Category: Debt

I wrote a previous blog on money management where I shared some tips on how to identify where you are wasting money and then gave my own personal formula (via an downloadable excel spreadsheet found here) the gauge all of your spending. If you are coming from that blog, then you are in the right place. If you are just looking at this blog for the first time, it may be prudent to go back and check out the previous one I wrote or at least download the excel spreadsheet because you will need it for the next step.

Step 2 – Formulating a simple budget that you will actually follow.

It was told to me early on in life by a very wealthy mentor of mine who I respect dearly that if I couldn’t manage $1, then I couldn’t manage $1 Million dollars. This is so true, I meet people all the time who’s personal finances are garbage even when they are making great money in their career.

It all comes down to money management and budgeting. Again, this is another common thread among all wealthy people I have ever met; they all have a budget based on a formula that uses money as a tool never spending it emotionally. Here is what to do.

Take that excel spreadsheet you just downloaded. (or get it here)

The idea here is very simple. Manage any and all money that you get. EVERY SINGLE CENT! If you know what your monthly income is, it becomes very easy to budget, if you are like me and get paid in lump sums sporadically then disciplining yourself to a system like this is crucial!

Ok so here is how it works: For every dollar I take in, it gets split up and put in to different bank accounts. Each bank account represents a different aspect that I am saving for. In my case I have 8 Bank accounts. I explain what I use them for and the benefits.

  1. Wells Fargo Checking / Savings account – This account is used for daily spending, and paying bills. Think of it as your most active account, all money is deposited here before it goes to other accounts.

For daily spending and bill payment, I like Wells Fargo. The important thing to remember here is to bank with a bank that is convenient to for you with lots of locations and low fees across the board. As of right now, I pay NO FEES with Wells. I think B of A is the worst, and Chase Bank is in the middle when it comes to big banks.

  1. Discover Bank # 1 – Taxes (This is where I said aside money for taxes every year)
  2. Discover Bank # 2 – Emergency Fund account (Save for a rainy day)
  3. Discover Bank # 3 – Long Term Savings (Use for large purchases like a house or car etc.)

I use Discover bank because they give you the highest rate of return for a savings account. 0.95% to be exact and…

  • No minimum deposits
  • No Account Fees
  • Open as many accounts as you want
  1. Capital One 360 # 1 – Annual Expenses account (Money set aside for annual expenses like car insurance, property tax etc.)
  2. Capital One 360 # 2 – Vacation Fund (Saved money for Vacations)

I use Capital One 360 because they pay a pretty good rate of return on money in savings and my account doubles over as my top pick for a travel debit card that has

  • No minimum deposits
  • No Account Fees
  • Open as many accounts as you want
  • NO foreign transaction fees
  • No ATM banking fees.

(If you are interested in opening up a Capital1 360 Account and want $20 for free just for doing so, click this link.)

  1. Wealthfront Account – Managed Portfolio Long term investing account

(Click here to learn about wealth front and why I recommend them. Clicking this link will get your first$15,000 managed for FREE!!)

  1. FXCM Account – This is my active foreign currency trading account as I trade currencies daily. If your are interested in learning how to trade I wrote a blog about it here,  otherwise, dedicate the 5% I am setting aside in this account to some other find or investment.

Now take some time to look it over the excel spreadsheet. If you need to open a couple accounts, don’t worry, this can literally be accomplished in an hour, follow the links above to use my recommendations, or feel free to open up accounts where your want to.

Keep in mind that I am a 1099 independent contractor that means I pay my own income taxes each year. If you are a W-2 employee, then you can zero out the taxes line because your taxes are collected before you get paid. Personally I set aside 18%-20% a year for myself, you may pay less or more depending on how much you make and what your tax liabilities look like.

  • Enter all of your monthly and annual expenses. (You will see some numbers starting to populate)
  • Replace my bank accounts with your banks and match them closely as possible, meaning if you have a normal B of A or Chase Checking and savings account, that should be your main account at the top. If you have an E*TRADE, Schwab or IRA, replace my Wealthfront account with yours etc.
  • If there are some areas where you will need to set up new bank account, leave them blank for now
  • Now enter in your monthly income at the top in the yellow (total monthly Colum)
  • By now you should see some of the boxes populating. I will explain what’s happening here

The Breakdown.

Ok by now you probably have a good idea of what I am driving at here, but I will explain anyway. This formula is partitioning all of your income into different savings columns to give you a well rounded and financially savvy money management system.

The breakdown as seen in my excel sheet looks like this.

