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TableofContents

Contents

Preface ........................................................................................................................................................................................ 3

Where to start ............................................................................................................................................................................ 5

Part 1 .......................................................................................................................................................................................... 7

UnderstandingCredit......................................................................................................................................7

Part 2 ........................................................................................................................................................................................ 15

HowtoGetoutofDebt–TheStep-By-StepPlan.........................................................................................15

Part 3 ........................................................................................................................................................................................ 23

TheCreditCounselingandDebtSettlementoptions...................................................................................23

Part 4 ........................................................................................................................................................................................ 27

ThePsychologyofMoney–Changingyourmindset....................................................................................27

Part 5 ........................................................................................................................................................................................ 37

Resources......................................................................................................................................................37

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Preface

WorkingasaRealEstateAgentandLoanOfficerinSouthernCalifornia,Imetalotofpeoplewhowantedtobuyahouseorrefinancetheirhome.Unfortunately,manypeoplewereunabletoqualifyforaloantopurchasetheirownhomeduetotheircredit.

Lookingatmyclients’financialsituations,Irealizedthatmostpeoplelackedeventhemostessentialfinancialknowledge.ThingsthatIthoughtweresobasicandnecessarytoqualifyforagoodloan,likehavingagoodcreditscore,payingbillsontimeornotcarryingalotofcreditcarddebtrelativetoyourincometomostpeoplewererevelations.

Iwillneverforgetacouplethatcameintomyofficelookingtorefinancetheirhouse.

TomandMarianeededtolowertheirmortgagepayment.Althoughtheyhadtwojobseach,theyhadahardtimecomingupwiththemonthlypayment.Tomeventoldmethathewasconsideringlookingforathirdjobthathecoulddoforafewhoursaweekbuthecouldn’tfindonethatcouldfithisalreadytightschedule.Theyhad4kidsandatonofcreditcarddebt.

DuetotheirlowFICO(credit)scoreIcouldnotfindthemaprogramthatwouldfittheirfinancialsituation.Afterlookingattheirfinances,IknewIhadtohelpthemsomehow.Itbrokemyhearttoseethewaytheywereliving.Theydidn’tseetheirkidsmuch,relyingonrelativestotakecareofthemwhiletheywereworking,sometimesforover12hoursaday.Ifoundmyselfteachingthemhowtopayofftheirdebt.Ishowedthemwhichcreditcardstheyshouldbepayingofffirst,Iexplainedtothemwhatcompoundinterestisandhowitwasbeingusedagainstthem,andwrotedownadetaileddebtrepaymentplan.

Whentheyleftmyoffice,theywerehopefulandrelieved,sincenowtheyhadaplantogetoutoftheirfinancialchallenge.IdidnotcreatethisplanIteachtoday;Ilearnedit,mastereditandtaughtcountlesspeoplehowtoapplyitsuccessfullyinordertochangetheirfinancialsituation.

Anothercouplewantedtobuya$400,000house.Theyhadacombinedincomeof$56,000ayear.Theywerebothdrivingbrandnewcars,(theyhadpaid$60,000forthosecarsonlyafewmonthsearlier)andtheirmonthlycarpaymentswerejustunder$1200.Ontopofthat,theyalsohad$29,000increditcarddebt.Theirmortgagemonthlypaymentwouldhavebeen$3,450.Incredibly,theycouldn’tunderstandwhytheywerenotapprovedforaloan.

Aladywhocametomeforadviceadmittedthatthepreviousmonthshehadbeensoupsetwithherhusbandforbuyinghimselfanewtruckthatshewenttothedealershipandboughtherselfabrandnewcar.Nowtheyarehavingtroublepayingforbothcars.

Theseandmanysimilarsituationsmademerealizethatmostpeoplewerenottakingcreditseriously.Andthemainreasonwasthattheydidnotknowexactlyhowcreditworks.Butthat’sonlyonepartoftheequation.Theotherpartisthatweliveinsuchaconsumeristsocietythatnomatterwhatyoudoor

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whereyougo,youareconstantlyexposedtoadvertisements.WhetheryouarewatchingTV,browsingtheweb,readingthepaperorjustdrivingaroundtown,youarebeingbombardedwithads.Andmostimportantly,manyofthoseadsaretargetingkids,sotheygrowupconstantlythinkingaboutspendingmoney.Andhowmanyadsdoyouseeaboutsavingmoney?None.

Thereasonwedon’tknowhowcreditworksisbecausenobodyeverexplainedittous.Banks,creditcardcompaniesandmortgagecompanieswouldpreferthatyouneverfoundoutbecauseitisintheirbestinteresttokeepyouindebt.Theyonlymakemoneywhenyouareindebt.

OnceyoureadPart1,youwillneverlookatcreditthesamewayagain.Onceyouunderstandexactlyhowcompoundinterestisbeingusedagainstyou,youwillbeshocked.

Weneedtotakeactionnow.Wecannotrelyonanybodytotakecareofus;weneedtotakecareofourselves.Wecannotblameanybodyforoursituation.Weneedtotakeresponsibilityforwhatwehave,whatwedon’thaveandwhereweareinlife.

Therearemanybooksandresourcesouttherethatcanteachyouhowtogetoutofdebt,butthisbookisdifferent,andthatdifferenceisacrucialone.Halfofthisbook(parts1and2)explainswhatcreditisandhowtogetoutofdebt;thesecondhalf(parts3and4)willshowyouhowtochangeyourmindsetaboutmoneyandhowtochangeyourlimitingbeliefs.

