Each year, millions of Americans suffer from debt. Debt on their home, car, education, and practically anything else one can imagine. Many people try to get out of debt but are never able to accomplish this daunting task. Instead, their debts keep growing, and feelings of depression, frustration and hopelessness appear. The great news is there is an excellent way to pay off your debts and loans.
The following example illustrates how one can become debt free in three to seven years, no matter how much you owe. Let’s say, for example, you have the following minimum payments to make each month:
Car payments $500
Credit Card $200
Multiply the total monthly minimum payments ($1750) by 10%. Take the result ($175) and add it to the minimum payment that will be paid off first. In this case, add $175 to the furniture payment, which would make the monthly payment $225. Keep paying $225 on the furniture until it is paid off. Continue making the minimum payments on the other debts. The idea is to focus on putting more money on one debt rather than spreading payments on all debts.
After the furniture is paid off, look at the next debt that will be paid off first. Take the $225 dollars used to pay for the furniture and add it to the $200 dollar credit card payment, making it a monthly payment of $425 dollars. When the credit card is paid off, add the $425 dollars to the $500 dollar car payment, making it a monthly payment of $925 dollars. At this rate, it probably won’t take you very long to pay off the car. Once the car is paid off, take the $925 dollars and add it to the last debt, which makes a monthly mortgage payment of $1925 dollars. Make sure you specify to the lender that you want the extra $925 applied to the principle. Then watch your mortgage melt away!
Many people will take the money they used to pay off debt and spend it on other things. People don’t need the money because they have been getting along fine without it for so long. Anyone with the slightest amount of desire can truly become debt free and be on the way to financial freedom. Once you are financially free, you can begin the process of becoming rich. In our example, you would take the mortgage payment of $1925 and invest it in a low-fee index mutual fund (S&P 500) every month. Within another 10 to 15 years you will become a multimillionaire! This is not just a wish, or hope or a dream.
You really can become a millionaire! This strategy can work no matter how much debt you have. All it takes from you is the desire and commitment to do it.