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How To Get Out Of Debt!
By: Dr. Scott Brown, Ph.D.
Controlling your debt is the first step to preparing for investing in the stock
market. If your debt is high then your debt payments are high. This means that
you have very little to save and invest each month as compared to if you had
little or even no debt.
Here are two practical suggestions to get you out of debt. The first (1) is to
always pay more than the minimum payment on any debt you have. The second (2) is
to reduce the interest you are paying without lengthening the time that you have
to repay the debt (known as the maturity or amortization) if you can. Don’t ever
forget that when ever you have a lender reissue a loan at a lower interest rate
frequently you jump back the original length of the mortgage in months and
years. Don’t trust bankers because they are there to make a buck for their
company at your expense!
Let me give you an example. If you buy $1,100 of Christmas gifts and pay %18 on
your credit card balance after the one month grace period it will take you 12.5
years to pay it off if you make the minimum payment the credit card company
wants you to pay. If you just paid $10 extra you would pay it all of in just 6
years which is half of the time.
But what if you had a $5,000 balance? At the minimum payment it would take you
46 years to pay it off! You would end up paying $13,000 in interest. If you
reduce the interest rate to 9% you would pay it off in 20 years and save
$10,000. What ever you do make sure you pay it all off.
The same concept applies to your home mortgage. If you have a 30 year $100,000
mortgage at 7% the monthly payment would be. If you paid an extra $100 per month
toward the principal then you would pay it off 9 ˝ years earlier. You also end
up paying a LOT less interest over the life of the loan!
This is how you dig yourself out of debt. Just like filling in a hole you grab a
shovel. You make that first scoop. You start filling. Same goes for getting out
of debt just get started and in a few years you will be amazed where you will
get. This is how you start as a stock investor by digging yourself out of debt.
Once you have control over your debt the money that flows to you will not leak
out but will grow and keep just on growing!
About the Author:
Dr. Scott Brown, Ph.D. a.k.a. “The Wallet Doctor” holds a doctorate in finance
and can teach you how saving the daily price of a cup of coffee at Starbucks can
make you a millionaire in the stock market through long term stock investing.
Dr. Brown's website is: www.walletdoctor.com/ |