Inmyquesttounderstandwhymostpeoplefailandonlyfewsucceed,Irealizedthatmakingmoneyiseasy,theproblemisalltheemotionalgarbagethatwehavearoundmoney.Iamafirmbelieverthatifpeopledon’tchangetheirmindsetaboutmoney,iftheydon’tsolvetheirissuesaboutmoney,theywillalwayshavefinancialproblems.Eveniftheywinthelottery,iftheydon’tknowhowtodealwithmoney,soonerorlatertheywillloseitall.Wehaveseenthishappenincountlessexamplesofovernightmillionaires.

Somygoalhereistoprovideyouwithasimple,step-by-stepplanthatwillhelpyougetoutofdebt,andalsotoprovideyouwiththetoolsandmotivationtochangeyourmindsetandyourbeliefsaboutmoney.Thisis,inmyopinion,thebestwaytogetoutofdebt,stayoutofdebtforever,andstartaccumulatingthewealththatyouandyourfamilysodeserve.

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Wheretostart

Dependingonyourparticularsituation,therearedifferentapproachestogettingoutofdebt.Let’sreviewthemnowsoyoucandecidewhichapproachwillworkbetterforyou,basedonwhereyouarefinanciallyrightnow.Ifyouhavebeenpayingyourbillsontimeandhaveagoodcreditrecord(andwanttokeepitingoodstanding),andyouareworkingorhaveamonthlyincome,thenyoucanfollowtheplanoutlinedinPart2.CreditCounselingorDebtSettlementwillnotbeagoodchoiceforyou.Ifyouraccountsarepastdueandyoucannotmakethepayments,thenCreditCounseling(alsocommonlyknownasDebtManagementorDebtConsolidation)orDebtSettlementmightbeagoodchoiceforyou.YoucangotoPart3formoreinformationontheseservices.It’simportanttonotethatthereisnomagicbulletthatwillworkforeverydebtsituation.Butkeepinmindthatinmanycases,moneyproblemsareNOTtheresultoffinancialissuesbutratheraresultofhowwethink.Thismaysoundesoterictosomepeople,butwhenyouthinkaboutityouwillrealizethatitistrue.Forexample,takeanyself-mademillionaire,somebodythatwentfrompovertytomillionairebyhimselforherself.Ifyouweretotakealltheirmoneyaway,doyouthinktheycanmakeitback?Youbet!Thereasonisthattheyhaveadifferentsetofbeliefsaboutwhatispossibleinlife,theythinkdifferentlythanmostpeople.Andwhenyouconsiderthatmostpeoplethatwonthelotterylostitallwithinjustacoupleofyears,thenyoucanseethathowwethinkandwhatwebelieveispossibleforusmakesallthedifferenceintheworld.Idon’tbelieveinluck.Idon’tbelievethatwearelikealeafinthewindthatgoeswherethewindblows,withnocontrolwhatsoeveroverwhatispossible.Iusedtothinkthatway,butnotanymore.Ibelievethatweareallinchargeofourlivesandinchargeofourdestinies.AndIinviteyoutotrythisapproachinyourlife,anddiscoverthatinreality,youtrulyareinchargeofyourdestiny.Anythingispossibleforyou,nomatterhowtheeconomyisdoingorwhatisgoingonaroundyou.ThisisthereasonIincludedthesectionabouthowtochangeyourlimitingbeliefsinthisbook.Evenifyoumanagetogetoutofdebtwithoutchangingyourbeliefsaboutwhatispossibleforyou,thenthereisaveryhighchancethatyoumaygetbackindebtinthenearfuture.AndIsincerelywantyoutoliveasuccessful,happylifethatIbelieveisyourbirthright.Thereissomuchabundancearoundusallthetime,yetwefailtoappreciateit.Instead,wearetaughtfromanearlyagethatallsuppliesarelimited.Limitedjobs,limitedopportunities,limitedmoney,limitedeverything!Thennowonderwhenweanalyzeourbeliefsystems-seePart4-allkindsoflimitingbeliefsstartpoppingupthatweneverknewwehad,buthavebeenguidingeverythingwedidinourlivessincewewerelittlekids.

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Isincerelywantyoutobecomedebt-freeassoonaspossible,becauseIbelievethatbeingindebtisbeinginfinancialslavery.Itlimitseverythingyoudoinyourlife:whetheryouwillsendyourkidstoprivateorpublicschoolandtheeducationtheywillreceive,theareaoftownandthehouseyouwilllivein,eventhemedicalinsuranceyouwillget!Whenyouareinagoodfinancialsituation,youhavemanymorechoicesavailabletoyou.LivinginpovertyisNOTthesolutiontotheworld’sproblems.Nowit’stimetobeginyourjourney.Ifyouarereadytobecomedebtfreeandliveafinanciallystress-freelife,turnthepageovertoPartOne,whereIdiscusswhatcreditisandhowitcaneitherdestroyyouormakeyourich,dependingonhowyouuseit.Youwilllearnwhatbanksandfinancialinstitutionsdon’twantyoutoknow…

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Part1

UnderstandingCredit

Howcreditcardswork

Ifyouwanttoeliminateyourcreditcarddebtyouhavetounderstandwhatcreditis.

Incaseyouhaven’tfigureditoutyet,thecreditsystemworksagainstyou,unlessyouareprepared.

Andsinceitisanunfairgame,youneedtoknowtherules.Onceyouknowhowcreditworks,howcompoundinterestworks,youcanstartusingittoyouradvantage,insteadofbeingavictimofit.

Herearesomefactsyouneedtoknow.

In2005,arecord6billion“pre-approved”creditcardoffersweremailedtoconsumers.Bycomparison,only10yearsbefore,in1995,2.7billionoffersweremailedout.