  • I earn $100
  • $20 (20%) is saved for taxes and taken right off the top (Skip step if you are a W-2 employee)
  • Now I have $80 Left
  • $40 (50%) Goes to my living expenses, i.e. rent, mortgage, car payment, food, gas etc.
  • $10 (10%) – To the emergency fund, after all shit happens.
  • $10 (10%) – Long-term savings fund. This could be for a future large purchase like a car or house down payment.
  • $8 (8%) – Annual Expenses Account – Like car registration or medical/life insurance. Things that get paid once per year
  • $7 (7%) – Vacation Fund – To broke to take a vacation, do this for a year, and I promise you that you will have enough to take a vacay!
  • $10 (10%) – Long-term investment account – YOU NEVER TOUCH THIS MONEY! This is for your retirement. You may be thinking I’m way to young to start saving for retirement, but the difference between starting this habit at 20 years old compared to 30 years old will mean a difference of hundreds, yes I said hundreds of thousands by the time your retire. So don’t fuck around with this one, set the 10% aside and forget about it.
  • $5 (5%) – For me it goes to an active trading account that I personally trade. If you have no desire to learn how to actively trade, you can simply put this money towards some other kind of investment short term to medium term, but this money is not for bullshit, it’s money set aside for short-Medium term investments with a bigger return on the short side.

Conclusion

This whole idea was adopted after first reading the age old book The Richest Man in Babylon. When done correctly you will learn to pay yourself first and then save and invest the rest of it leaving a little hear and there for having a good quality of life.

My parents generation saved about 20%-30% of there income on average. My generation saves a measly 5%-10% and knowing that we are going to need a least a cool million to retire on (4 times as much as my parents will need) we need to get on this today. There is literally no time to waste.

Again, if you are in debt, or not making a lot of money, apply this formula anyway. Rework the numbers to make them fit your situation. If you are in some serious debt, check out my blog on &^%&^%&*^%&* if you are just not making that much or spend money stupidly, then I challenge you to try this for 90 days. If after 90 days you don’t feel like you have a better handle on your finances and that you are heading in the right direction, comment here and I will jump out of an airplane to promote what ever you want me to.

Money is a tool. It is only emotional when you don’t have enough of it. It controls you, or you control it, simple as that.

****And as a bonus, if you are still not convinced, Acorns is a nifty little app that allows you to invest pocket change from rounded up expenditure in to the market as a long term investment. Follow this link to check it out and get $5 for opening an account.

Did you mis part 1 of this blog? Read it here!

 

I have written many blogs on personal finance, today I am going to speak specifically about investing, but not investing from the standpoint of a 40-something somewhat wealthy person with savings in the bank, a house and a stable career he or she has been in for over a decade.

This blog is aimed towards Millennials. If you a person age 18 to 34 then listen close because applying the small techniques that I am going to share in this blog could mean the difference between your financial success and failure later on in life.

Before I get in to the Nitti gritty of this, I want you to know that if you feel like you are broke at the end of each month, living paycheck to paycheck or simply just not making enough to meet your monthly nut and save a little bit at the end of each month then this blog is for you.

You could also be one of the thousands of recently graduated college students on the job hunt drowning in school loan debt wondering how you are ever going to get ahead.

Or, maybe you are doing ok financially and you are just looking for more ways to become savvier with your money.

Whatever category you fit in, what I am about to share is going to help you tremendously! Enough said, lets jump in to it.

Step 1 Gauging where you are.

I have never met a wealthy person who did not know where they were at financially. People who have built real wealth have some type of formula they use to save, invest, pay taxes and to live. This has been one constant that I have experienced with every wealthy person I have met that didn’t inherit the money or get lucky.

What you need to do is figure out where all your money is going. I think you would be surprised to find out that you probably waste about $20 a day on bullshit. What I mean is you may have a daily Starbucks Frappuccino habit, or maybe you never cook at home and eat out 3 times a day. What ever it is everyone has their vices and they are costing you greatly.

So, first thing is first, write down all of your expenses. Everything. From monthly fixed expenses like Rent, mortgage payments, car payments utilities etc. right down to your varying miscellaneous expenses. This will allow you to see where all of your money is going.

Remember we cannot fix a problem until we can recognize there is one, and this is going to help you gauge where you are at financially.

In part 2, I am going to share with you the simplest budget you have ever seen that anyone can follow even if you think you are to broke to save. In fact, I am going to share with you my own personal excel document that you can use to do this exercise.

 

It is not everyday that you really get to feel all of your hard work pay off. When I started currency trading 3 years ago, it was hard. There was a learning curve, and at times it seemed daunting and elusive to actually be successful at trading.

I really believe that when attempting anything new, there is going to be a period of time where you just suck at it. When you are a person who really likes to win, it can be difficult to attempt new things. The trick is that you simply need to accept the fact that you are a rookie, a noob, a kook or whatever and that you are not going to be killing it one month out of the gate.

Trading currencies has been a game changer for me. Coming from the sales and marketing world, investing in general seemed to be for brainiac types who were really good at numbers. I knew that I could always make money in a situation where there was something to sell, but could i have the same success as an investor, or as a FOREX Trader?

