to buy blue chips shares or took up take a student loan to improve your skillset to make yourself more marketable. Then all these leverages are good debt.
On the other hand, if the new business venture failed due to poor management or you expanded too rapidly or suddenly the stock market went south, or due to unforeseeable circumstances, you did not complete the course. You lose money and it became a debt.
The second kind of debt, the worst kind of debt. For instance, taking loans for a new car, payday loans, credit card debt, personal debt for personal consumption. Or any type of debt that you are borrowing for your personal pleasure. All these don’t generate income or money. It doesn’t make you richer. Instead it makes you poorer. That’s what I call debt. And when you are unable to pay on time, they become bad debt.
It’s simply a form of leverage. How do you use this leverage to make you richer or poorer? So I started off with because I was a lousy businessman. I had a lot of bad debt and I started paying them off and now I use leverage for good. I want you to think about it. Almost every millionaire and billionaire in the world use debt or leverage in some form. Almost every single one of them.
So today, I have very little bad debt. I have a lot of good debt. That makes me richer. That makes me money. So let me give you three steps that will help you get out of debt. Step number one focuses on increasing your income, not lowering your debt. I want you to ask yourself a question. Making the money that you are making right now. How long would it take you to pay off all your debt? Would it take you three months, six months, one year, two years, five years, 10 years 20 years? When you think in those terms, it’s so overwhelming. How the hell am I going to pay off all this money that you owe? So it’s unrealistic to think you can be debt-free or get out of debt, with your current income. At least for most people, it’s virtually impossible. So what you want to focus on is increasing your income, so you can pay off that debt faster. What you need, is it doesn’t matter what it is that you do?
You could have a job, 9 to 5 J-O-B. You could have a business, it doesn’t matter. But what you need is what I call a high-income skill. A side hustle that you could make money on the side in your spare time when you’re not at work. In your business, to bring more money in so you can pay off that debt faster.
Let me give you an example: one of my best friends’ husbands. He is a good employee. He makes about $ 100,000 a year with his job. Pretty good income pretty good pay. But in his spare time in the summertime, he actually teaches golf. And in the wintertime in Vancouver, he teaches people how to ski. So he’s a golf instructor in the summertime and then in the wintertime. He is a ski instructor. It’s something that he loves, it’s his passion. But he also makes good money doing it. By having that high-income skill on the side on top of the 100K that he’s bringing in every year, he makes an additional $ 30,000 a year as a golf instructor and a ski instructor,
That’s a high-income skill! Now I want you to imagine this. With whatever you’re making right now if you could bring an additional $3,000 or $5,000 or $10,000 a month without changing what you’re doing. Just adding an additional stream of income, how much faster would you pay off that debt? That’s exactly what I did. I worked in my early 20s. I told you. I was $150,000 in debt. I was making only a few thousand dollars a month. But as I was working and developing my high-income skill, I was making more money. I was then making 5,000 a month, 8,000 a month, 10,000 a month, 15,000, a month, 20,000 a month, 30,000 a month. You see, when, if I just focus on the debt, if I was using the $ 2,000 that I was making to pay off that 150,000 in debt, I would wait till I’m like 65 years old
I will never pay that damn thing off. But I was making more money and I kept my expenses very low. So I was able to pay that off 5,000 here, 3,000 there, 10,000 there or even 15,000. And before you know it, I was debt-free. So that’s step number one focus on increasing your income, not lowering your debt.
Step Number 2: use good debt to invest in yourself. Now, remember this. Debt is nothing more than leverage. Even when I was $ 150,000 in debt. I was continuously investing in myself. I was investing in courses, and programs to upgrade my skills. You see, money earned is a byproduct of value creation. If you want to make more money, you need to deliver more value. In order to deliver more value to the marketplace. Guess what you have to do? You need to improve your skills. You see most people, they want more money. But they don’t want to work on their skills.
You see in life, you don’t get what you want, you get what you deserve. So my friends were telling me you are stupid. You’re already $ 150,000 in debt. Why are you still investing in these courses? Why are you buying all these programs? Are you crazy or stupid? You should save money. I was telling them. You know what I’m already $150K in debt. That $500 course that $1,000 seminar, that is not going to affect anything I’m $150K in debt. But if I could get one golden nugget, I can get an idea. I could learn a new skill-set through those programs, there’s a chance that my life could change for the better. And that’s exactly what I did You see. You don’t have a debt problem. You have a skill problem. You work on your skills, so you can make more money. Then your debt problem is gone.
Step Number 3: I want you to list every single debt that you have. And you may be thinking. No, I don’t want to think about it. No, I want you to list every single debt that you have. Maybe you have a credit card debt of $5,000. Or maybe you have a student loan of $10,000. Or you have another car payment. You know a car loan, that is $ 8,000. And then you have another small little credit card here and there, that’s $ 1,000. Okay, I want you to be very specific. I don’t even want you to use round numbers. I want you to get absolutely clear crystal clear: It’s $ 5,236.52. It is $ 10,826. I want you to be very, very clear because when it’s a round number in your head, what happens? Is it always feels bigger and more overwhelming? All right And clarity is power. Vagueness is a weakness. You don’t want to have a vague answer. You don’t want to have a vague problem. You want to be very clear exactly how much you owe and you list all of them.
And I bet you you can comment below once you do this. It might actually not be as bad as you think. Now you can see okay. This is what I have to deal with. This is what I have to tackle. Let’s do it one at a time. Now, what I’m going to teach you step number three. It goes against every single damn financial expert. What they’re out there? What they’re telling you. Well, because most of them are broke too. Let’s face it. They don’t have money, they have a lot of debt themselves. What I’m going to teach you work. Here’s what I want you to do. I want you to think about all the debt that you have right now.
Let’s say this particular one: it has an interest rate of 20 %. And this small credit card, whatever it is has a 12 % interest rate, Every single, damn expert. They will tell you here’s what you want to do. You want to pay off the debt that has the highest interest rate right. That is costing you the most amount of money. Oh, let’s do that. It might sound logical right. It sounds yeah. That’s a logical answer. Here’s the problem! Human beings. We are not logical, we’re emotional beings. So, instead of paying off the one that has the highest interest rate, here’s what I recommend. What I would do is I would pay off this one first. Here’s why I want you to pay off the debt that has the highest, the biggest psychological payoff for you. You know the one I’m talking about. That’s been lingering, maybe it’s money you owe to your family and friends that they have been kept bugging you again and again and again,
And you felt so guilty and so bad. That is you pay that one debt off that makes you will feel so good, you will feel so alive. Pay off that first, even though the interest rate may be lower. It doesn’t make logical sense. Forget logic: That’s what I did when I paid off that first little bit of debt. Suddenly what happens is? Oh, I felt I could do this. I could actually start to cross these off one at a time. And small success leads to bigger success.
And then I pay off this one and then the next one. But until you pay one-off this feels so overwhelming. And guess what then you’re paralyzed and you never take any action. I don’t want that to happen to you. So step number three, pay off the debt that has the biggest psychological payoff for you personally. Do that first. If you want to get out of your debt even faster, and you want to develop that high-income skill that I was talking about and if you’re serious, I want you to click on the link somewhere on this page, it could be below it could be somewhere. Here,
And join me for a special two hour: training where I’m gonna teach you how to make $ 5,000 a month, $10,000 a month or even $15,000 a month without prospecting, without cold calling and without doing anything online. So go ahead and click the link there and I’ll see you in class.