Theseoffersusuallycarrya“lowintroductory”ratewhichis“fixed”forasetnumberofmonths.But,onceyoureadthefineprint,youfindoutthatinrealitythat“fixed”ratecanchangeatanytime,andforanyreason.WhatfollowswastakenfromanofferIrecentlyreceivedfromChaseBank.

“Rates,Feesandtermsmaychange:Wereservetherighttochangethetermsofyouraccount(includingtheAPRs)atanytime,foranyreason,inadditiontoAPRincreasesthatmayoccurforfailuretocomplywiththetermsofyouraccount”(underlyingismine)

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Soyoumaybethinkingyouaregettingagreatdeal,wheninrealitytheycanchangetheruleswhenevertheywant.

Unfortunately,youcannotbeatthesystem.Theywritetherulestotheiradvantageandwemustcomply.Everyyear,creditcardcompanies,banksandfinancialinstitutionsspendmillionsandmillionsofdollarslobbyingCongresstomakesurelawsarepassedthatbenefitthem,notconsumers.

Yousimplycannotcompete.

Thegoodnewsisthatyoudon’tneedtobeatthesystem;youjustneedtounderstandit.

Pre-approvedoffersaremailedtoanyoneonalistthatacreditcardcompanypurchases(usuallyfromtheCreditBureaus),anddoesnotmeanthatyouwilldefinitelygetacreditcard.Theyareinvitingyoutoapply,buttheyaretargetingtheirmailingstowardsconsumerswhoaremorelikelytorespondandqualifyforacard.

Ifyoudonotwanttoreceiveanymoreoffers,youcancall(888)567-8688torequestthatCreditBureausnotincludeyourfileinanypre-approved/promotionallists.Iencourageyoutoopt-out,if(fornootherreason)tominimizethechancesofidentitytheft.

IfyouprefertocontacttheBureausdirectly,writetothefollowingaddressesandtellthemyouwanttoopt-outofpre-approvalscreening:

EquifaxOptions:

POBox7401243-Atlanta,GA30374-0123(800)556-4711

ExperianConsumerOptOut

701ExperianParkway-Allen,TX75013(800)353-0809

TransUnion

Attn:MarketingOptOut–POBox97328–Jackson,MS39288-7328

(800)680-7293

Thereareseveralmorepracticesthathavebecomemorecommoninthelastfewyears.

Oneofthemisthe“GracePeriod”,whichisthenumberofdaysyouhavetorepayyourpurchasebeforeyouarechargedinterest.Manycardshavereducedthegraceperiodfrom30daysdownto21days.Witha21-daygraceperiodyouhavelesstimetopayforyourpurchasesinfull,andabetterchanceofpayinginterestthanbefore.And,iftheamountisnotpaidinfull,interestischargedfromthedateofpurchase,notthedayyoustartedfinancingit.

Anotherpracticeistheadditionoftheover-the-limitfee.Manyconsumerswouldexpecttheircreditcardtobedeclinedifatransactionwouldputthecardovertheircreditlimit.But,increasingly,credit

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cardcompaniesareallowingthesetransactionstogothrough,thenslappingconsumerswithanover-the-limitfeeof$20,$25ormore.

Latefeesareescalatingtoo,adding$30to$50toyourcreditcardbill.Nottomentionthatyourinterestrateskyrockets.IpersonallyknowsomeoneinNewYorkwhosenthispaymentinlate,andhisinterestratewentfrom9%to29%thefollowingmonth.Thisisverycommon.

ThereisalsotheForeignTransactionfeethatyougethitwithwhenwithdrawingyourmoneyfromanATMoutsideoftheStates.Keepthatinmindnexttimeyoutravel.

SimplywithdrawingmoneyfromanATMthatdoesn’tbelongtothebankmeansyouaregoingtobehitwithtwofees.OnefeethatischargedbythebankthatownstheATM,andanotherfeethatischargedbyyourbank(notallbankswillchargethisfee,butmostwill).Withdrawing$20fromanotherbank’sATMcouldresultin$4to$6infees.Howmanytimesayeardoyouwithdrawmoneyfromotherbank’sATMs?

Therearewaytoomanyfeestolisthere,butyougettheidea.

Areyouaskingyourselfwhatyoucandotoprotectyourself?

Thereareanumberofthingsyoucando.

First,youneedtocheckyourcreditcardstatementseverymonth.Believeitornot,mostpeopledonotchecktheirstatements.Checknotonlyyourcreditcardstatementsbutalsoyourcheckingaccountandyoursavingsaccountstatements.Lookforanyerrors.

Lookforfees,andseeiftheyarecorrect.Ifyouseeanyover-the-limitorlatefees,callthecompanyandask(politely)iftheycanwaivethem.Theywillusuallywaivethem,butifyouarelateagainoroverthelimitagain,theymaynotdoitasecondtime.

Beverycarefulwhenmailingyourpayments.Sendthematleast10daysbeforetheduedatetoavoidlatefees.Orsetitupsothebalanceisdeductedfromyourcheckingorsavingsaccountautomatically.Contactyourbanktofindouthowtodoit.

Youcanalso(andIencourageyoutodothis)callyourcreditcardcompaniesandaskforareductionofyourinterestrate.Thismaybealittlehardertoget,butiftheydon’twanttodoit,don’tdespair.Callagaininacoupleofweeks,andaskagain.InPart2youcanreadascriptyoucanusewhenyoucall.

Whatiscompoundinterest?

Thisisthemostimportantconcepttounderstandifyouplantostaydebtfreeforever.

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Andforyoutounderstandexactlyhowitworks,I’llaskyouaquestion:Whatwouldyouratherhave,amilliondollarsincashrightnow,oronepennytoday,twopenniestomorrow,fourpenniesthenextday,eightpenniesthenextoneandsoonforthenext30days?