When I first found the Forex market I was vacationing in Bali Indonesia on a surf trip. On a day where there wasn’t any surf to be had, I started looking for ways to make money from a laptop…. (Watch the video, it will explain the rest so I can get on with my story)

Once I found the market and made my first couple hundred dollars before the sun came up one random morning, I was hooked! Unfortunately I never took in to consideration that in order to win at trading, you are going to take losses, and I was a guy who didn’t like to lose. I proceeded down a losing spiral of lost profits and nearly decimated my entire trading account in less then a months time.

I took a break from trading and was feeling pretty beat up by the market. Losing can really screw with you when catch a bad streak like I did. I was not prepared for the emotional turmoil that ensued. Unlike anything I had attempted before, currency trading required me do adopt a high level of emotional intelligence in order to be successful at it. So I got back up, dusted myself off, and got back to it.

I went back to  the school where I had originally learned how to trade. I went through the course again with no expectations and a new willingness to learn. 

The curriculum didn’t change, my perspective did. This time around, I was a lot more humble. After all I got my ass kicked. After putting in 6 months of hard work in, I starting to see some positive results in the form of substantial equity growth in my account. I was ready to take the show on the road, and see if I could really do this from anywhere in the world.

I headed down to Nicaragua with my girlfriend with 3 goals in mind:

  • Propose to my girlfriend
  • Surf some big waves
  • Pay for the whole trip currency trading from my laptop

I scored big time. The surf was macking, and I was pretty sure my girlfriend was going to say yes to marrying me. I was just waiting for the right moment to propose. I started doing my pre-sessions & technical analysis on the market looking for some trades one morning, and then just like that, a couple trade set ups presented themselves and I pulled the trigger!

— I was sitting in a youth hostel using their shotty wifi and hoping to God that the internet did not go out before I closed my trades. With in 15 minutes of trading I managed to pull 7 scalped trades netting me $1,272.96 after commissions. —

I closed my laptop, ordered an iced coffee and just sat for 10 minutes staring at the ocean and feeling like I had just pulled off a huge victory! I soaked it up, I proved 15 minutes of tradingthat not only could I trade, but I could do it from a shitty hostel with bad wifi in Central America. Later that evening, I asked my girlfriend to marry me and she said yes.

So I got 2 out of 3 of my goals done. Even though $1,300 was not enough to cover the entire trip, I felt like $1,300 for 15 minutes of my time was well worth taking the rest of the trip for myself and to celebrate my new engagement. Besides, the surf was macking remember!

The moral of the story is that If you put your mind to something and stick with it, you can do it. The path to success is not linear, but it follows a trend!

If you want to know more about how you can become a currency trader and make profits in the market from a lap top anywhere in the world click the logo below and find out more about the FX365 Institute!

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Time vs Money vs Quality

2014 has been tumultuous year for a lot of people including myself. There are so many problems in the world here and abroad that it can be hard to simply focus on the task(s) at hand. It is easy to get caught up in unproductive actions when you have idle time and no new prospects on the horizon. Low productivity and a lack of results can become a habit-forming sickness if you let it.

After life throws a couple proverbial kicks in the balls or as I like to say “shit sandwiches”  at you, it can kill your confidence. In fact, you may have long streak of bad luck, or a shitty set of circumstances that has led you to the point of disparity. These “tests” are simply life experience that will allow you to build character, and although I would never wish bad things upon my fellow-man, shit happens and that’s life, so you are going to have to deal with it whether you like it or not.

So what to you do? 

There are many ways to deal with shitty life circumstances, but really when you get right down two it, most people’s lives boil down to either of these scenarios:

 1) Not enough money, too much time.

2) To much time, not enough money.

In my 30 years here on planet earth, I have seen and experienced a lot of people, places and things. Very little actually shocks or surprises me these days and that’s a good thing because I am not looking to be shocked or surprised. Instead, these days I’m looking for security, successful relationships and a long and vibrant life. When I have wound up in one or more of these scenarios over the years I would spin out really quick.

The best years I had making money were the years my personal relationships suffered the most, mainly because work came before everything else, and if there was work to be done, you weren’t important. This is no way to live unless you want to be a fat, bald, divorced rich guy who dates 22-year-olds in his late 40’s.

My worst years financially were the years that I grew the most as a human being. I found compassion and empathy for people who struggle that I never understood until I went through it. I made my best friends in life during those hard time and I believe it is due to the fact that when you have no material things to offer someone, then all you have to give is your friendship, loyalty and honor . To me those ideals are so much more important than money when it comes to who I associate with, and more importantly who I trust. It took me losing almost everything at 23 years old to realize it.

