What to do with DEBT?


Problem: Debt is taking all of my money.


Principle: Debt elimination creates wealth accumulation.

If you had no debt, what couldn’t you do? Close your eyes for a moment and imagine what life would be like if you had no debts. Really feel, sense and capture the feeling of being completely debt free. Where would you live? What business would you be in? How much more could you help your favorite non-profit organization? Where would your children attend school? Can you imagine?




You must see debt as an enemy. What has debt taken from you and makes it an enemy? What dreams has it dashed? How has it impacted your marriage or your relationship with your children? How has it influenced your children’s education? Only until you see debt as a hostile enemy will you mount an aggressive attack against it. You must understand debt always takes more than it gives.


Consider the reward that awaits you after eliminating your debt. When you no longer have bad debt present your cash flow increases which allows you to acquire assets. Debt is OVERLOOKED as a source of money by most people because they are afraid to look at their debt. Your debts can be turned into money by first eliminating them. You must recognize and see, every time you pay off or eliminate a debt, this creates new cash that you did not have to work for and it is tax free.


List all of your debts from smallest to largest. You must learn to face it before you can fix it. Many people believe, if they refrain from opening their mail or avoiding a creditor’s phone call, the debt will miraculously disappear. Your debts will not just fold in defeat because you refuse to face them. You must identify every debt you have, including obligations to individuals, and list them from smallest to largest. We recommend you attack the smallest debt with the greatest impact on cash flow. The smallest debt is easier to defeat and it possibly creates the most amount of cash flow. This gives you the motivation and momentum to attack other debts.

Develop a written plan to attack one debt at a time. When you begin your assault on debt, much of your cash flow needs to be concentrated on defeating one debt at a time. Below you will find how the plan will work.

  1. Pay the regular payment on time. By paying them on time, you avoid late fees and additional interest. This allows as much of the payment as possible to go toward eliminating the outstanding debt.
  2. Whenever you pay off a debt, take a specific percentage of that money and use it to attack the next debt.
  3. Additional sources of money that has been created should be used to further eliminate debt.
  4. If you have debts that are past due or have consistently been delinquent, you may be able to negotiate a payoff of these debts for as little as 40 cents on the dollar. Before calling the creditor, make sure you have clearly identified the sources of money for this negotiation.
  5. Negotiate a lower interest rate. Lowering your interest rate is important because the majority of your payment goes to interest, which has no bearing on your principal balance.

Before you can defeat debt you must learn to CONTROL spending. It is critical that you implement this section of spending into your life. Controlling spending becomes an added tool to mount an ATTACK against your current debt.