Mostpeoplewouldchoosethemilliondollars,anditisagoodchoice,Imean,whowouldn’twantamilliondollars?However,thesecondoptionismuchbetter.Lookatthefollowingtabletoseethepowerofcompoundinterestinaction:

Day1:$.01Day2:$.02Day3:$.04Day4:$.08Day5:$.16Day6:$.32Day7:$.64Day8:$1.28Day9:$2.56Day10:$5.12Day11:$10.24Day12:$20.48Day13:$40.96Day14:$81.92Day15:$163.84Day16:$327.68Day17:$655.36Day18:$1,310.72Day19:$2,621.44Day20:$5,242.88Day21:$10,485.76Day22:$20,971.52Day23:$41,943.04Day24:$83,386.08Day25:$167,772.16Day26:$335,544.32Day27:$671,088.64Day28:$1,342,177.28Day29:$2,684,354.56Day30:$5,368,709.12

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Thisisthemagicofcompoundinterest.Apennydoubledeverydaymaynotseemlikemuch,butthecompoundingfactorisincredible.Infact,AlbertEinsteinhasbeenquotedassaying“Themostpowerfulforceintheuniverseiscompoundinterest.”

Asyoucanseeinthetableabove,apennydoubledeverydaygivesyouover$5,000,000injust30days.Thisishowpowerfulcompoundinterestis.Andthisiswhatcreditcardcompaniesareusingagainstyou.

Whenyoumakechargesonyourcreditcard,youpayinterestonanybalanceyoucarry(balancewouldbeanyunpaidamountonyourcreditcardstatement).Thisinterestiscalculatednotonlyontheinitialprincipalbutalsotheaccumulatedinterestofpriorperiods.

Compoundinterestcanreallyhurtyou,especiallyifyouaremakingtheminimumpaymentoneachofyourcreditcards.Whenyoucarryabalance,compoundinterestiscalculateddaily,whichmeanseverydayinterestisaddedtoyourbalance.Ifyoupaytheminimumpaymentonacreditcard,youareonlymakingthebankricher.

Toshowyoucompoundinterestinaction,considerthatifyouhaveacreditcardwith$5,000balanceat18%ayear,andyouweretopayonlytheminimumpayment(let’ssayit’s3%ofyourbalance),itwouldtakeyou199monthstopayitoff!(Assumingthattheratedoesn’tchangeandyouneveruseyourcardagain).Soyouraccountwillbepaidoffinexactly199months(over16years!)andyouwillhavepaid$4,698.46ininterest.Thisisinsane.Thisiswhatbanksdon’twantyoutoknow.Sendthemonlytheminimumpaymentandtheywillloveyouforever.(Source:http://www.bankrate.com/calculators/managing-debt/minimum-payment-calculator.aspx)

Howhomemortgageloanswork

Ifyouownyourownhomeyoumaynoteventhinkofyourmortgageasdebt.Youmayevenbelievethatthehouseisreallyyours.Youneedtounderstandhowmortgageloansworkifyouwanttobetrulydebt-free.

Homemortgagesoperatethesamewaythatcreditcardsdo.Thedifferenceisthatmortgagecompanieswillneversaythattheinterestontheirloansiscompoundeddaily(maybeontheirfineprint,buriedamonghundredsofpagesthatyousignatclosing).Butnowthatyouunderstandhowcompoundinterestworks,youmaystarttorealizethatitonlymakessensetopayoffyourmortgageassoonaspossible.

Mostpeoplejustassumethattheinterestontheirmortgageissimpleinterest.Whentheygeta6%interestrate,theythinkthattheinteresttheypaywillbe6%ofthetotalamounttheyfinanced,calculatedyearly.ThisiswhatIfoundoutaftertalkingtomyclients.Butnothingcouldbefurtherfromthetruth.Inreality,ifyoupaidoffyourwholemortgageinoneyear,thenyes,theinterestratewouldbe6%(well,actuallyalittlemorebecauseofthecompoundingeffect,butI’mtryingtoillustrateapoint

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here).Butifitispaidover30years,thentheactualinterestrateiswellover100%!Thinkaboutit!Youcouldbuymorethan2houseswiththesamemoney!

LoanAmount

InterestRate

Term/TypeMonthlyPayment

TotalPaid(Principal+Interest)

InterestPaid

$200,000 6% 30years,fixed $1199.10 $431,676.80 $231,676.38

Thereasonthattheinterestrateissoimportantisthatyou'repayingcompoundinterest,notsimpleinterest.Thehighertheinterestrate,thenobviously,themoreinterestyouwillpay.Ihaveseenpeoplewitha9.8%interestontheir$300,000loan;in30yearstheywillhavepaidover$631,000ininterestalone!That’sover200%interest!

Theseexamplesareworrisome;however,theydonotcomparetotheothertypesofmortgageloansthatarecausingsomanypeoplelosetheirhomes.

Oneofthemisthesocalled“InterestOnly”loans.Basicallyyouonlypaytheinterestportionofthepayment,deferringthedifference(therebyaccumulatinginterest,whichisaddedtoyouraccount).ItmeansthatyouarenotonlyNOTpayingdownthebalanceofyourloan,butyouarealsoaddingmoreinterest(youareaddinginteresttothebalanceyoudidn’tyetpay).Ifpropertyvaluesaregoingup,thenitmaynotbeabadloaninsomespecificcases(i.e.,buyingahousewiththeintentionofsellingitinafewmonths);however,inadecliningmarketitisfinancialsuicide.TheonlywaysomebodywouldbenefitfromanInterestOnlymortgageloanisiftheyweresendingsomemoneytobeappliedtowardstheprincipaleverymonthandtheinterestrateissubstantiallylowerthantheyhadbefore(iftheyarerefinancing).Onpurchasesitwasagoodoptionwhenhouseswereappreciatingveryfast,aswasthecaseinmanypartsofthecountrynottoolongago,butobviouslyveryrisky.Intoday’smarket,it’sdefinitelynotanoptiontoconsider.