Finding the balance is always the hardest thing to do. I am a strict believer that those with the ability to reason (Homo Sapiens) have the hardest time living in a natural state. I’ll give you an example why:

Birds migrate to move from areas of low or decreasing resources to areas of high or increasing resources. The two primary resources being sought are food and nesting locations. If one of the birds had the ability to reason, he would negotiate renting a warm barn in the winter and find a way to store enough supplies to last him and his family the winter saving him and his family the burdensome task of flying several thousands of miles twice a year. The Birds brain does not allow for reasoning of this kind, in fact the bird couldn’t really even explain why it migrates, it just knows, as if nature set it up that way. If birds simply stopped migrating they would surely die by way of extreme weather and shortage of food.

You see, the ability to reason is a gift and a curse. If used properly and efficiently, a human can go on to live an extraordinary life but unfortunately this is not the case for most of us, and if you don’t believe me, take a stroll down your Facebook news feed and bask in sea of useless time wasting shit that gets posted on a daily basis. I know this because I have found myself getting sucked in to some stupid video and then next thing I know I lost an hour of my day looking at clip after clip of useless things that do not benefit my life in one way shape or form.

If the world was in perfect balance, there would no wars, no poor people, no suffering. On the flip side of that, If there were perfect balance you would not be allotted the opportunity to choose what type of life you want to live. In a basic sense, human nature as we know it is constant tug-o-war between what we really are, who we think we are, and what we want to become. Personally I find the most serenity in being comfortable and grateful for who I am now, and what I have now while always striving to better myself, and my situation. You can’t change the past, and you cannot tell the future so hope for the best but always plan for a worst case scenario situation. 

The truth is that any person possess the ability to spend their time being and doing productive things in life regardless of any one or multiple situations. You do not need to be rich to be happy, you need to understand what kind of life you want and then live it, that’s the key. 

So if you are currently in a situation like I wrote about above, I have put together a little matrix that may help you understand how to find balance and make some sense out of what I am trying to convey. 

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As you can see from my highly complex academic chart, if you work too much and spend a lot of time doing shit you don’t like doing, then you are going to be unhappy. If you strive for a good to great  balance between work and play, then you are going to be a much happier person. The perfect balance does not exist, so stop being a perfectionist and strive for something obtainable. Come on, it’s not f%*&^& rocket science!

Tips and Tricks

Here is what you can do when you have To much money and not enough time.

  1. INVEST and SAVE. How do you think the top 2% did it. The easiest way to make money and spend less time working is by making your money work for you, so when it’s rolling in, get it while you can, but then invest and save it for the times in life when there is little or no money coming in.
  2. Plan time for loved ones even when it’s going to cost you! Don’t make the mistake of sacrificing opportunities to build memories with friends and family chasing the dollar. My mentor Mike W. told me on his death-bed “Steve, I’m not dying in this bed thinking of all the missed opportunities in life where I could have made more money, instead I’m lying here in utter gratitude that my life allowed me the opportunity to spend a lot of time with the ones I loved and my livelihood allowed for us to have enough money to be happy.” I’ve never heard it better put than that.
  3. Try to Automate the system, meaning same or more income, less of you needing to be at your “job”. Read the “4 Hour Work Week” by Timothy Ferris, it will lay some insight in how to go about this.
  4. Continue to look for opportunities that will allow you to get more of your time back with the same or more amount of income, trust me, it’s very possible!

 

Now, lets talk about what to do when you are in the opposite side of the situation: To much time, not enough money.

  1. Survival Mode, this means that because of the lack of income, you cannot be stupid with money. You need to make it last but do it so but keeping the quality of your life intact as much as possible.
  • Use this as an opportunity to work on yourself, your mind, your body and spirit. Go to the GYM, go do some Yoga, go SURFING, don’t waste the time playing video games or staring at Facebook for 6 hours a day. If you have some time, go use it to your advantage, and go do some of the things that your job never allowed you to do!
  • Look for work, and don’t be prideful. If it got bad enough for me, I would go dig ditches, get unemployment, and what ever I needed to sustain the quality of life that I have even if it meant doing work that I feel is below me or take government subsidies until I’m back up on my feet.
  • DO NOT GO IN TO DEBT! Never ever ever ever ever put things on credit or take out loans with out a solid plan of getting out of that debt. If you have to live on credit to sustain your lifestyle, than you are living beyond your means and you need to cut the fat, don’t be prideful, you can buy that new car next year when you get that job and can pay cash.
  • Don’t get depressed. It’s not the end of the world, opportunities find their way to people who are looking for them. Even a broken clock is right twice a day, and I am sure that you are not a broken clock, so don’t let the bad times get you down, just embrace them, accept it and move on diligently.

Enjoy the rest of the Week.

Happy Thursday, The weekend is almost here!!!!!!!!!!!!!

 

(You are reading part 2, to see part one, click here.)

Turning 30 isn’t going to be all that bad. I’m not dreading it, I am embracing it. There are so many great people who had success after 30.

The Entertainment Industry. 