TheriskiestmortgageloansavailablearecalledOptionARM(AdjustableRateMortgage)orPickAPayloans.Everymonth,yougettopickwhichpayment(outoffour)youwillsendtothemortgagecompany.Thisisagoodoptionforprofessionalsorbusinessownerswhoseincomefluctuatessharplyfrommonthtomonth,butdefinitelyNOTformostpeople.

Withoption1yousendlessthanthatmonth’sinterest(whichmeans,thedifferenceisaddedtothebalance,collectingmoreinterest.)Forexample,let’stakea$200,000loanwithaFullyAmortizingrate(therealratethatwouldpayofftheloanin30years)of7.683%andaminimumpaymentrateof1.25%.Theoptiononepaymentwillbe$666.50(deferring$614oftheinterestthatwasduethatmonth,whichautomaticallyisaddedtothebalanceandstartscollectinginterest)

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Withoption2,yousendonlytheinterestforthatmonth(whichmeans,youarenotpayingdownthebalance,orexplaineddifferently,it’sasifyouwerelike“renting”thehouse!Followingthepreviousexample,youwouldsend$1,280.60forthatmonth,butthebalanceisnotpaiddown.

Withoption3,yousendtheregularpayment(principalandinterest)calculatedover30years.Inthisexample,itwillbe$1,423.58.

Andwithoption4yousendtheregularpaymentcalculatedover15yearsinsteadof30,butitwillbeobviouslysubstantiallyhigher.Followingourexamplethatpaymentwouldbe$1,874.88

Canyouguesswhichpaymentmostpeopleusuallysend?

Ihaveseenmortgagestatementsfrombankswheretheoptionthatishighlightedinthepaymentcoupon(orinbig,boldletters)isalwaystheminimumpayment(option1).Thisleadspeopletobelievethat’sthepaymenttheyshouldsend,andmanypeoplesendjustthat.Oneofmyclientsadded$60,000tohismortgageloaninjust2½yearswithoutrealizingwhatwasgoingon.Inmyexperience,manypeoplewerenotwellinformedwhentheywereofferedtheseloans.

OptionArmloanscanspelltrouble,especiallywhenpropertyvaluesdeclineandhomeownersowemorethantheirhouseisworth.Toaddinsulttoinjury,whenpeoplerefinancetheydiscoverthattheinterestrateisalwayshigheronanOptionArmloanthanona30-yearfixedloan!Fortunately,thesetypesofloansarenotsopopularintheUSrightnowastheywereintheearly2000’s.Asyoucansee,ignoranceisnotbliss,isexpensive.Manypeoplebelievethatpayingofftheirmortgageisabadfinancialdecision,andtheyhavetwoargumentstobackupthisposition.Irespectbotharguments,butIdonotagreewitheitherone.Thefirstargumentisthatahomemortgagehastaxbenefits(sincemortgageinterestcanbedeductedfromyourtaxes);thesecondisthatsincetheinterestonamortgageisusuallylow(around4to6%inthelastfewyearsdependingonmanyfactorslikeyourcredit,etc),youwillbenefitbymakingregularpaymentstoyourmortgagelenderandinvestingyourdiscretionaryincomeelsewhere,aslongastheinterestonyourinvestmentishigherthantheinterestonyourmortgage.Let'slookatbotharguments.Asfarasthemortgageinterestbeingtaxdeductible,whatitreallymeansisthatifyoupay,let’ssay,$10,000inmortgageinterestinagivenyear,youwillsave$2,500intaxes(ifyouareata25%bracket;itwouldbeevenlessmoneyifyouareatalowerbracket!).Thinkaboutthisforamoment.Doesitreallymakefinancialsensetoyou?Payingthebank$10,000togetback$2,500?Ifyouarelikeme,itwillnotmakeanysenseatall.Itmakesmoresensetopayoffthemortgage,andonceit'spaidoff,yougettoKEEPthe$10,000(orwhateveryouwouldhavepaidininterest)asdisposableincomeorasinvestmentmoney.Asfarasinvestingyourmoneysomewhereelsethatcouldgiveyouahigherreturn(higherthanyourmortgageinterest),letmeofferthefollowingfactstoyou:whateverinterestyoupayonyourmortgage,willbetheGUARANTEEDinterestyouwillmakebypayingitoff(orpayingitdown).Youcannotguaranteetheperformanceofanyotherinvestment,asyouprobablyalreadyknow.Marketconditionsfluctuateandcouldaffectyourinvestments;however,payingoffyour6%mortgageisaguaranteed6%“return”.

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Andlet’sfaceit,mostpeople,includingmyself,arenotkeeninvestors.ManywillhaveaMutualFundorretirementaccountthattheyrarelyreview,andinvestingdoestakealotofplanningandresearch.Withoutproperplanningandresearchyoucouldbe“throwingdarts”atyourfinancialfuture.Whenyouconsiderthis,thenpayingoffyourmortgageearlydoesmakefinancialsenseduetoitssimplicityandhighreturn.However,ifyouareakeeninvestor,thenitmaymakesensenottopayoffyourmortgageandinvestyourdiscretionaryincomesomewhereelse.AnotheroptionwouldbewhatiscalledMortgageAcceleration,describedindetailherehttp://www.overcome-debt.com/mortgage-accelerationInthenextpart,IwillshowyouawaytopayoffALLyourdebt,includingyourmortgage,inrecordtime.Thismethodisnotaboutrefinancingyourhome,itisnotaboutdebtconsolidation,norisitaboutdebtsettlement.Itisbasedonasurprisinglysimple(andincrediblypowerful)formulathatwillgiveyouthefinancialfreedomyouandyourfamilydeserve.Thissystemwillworkevenifyouareunderadebtconsolidationprogramorifyouhavestudentloans.

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Part2

HowtoGetoutofDebt–TheStep-By-StepPlan

Ifyouarereadytobecomedebt-free,hereisaneffective,provenstrategythatwillhelpyougetoutofdebtinanorganizedway.Followingthestep-by-stepplanwillgetyououtofdebtinrecordtime.

Step1-Youhavetoabsolutely,totally,100%,commityourselftogettingoutofdebt-andcommityourselftofollowingyourplan,nomatterwhathappens.Thismayseemobvious,buttheonlywayyouaregoingtosucceedisifyouare100%committedtoyourdebteliminationplan.AnthonyRobbins,wellknownmotivationalspeaker,saysthatit'sinthemomentsofdecisionsthatourdestiniesareshaped.DecideTODAYyouaregoingtomakeithappen.Donottakethissteplightly.Youwillnotsucceedunlessyoucommityourself.Itmayhelptogetabuddytokeepyouontrack.

Ifyouaskasuccessfuldieterhowtheylosttheweightandkeptifoff,theywilltellyouthatitwasnotbystarvingthemselves,butbycommittingtoasensibleplan.Itisthatcommitmentthatgetsyoubackonthehorseifyoufalloffthewagon.

Step2-Stopchargingyourcreditcardsasoftoday!

Yourmaingoalrightnowistogetoutofdebtassoonaspossible.Soyoumustcutyourspending.Iknowthisistoughtodo,butyouhavetocutyourcreditcards.(Keeponeincaseofanemergency.)Ifyouaretrulycommitted,stopreadingandstartcutting.Togetoutofdebt,youwillneedtochangeyourhabits.Youroldhabitswillnotwork!

Thesacrificesyoumakenowwillhaveanincrediblebenefitinthelongterm.Fromnowon,ifyoucannotpaycashforsomething,don’tbuyit.

Step3-Findoutwhereyourmoneyisgoing.Youneedtoknowexactlywhereyourmoneyisgoingandwhatyourexpensesare.

YoucanuseaprogramlikeQuicken,AceMoneyLite(free),orsimilarsoftwaretotrackyourmoney.Useanotepad,apenandcalculatorifyoudon’thaveacomputer.

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YoumustwritedownALLyourexpensessoyoucandetermineexactlywhereyourmoneyisgoing.Carrywithyouapieceofpaperwhereyoucanwritedownallyourcashexpenses.Theyareusuallythehardesttotrackbutaddupveryquickly.Didyoubuycandyandasodawhenyoufilledupyourtank?Writeitdown.

ExampleofaDailyRecord

Thursday,February12

Coffee&pastry $3.50

Lunch $7.90

Magazine $5.00

Soda $1.00

Vendingmachine $1.00

Groceries $76.85

Thebenefitsofthislogwillbefantastic.Haveyoueverwonderedwhathappenedtothat$20billyouhadinyourpocketyesterday?Itwillneverhappentoyouagain,whenyoustarttotrackyourdailycashexpenses.

Attheendoftheweek,youwilladdallthenumbersupsoyoucancomeupwithyourweeklyexpenses.Thiswillbeeasy,onceyouhaveallyourdailylogsfilledout.

ExampleofaWeeklyRecord

February8-14

Breakfast $17.50

Lunch $42.00

OfficeDepot $25.00

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Entertainment $14.00

Snacks $12.00

Groceries $126.85

Gasoline $41.00

Attheendofthemonth,addallyourweeklyrecordstocomeupwithexactlyhowmuchmoneyyouspentthatmonth.

ExampleofaMonthlyRecord

SpendingRecord-February

week1 week2 week3 week4 TOTAL

Rent/Mortgage 1200

Groceries 140 87 95 120 442

Lunch 42 46 53 30 171

Breakfast 17.5 22 16 18 34

Laundry 6 6 6 6 16

Gasoline 60 45 70 40 215

Gas&Electric 80 0 0 0 80

Entertainment 30 0 45 15 90

CellPhonebill 0 0 80 0 80

CableTV 76 0 0 0 76

Magazines 5 0 0 5 10

Newspaper 2 1.5 2 2 7.5

OfficeDepot 25 0 0 0 25

FastFood 22 0 16 26 64

Pizza 12 12 0 0 24

Onceyouknowwhereyourmoneyisgoing,lookforplaceswhereyoucan"trim"yourexpenses.Somecommonexamplesare:

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-Eatinglunchout:at$8/day,itisaround$200permonth.Somepeoplespend$10or$12everydayonlunch.Bagyourlunchafewtimesaweek.-GoingtoStarbuckstwiceaweek:ifyouonlyspend$6aweek,itwouldamountto$25amonth.Maybeyoucouldskipiteverynowandthen?-CableTV:Maybeyouspend$80/monthormore,whenyoucouldbepaying$40to$60byeliminatingchannelsyouseldomwatch.-Occasionalfastfood:$25/weekwouldmean$100/month.-Magazinesubscriptionsyouseldomread:Cancelthem!Samewithnewspapers,musicservices,etc.

-Enjoymoviesandpopcornathomeinsteadofgoingout.

-Usecouponsforgroceriesandbuystorebrands.Don’tbetemptedtobuysomethingyoudon’tneedjustbecauseit’sonsale.Also,bewareof“bargains”.Ifyouarethetypeofpersonwhoisattractedtoa“Sale”signasifbyamagnet,beawarethattheyareresponsibleformuchimpulsespending.