Sylvester StalloneThe Oprah Winfrey show didn’t debut until she was 32. Sylvester Stallone didn’t make Rocky until he was 30, and was in a porno to make ends meet while shopping the script around. Dick Van Dyke and Gene Hackman didn’t get their first major roles until their mid-thirties. More recently,  The entertainment industry recognized Jon Hamm, J.K. Rowling and  Tina Fay’s talent all after they hit 30. Vincent Van Gogh had his first art exhibition at 32.

Business.

Suze Orman started out as a waitress and held that job until age 30. And she didn’t publish her first financial book until age who_kroc_image44. Nowadays, she’s sittin’ pretty as one of the most-trusted voices in the world of personal finance. If Ray Kroc had quit pushing the ideas of serving a billion Big Macs world-wide, McDonalds wouldn’t exist. If he quit trying before the age of 52, he never would have created one of America’s best-known restaurant empires. He kept at, working day in and day out at his restaurant until he died. While Dave Ramsey thought he’d figured things out in his 20s with his $4 million real estate portfolio, he lost it all by the time he hit 30. A few years later, he found his passion in financial counseling, and today his books and radio show have millions of dedicated fans.

When it comes right down to it, Age really is just a number. I believe I am going to live to 100 anyway so who cares, Im 20 years from my half way point with so much life to live. I get sad when I come across people who have thrown in towel because they feel like they missed their window or something in their 20’s. It’s so far from the truth.

Sure, if I could go back, I would have made some different goals knowing what I know now. Who wouldn’t? Making a million dollars seemed really cool at 22 but I never understood or realized all of the liability and responsibility that comes with that. I would write that goal much differently now, something like “make enough money so I don’t ever have to be in debt or depend on anyone to support myself having enough left over to help friends, family, and people in need when possible.” Despite all of my shortcomings, or what I should or shouldn’t have done, the goal now is to create enough abundance to be happy and get my time back.

Regardless of what you have or haven’t accomplished, it’s not over. The journey truly is just beginning. I would take years of experience over raw talent and crazy ambition most of the time these days. I sacrificed a lot of relationships in my 20’s chasing a dollar and losing sight many times about what was really important. The last 3 years of my life have been the most gratifying years so far and they are nowhere near what I set out to do 10 years ago. In fact, if you told me 10 years earlier where I would be now, I would have gotten upset, and depressed because the only way that I measured success was by the size of my bank account, and if what ever life you told me I would have had didn’t involve me being filthy rich, I would have gone a different direction.

So what now. Where do we go from here. 

Well I know what I am going to do. They’re wont be all that much of a change for me. I am well on my way to doing some incredible things in my life. I have great business opportunities that I have started in the last year. The first one being my tech start-up (Roommatefax.com) and the second has been learning to trade the FOREX market.  As far as hobbies go, I have always maintained a work-hard-play hard mentality, So I picked up skydiving 2 years ago as well as training MMA (Krav Maga). I am in the best shape that I have ever been in my life. I don’t smoke, I don’t drink, I eat healthy and I exercise regularly.

After living a little here on earth for a little while, I have come to understand some things about life. Most of which I recently published in my latest 9781935723486_p0_v1_s260x420book The Young Entrepreneurs Guide To Life. I just want to live my life to the fullest. I want to experience and see as much as this world has to offer while I am alive and kicking. I will never stop seeking. To me, business is just another adventure. I have had jobs here and there but they were always stepping-stones to get me to a place where I would take my life back, live it how I wanted too. As an entrepreneur, I get bored and need to switch projects it seems about every 2 years. This is very bad for job security, but great if you love starting new things.

Money comes and goes. I have learned that it is a tool, that’s all, it’s only emotional if you don’t have enough of it. If getting it ruins your relationships, you’re doing it wrong. I’m looking forward to enjoying what I have now. The potential of marriage, kids one day soon. Seeing places in the world I have never been too and accomplishing things to better myself physically, spiritually, and in business. These are all things that I am looking forward too.

So all in all, turning 30 is going to be great. I have done a lot of big things in my 20’s. I failed in some areas, and absolutely dominated in others, these days I just want to enjoy the journey, and go for happy instead of being right or “winning.” Remember that the only thing to dread or fear comes from your own inability to accept the reality of your situation good or bad, and then doing something to better it or make it worse.

Go lose 10 lbs if it will make you feel better. Take a trip to South East Asia if you have never been. Buy a nice car if you have never had one before, but just be real about it. Honor those who love and support you. Remember where you came from and all the shit you have been through to get to where you are. Don’t lose perspective, gain it, be a wolf, go hard, and most importantly follow your heart. Fuck what society says or thinks you should do some random age, I’m trying to live more and more like a kid the older I get. I will never conform, and no matter how up and down the roller coaster of life takes me. I choose to have fun and a good attitude about everything as much as possible regardless of what type of shit gets flung at me. Maybe you should too! Stop worrying and start living.