-Shopatconsignmentstores&discountstoreslikeRossorMarshalls(theirclothesareusuallygoodqualityandpeoplewon’tnotice!)

-Cutdown(oreliminate)sodasandsnacks.Theyonlymakeyoufat,anyway.

-Eatfrozenpizzaathomeinsteadoforderingout.

-Useyourcreativity!Whereelsecouldyousavemoney?Remember,youdoneedtochangeyourlifestyleifyouwanttomakeithappen.

-Calltwoorthreecarinsurancecompaniesandgetnewquotes.Ifyoucanloweryourinsurancepaymentsthroughanothercompany,thengoaheadandswitch!Isavedover$600ayearwitha5minutephonecall.

Step4-Developabudget.

Considerthis:mostpeoplespendmoretimeplanninga3-dayweekendthantheydoplanningtheirlife.Bymakingabudget,youarecommittingyourselftogettingoutofdebt,inwriting.Usethebudgetspreadsheetyouwillfindattheendofthisbook(underResources)toprepareyourbudget.Step5-MakealistofALLyourcreditors(creditcards,departmentstores,etc)andcallthem.

Youaregoingtoaskthemtoloweryourrate.Thishasworkedamazinglywellformanypeople,includingmyself.Hereisasimplescriptyoucanuse:"Hi,mynameis[YourName].Iamagoodcustomer,butIhavereceivedseveraloffersinthemailfromothercreditcardcompanieswithlowerinterestrates.I

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wouldliketoseeifyoucouldlowertherateonmycard,asitisalittlehigh”.Iftheysayno,thensaysomethinglike“Iwouldhatetohavetoswitchtoanothercompanyafterbeingwithyoufor__years…couldyoupleasecheckagain,orcouldIpleasetalktoyoursupervisor?”Youcanalsoasktoeliminateanyfeestheymayhavechargedyourecently(latefees,yearlyfees,etc).

Ifyourcreditcardcompanydoesn'twanttoloweryourrate,justtryagainafewdayslater.Youcanalsosaythingslike"Whatcanyoudotohelpmeout?"or"Canyoudoanybetter?"Forthisstrategytowork,youhavetobepolite,butfirm.Neverthreaten,raiseyourvoiceorgetangry.

Step6-Openasavingsaccountifyoudon’thaveone,anddepositmoneyiniteverymonth.

“ApartofallyouearnisYOURStokeep”

GeorgeClason,“TheRichestManinBabylon”

Youhavetopayyourselffirst.Thisishowyouwillstartbuildingwealth,anditwillalsobeyouremergencyfund.Everytimeyougetpaid,depositsomemoneyinyoursavingsaccount.

Youneedtoconsidertwothings:

1-Treatitjustlikeanyotherbill.Depositmoneyeverymonth,evenifit'sonly$25.Depositmorewhenyoucan.Onceyoumakeitahabit,thisaccountwillgrowveryquickly;

2-NEVERwithdrawmoneyfromthisaccount(unless,ofcourse,youhavearealemergencythatyoucannotcoverwithyourincome).Ifyoudomakeawithdrawal,makesureyou“payyourselfback”assoonaspossible.Holdagaragesale,sellstuffyounolongerneed,dowhateverittakestoreplenishthemoneyyoutookout,ASSOONASPOSSIBLE.Otherwise,letitgrowatleastforafewyears.Onceyouaredebt-free,youcanusethismoneyasadownpaymentforahouse,oranyotherinvestment.Thisiscritical!Note:abirthdaypresentisNOTanemergency.Theideaistohavemoneyincaseyouneedtorepairyourcar,forexample,soyoudon’tdeviatefromyourdebteliminationplan.

Step7-Filloutthedebteliminationchart,andputtheDebtEliminationProgramintopracticerightaway.Youwillfindacopyofthedebteliminationchartattheendofthisbook.Youwillneeditforthisexercise.DuringyourDebtEliminationProgramyouwillbefocusingononeaccountatatimeandmakingminimumpaymentsonallothers.Thisiscrucialtoyoursuccess.

Whenyousendanextra$40toacreditcardcompany,anextra$25withyourcarpaymentandanextra$20toanotheraccount,youareonlydilutingyourefforts.Ifyoutacklemanyaccountsatonce,youmayfeellikeyouarenotaccomplishingmuchbecauseyoudon’tseetangibleresults.Andyouwillfeel

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discouraged.Withthisprogram,youwillbefocusingononeaccountatatimeuntilit’spaidoff.Inthisexample,youwillsendanextra$85tooneaccountinsteadof$40,$25and$20tothreedifferentaccounts.

Nowproceedtofilloutthedebteliminationchartasexplainedbelowtodeterminetheorderinwhichtheaccountswillbepaidoff.

Lookatthechartbelowasyoufollowalong.Theconceptisverysimple:Youwilldeterminetheorderinwhichyouraccountswillbepaidoffbasedonasimpleformula,andyouwillpayoffoneaccountatatime.

BynowyoushouldhavedeterminedhowmuchextramoneyyoucandedicateeverymonthtoyourDebtEliminationProgram(we’llcallityour“PowerPayment”).Ifpossible,Istronglyrecommendyoudedicate10%ofyourincomeasyour"PowerPayment”.Forsomepeoplethiswillbeeasy,forothersitmaybealittleharder.Trytodoitatleastuntilyouhavepaidoffafewaccounts.

Asanexample,wewilluseJonathanandTracy’schart,fromSanDiego.Theyareusing$400astheirPowerPayment.Theircombinedyearlyincomeis$70,000.Thisisthechartthattheyfilledout,basedontheirfinancialsituation.