So if you’re approaching 30, and you have some anxiety, don’t worry, there is plenty of life to live and I hope I have alleviated some of the worry and concern with this post!

Now let’s go celebrate!! Happy 30 everyone.

-Steve

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Being in debt sucks, you should get out of it. America is HIGH on credit cards, loans and just living way beyond our means in general.  It’s got to stop because it’s simply a vicious cycle of madness, and will only end if you make the personal choice to do it in your own life.

“When you get in debt you become a slave.” -Andrew Jackson

It has been a long time coming for writing a blog on this topic. I write a lot about life-style and ways to accumulate wealth, but there is another side to the wealth coin and that side is DEBT. We all know what it is because at one time or another we have all been in it. For most people I meet, being in debt is a part of everyday American life that 99% of Americans live in day in day out. The other 1% owns all the wealth, and we can’t get to where they are because they are the ones lending the money 🙂 Imagine if we lived in a world where you couldn’t get a credit card or a loan. Think of how different the world would be, how much stress would be lifted off of you or your loved ones. What if you woke up tomorrow and you were magically at $0. How would that change your life? Here in America, we start getting credit card offers weeks before we turn 18 years old, with banks enticing you with instant gratification telling you to buy now and worry later. Sadly it has become a way of life here in the U.S. and I believe it will ultimately lead to our downfall. The powers that be do an incredible job keeping us in a constant state of denial, and for good reason too, because it’s hard to sell you on the idea of being ok with getting in to debt if they actually told you what you were really getting yourself in to.

Let me throw a couple of stats at you real quick on the US debt situation, then we will get in to your shit! * As of April 1, 2014, the official debt of the United States government is $17.6 trillion ($17,578,141,920,036).cols_ventura-39636 This amounts to:

  • $143,543 for every household in the U.S.
  •  103% of the U.S. gross domestic product.
  • 559% of annual federal revenues.
  • $55,372 for every person living in the U.S. (not including Americans Individual’s personal debt which is indicated below.)

U.S. household consumer debt profile:

  • Average credit card debt: $15,191
  • Average mortgage debt: $154,365
  • Average student loan debt: $33,607

James Quin from financialscense.com  writes: “The average hard-working, taxpaying American has been enslaved in debt of such proportions that they will never be able pay it off. Your share of the $17.6 trillion National Debt is now $55,372, and growing by $4,500 per year. Your share of the future unfunded liabilities, created by the people you elected, is approximately $350,000. This crushing burden is in addition to the $13.8 trillion of mortgage, credit card, student loan, and auto loan debt Americans have accumulated in the last three decades of delusion. Forty percent of all credit card users do not pay-off their credit card every month and carry an average balance of $16,000 at an average interest rate of 15%. Good to see the Wall Street banks passing along some of their 0% borrowing windfall to their “customers”. ” So what does this all mean? Well it’s simple, as a country we’re F*&%ed. As an individual, you may have a chance for redemption if you choose to take the hard road and opt out of the vicious cycle, but it won’t be easy. In this blog, I am going to share with you some of the key ideological changes I underwent as well as the actions that I took to get my debt managed, and eventually paid the f%^& off. If you do exactly what I tell you to do in this blog, you will be well on your way to getting out of debt for GOOD! I will explain how to cut your interest rates in 1/2 if not more. Here are the steps.

stop-bleeding-save-your-own-life1. Stop the bleeding – Ok, if you are serious about doing this, it’s time to make some hard decisions. I don’t mean like you need to tighten your belt a bit and cut back a little, I’ll equate this to a obesely overweight person that needs their stomach stapled, and triple by-pass heart surgery to stay alive. This means fire sale time. You go through your house and collect everything of any value that you don’t use. My indicator is: unless it’s a seasonal item like a snowboard, if it hasn’t been used for 6 months, sell it, thrown it out or give it to goodwill for a tax credit. Anything you own two of needs to be reduced to only one, after all, why do you need 2 anyway? This includes big ticket items like cars, motorcycles etc.  Next you need to look through your bank statement and find any subscriptions or monthly reoccurring charges that you don’t use on a regular basis. For example, expensive gym memberships, magazine subscriptions etc. Be vigilant, we are talking about things you don’t absolutely need, if you need your gym membership, I”l tell you how to save on that later on, but for now, just follow the directions. If your a person like my mom who needs to hold on to everything, than you need a close friend to help you through the process like a drug addict needs a sponsor to keep them in check, you can’t be trusted.

reality-check2. Reality Check – Time to get out of denial and face the truth. Gather all the statements of debts you have. College loans, car loans, credit cards, mortgages etc. Then start an excel spreadsheet to lay it all out. I’ve included the one I used that gave me a clear picture of what I owed and the percentage rates I was paying. (StevenEwolf.com Debt Worksheet). Once we have it all laid out on paper we have “THE NUMBER” meaning the price you will have to pay for freedom. For me that number was $160,000 in 2010, and I got it under control without a bankruptcy or credit help bullshit company. It can be done, if I can do it, you can too.

3.Budget time – Here is where you sit down with your loved one, or by yourself if your single and simply find out how much you are making imgres and how much you are spending. To get an idea of this, I strongly suggest you use a budget program like Mint.com. I used mint.com and still use today to mange my income, expenses and investments, it does all that for you in one simple program by collecting all your financial data and putting it in one easy place for you to see and manage. It will give you a snap shop of your current cash vs. debt as well as up to date information about every asset and liability you have. It will also allow you to create a budget based on your income so you can track and see exactly how much you are spending and what you are spending it (or wasting it) on. This can only be done once you figure out what your income is. If you are like me, and never had a constant pay check, this will give you data collected over a period of time to help you balance out your income as you receive it. 

Piggy-Bank-e13684380021284. Savings Strategy – What is savings you ask, well that’s money that you don’t spend, something that is not a familiar practice to my generation. Here is what it needs to look like, I’ll give you an example for an income of $5,000 per month. (I adopted this practice from the book The Richest Man in Babylon & Secrets of the Millionaire Mind  and customized it to fit my needs to get out of debt and build wealth)

*****Note, a tax savings account is necessary if you are a 1099 guy like me, if not don’t worry about, the government steals it from you already every pay period at your W-2 job. So for the sake of this example Red will indicate W-2 Person, and Green will indicate 1099 person.

:::EXAMPLE:::

Total Income $5,000

-20% ($1000) in to separate bank account specifically set aside for taxes.  Capital1 – 360 gives you free Savings and Checking account with no  Capital-One-360-Checking-Special-Offer minimums or ATM fees, that pays you a .75% yearly APR yield (5 times national average). If you follow this link to the right and you will get a $50 referral credit just for signing up through my link! (You see, pays to read my blog!) So do it NOW!

50% of whats left after taxes ($2,000) ($2500) Goes in to you spending budget. This is to be used to pay the mortgage/rent, gas utilities, car payment, food etc.

20% Goes in to savings. ($800) ($1,000) // This is money that you will invest in to something later, but don’t worry about that just yet because you don’t have any money yet, so just save it and if you are in serious debt, all of this money will go to pay off debt starting with high interest credit cards and loans 🙂

10% Goes in to the “emergency/big ticket item fund” ($400) ($500) // This is money for a new car or a trip, something you may want but don’t necessarily need so if shit hits the fan you can use the cash to get you out of a pickle, but the hawaii trip is not gonna happen this year as a result of it. 

10% Goes in to the “Play” fund ($400) ($500) // This is your money to blow on what ever you want. 

10% Goes in to the “Charity/Education Fund” ($400) ($500)

budget-clip-art(3)4. Budget Review – By following the example above you easily get a hold on your own personal spending, not lets cut some more monthly costs. Time to sit down, look at everything you decided to keep: memberships, subscriptions etc. If they don’t fit in to your budget, you need to cut back even more. It is however worth calling all of the entities and seeing if you can reduce the membership costs. I called my gym, they cut my membership rate in half, then I called some magazine I subscribed to, they gave me a year free, then the cable company, then my cell phone provider and so on. By the time I was done calling every single entity that I had a subscription with, I managed to hang on to one or two things I would have had to get rid of by just calling them and asking for a discount. Once you have accomplished getting this all together and knowing that you are at least not going negative every month, we can go to the next step.

credit-card5. The Credit Card Shuffle – Ok let do some plastic surgery. First pull out that debt sheet that you have downloaded from above. Remember the one where you wrote down the total amounts you owe. Ok, now pull out all of your credit cards and start calling each one, here is what you need to find out, and do this exactly like I tell you to here!

1. Call the CC company and find out what you actual rate is on the card.

2. If you have balanced transferred money or have a promotional rate of some kind, find out the rate and when the promotional rate ends and then indicate it on the sheet just like the example I have set out.

3. Ask the customer service agent if they can lower your rate. If they say no, ask them if they can waive this months interest charges as a courtesy. Most companies will do this at least once per year.

4. Ask them if they have any promotions on Balance transfers, don’t do it yet just find out if they do. (It’s usually 0% for 6-12 months or 4.99% for 18 months. They will charge you between 2%-5% to move the money)

5. Repeat this step until you have called every single one of your credit cards and recorded the information on the sheet provided. Now that you have an idea of how badly you are being raped by finance charges, we can start the shuffle. Looking at all of your existing credit left on cards, figure out if it would make sense to transfer balances to cards that have room. Take in to consideration that it will cost you money to move the money, so if the benefits of savings don’t outweigh the costs to move the money or you simply don’t have enough credit left, you will have to choose another option. The main idea is to try to get any credit card balance to 0% or as close to 0% as possible. Some of you may still have good credit if that’s the case, use the following method, if not, read on, there is options for you. If you can swing, pay your highest APR% cards off immediately, meaning any card that only a couple hundred bucks or something on it, just pay it and check that one-off the list.

If you have a good credit score or are a home owner:

1. Ask each CC company to raise your line of credit, explain that you need the credit for business travel.

2. Try to move all of the balances ton ONE card so it’s easily manageable and at the lowest rate. If you have to spread this out over 2 cards, do it, but make sure it makes sense.

3.  If you weren’t able to get the CC companies to extend you more credit, try to get a personal consolidation loan. I used one of their and it drastically helped me get out of debt faster. The best company with the lowest rates is Lending Club. Lending club will beat any other lending_club_logopersonal loan service or big bank on unsecured debt consolidation loans. If you do this, you can get a secured loan for 3 years that can be paid off early with no pre-payment penalty. Otherwise, try a HELOC on your home or a refinance to wrap the debt in the equity if you can do it.  If your debt is only a couple thousand it may be a good idea of doing a “used-car refinance loan” and wrapping some of the debt in to that if you have some equity in a vehicle.

If you have bad credit or have no home. 

1. See what you can do to move balances around to 0%. If the CC companies won’t extend you credit then try the personal loan from Lending Club like I mentioned above. They still have some great rates with people who have below Prime credit scores.

2. Get a copy of your credit report and find out exactly what you have going against you that is affecting your score.

3. If you can’t get more credit to move balances, and you can’t get a personal loan that makes sense it’s time to start playing dirty with your creditors. The following advice is the last option that you will before you have to start looking at bankruptcy as a viable option. (I will not be covering bankruptcy in this blog because if your situation is that bad, you need to get in touch with an attorney and discuss your options.) 

4. Credit card consolidation companies are bullshit. There is nothing that they can do for you that you cannot call your credit card company do yourself. They basically charge you money to “go to bat for you” but what they are really doing is serving as a middle man between you and the CC company and make a little money off of your hard ship. I’ll share my story explaining below at the end of the blog.

6. Sticking to the plan no matter what – The hardest thing that you will encounter when trying to follow these steps is the feeling that there is no end in sight. That you feel so far away from $0 that you want to give up or just say F%^&* it. Understand that it was that exact attitude and lack of discipline and knowledge that got you in to this situation to begin with. In fact, you have probably spent years getting your self in to this situation, so don’t think that this is going to get fixed over night.

What I am proposing here is a long-term and effective strategy to recognize and asses the problem, reconcile the damage done, and then install a system of ideological principles to live by. Taking all of the actions I have laid out here is a start but the ultimate idea here is that you change your mindset, and that you do it long-term because if you use what I gave you here to get out of debt just to do it all over again that we have failed. So, be brave, be sturdy, and most of all, find some gratitude and accomplishment in the fact that you are doing something about it. Just that is a huge step that you should be proud of.

Summary and a Personal Story.  

IMG_0156

Me in Bali living the life of my dreams. You can to!!!!

As I indicated before, this guide isn’t something I thought up last night, this knowledge comes from years of experience going through this myself. I have been through some very scary times, and if I could, I would love to help you avoid some of those pit falls in life. When the market turned in 2008 I went from owning a house, with a brand new BMW paid with cash to $160,000 in debt ducking creditors and conducting a fire sale with any assets I had left to try and cover the losses. I didn’t do it all correctly and I wish I had seen a blog like this one to help me out of that horrible situation. As my good friend Rob Guth says “ask me how I know?” I love the saying because it comes from experience, and it the experience of the good and bad that has allowed me to learn from my mistakes and come back from some dark times with hope and re-energized spirit to not only continue on when things go south, but to always have hope that tomorrow is a new chance an opportunity to turns things around if they not going well, or continue to rise if they are.

I hope that you take what I wrote here to heart because these nuggets of information have cost me years of my life and hundreds of thousands of dollars to obtain. Learn from it, apply it, and execute it in your own life and enjoy years of time and lots of money saved because you were wiser that I was to look. If this blog speaks to you, share it the information with your friends, family and people you care about. If you have questions, comments, concerns, feel free to post in the comments section or contact me via the contact page

I wish you the best of luck!

See you at the top.

Steve W.

Solutions Links as indicated above.

1. Debt Worksheet 

2. Capital 1 360 Free Savings and Checking account with no minimums or ATM fees. 

3. Mint.com

4. Lending Club

5. If you are looking where to go after this, check out my book that will begin to give some great insight on how to go in to business for yourself and build some wealth. 

So excited for the release of the 2nd Edition of the Young Entrepreneur’s Guide to life. Along with this new release, I am going to be working to bring new content weekly to my site. This content will be outlining my life, current goals, businesses etc. It will be my sounding board to the public to get feedback, and build synergy with new people. Have a great week!!!!!