NOTE:ifyourbudgetonlyallows$100or$200amonthitwillstillwork,itwilljusttakelonger.ThehigheryourPowerPayment,thefasteryouwillgetoutofdebt.

1 2 3 4 5 6 7

Debt TotalOwedMinimummonthlypayment

Column2÷Column

3Priority PowerPayment Monthsto

payoff2÷6

1 Mastercard $3,150.00 $126.00 25 5 959+126=$1085 3

2 Mastercard $8,200.00 $328.00 25 6 1085+328=$1413 6

3 Visa $2,200.00 $76.00 25 4 883+76=$959 2

4 Discover $800.00 $32.00 25 3 851+32=$883 1

5 DeptStore $630.00 $26.00 25 2 825+26=$851 1

6 Car1 $10,200.00 $425.00 24 1 400+425=$825 12

7 Car2 $15,000.00 $480.00 31 7 1413+480=$1893 8

8 Heloc $30,000.00 $350.00 86 8 1893+350=$2243 14

9 Mortgage $150,000.00 $1,079.00 128 9 2243+1079=$3322 45

Total $220,180

Total 92

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Howtofillitout:

-Onthefirstcolumnofyourchart,writedowntheaccountsinwhichyouhaveoutstandingbalances.

-Oncolumn#2,writedownthecurrentbalance.Oncolumn#3,entertheminimummonthlypayment.

-Oncolumn#4,dividecolumn#2bycolumn#3,andentertheresultingnumberhere.Thiswillbetheapproximatenumberofmonthsthatitwilltakeyoutopayofftheloanbypayingonlytheminimumpayment.TheamountisNOTexactbutit'shereonlytodeterminetheorderinwhichyouwillbepayingoffyouraccounts.Nowlookatthiscolumnandlookforthelowestnumber;thiswillbetheaccountyouwillpayofffirst.Forcreditcards,pleasenotethatbanksusuallyrequireaminimumpaymentequalto2%to4%ofyourbalance(thereareexceptions);that'swhyinthisexamplethenumberis25forallcreditcardsoncolumn#4.Ifthisisyourcaseandyoualsohavemorethanoneaccountwiththesamenumber,justfocusontheaccountwiththelowestbalanceFIRST.

-Oncolumn#5,entertheprioritybasedoncolumn#4,lowestnumbersfirst.

-Now,column#6iswhereyouwillenter,foryourfirstaccount(inthisexample,theonehighlightedoncolumn#5),your"PowerPayment"+theminimumpaymentforthataccount.Inthiscaseitwouldbe$435(minimumpayment)+$400(PowerPayment)=$835totalpayment.Nowthisaccountwillbepaidoffinjustover12months.Thenproceedtosendtheminimumpaymenttoallaccounts,andtheminimum+yourPowerPaymenttoyour#1account(oncolumn5)untilthisaccountispaidoff.Onceitispaidoff,thenyouaregoingtotargetaccount#2(alsooncolumn5),addingyourPowerPayment+theminimumpaymentyouweresendingbeforetoyourfirstaccount.Inthisexample,foraccount#2,itwouldbe$835($400PowerPayment+$435minimumpaymentyouweresendingbeforetoaccount#1,nowpaidoff)+$27(minimumpaymentforaccount#2).Keepworkingthisplanuntilallaccountsarepaidoff.Youwillgetoutofdebt,allaccountspaidoff(includingyourmortgage)inrecordtime!Howwillyoufeelonceyouaredebt-free?

Afewthingsyoucandothatwillhelpyouwithyourplan:

- Putyourdebteliminationchartinaplacewhereyoucanseeitoften- Assoonasanaccountispaidoff,usearedmarkerandcrossitoff,orwritePAIDOFF(andthe

DATE)inbig,redletters- Also,everytimeyoupayoffanaccount,gocelebrate!Takeyourspouse(orsignificantother)

outtodinnerandfeelthepowerofyourdeterminationandpersistence.- Asyouseetheprogressyouaremakingonyourchart,think(withemotion)“Iambecoming

debt-free”.Feelhowitfeelstobedebtfree.Patyourselfontheshoulderforajobwelldone!(Doit,itworks!)

- Rememberthatextremesituationsrequireextremesolutionsandsacrifices,soifyouneedto,workextrahours,getasecondjob,holdgaragesales,sellstuffyoucanlivewithout,unsubscribefromservicesyoudon’treallyneed,etc.Ifyourcarispaidoff,resistthetemptationtobuyanotherone(foraslongaspossible).Yougettheidea.

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- Makesureyoursavingsaccounthasatleast$2000asanemergencyfund.AddanyextramoneyyoucantoyourPowerPaymentandtoyoursavings,butdonotwithdrawfromyoursavingsexceptforanemergency.Ifyoudo,replenishitASAP.

- Everyday,severaltimesaday,saytoyourself:“Iamwealth,Iamabundance,Iamhealth,Iamjoy”.Feelitdeepinside,feeltheabundancesurroundingyou.Thiswastakenfromanexcellentbookcalled“Ahappypocketfullofmoney”.Orpickaphraseyoubelievein,andrepeatittoyourself,withfeelings,severaltimesadaylikeamantra.

Remember,keepingupwiththeJones'(otherpeoplewhoareindebt)willonlymakeyouaslavetodebtforlife.Nowyouknowyoucancontrolyourdebt.Onceyoustartyourdebteliminationplan,youwillfeelthepowerthatcomesfrombeingincontrolofyourfinances.Youcanliveyourlifebydesignandcreateabrightfutureforyourselfandyourfamily.Nowthatyouunderstandthestep-by-stepplantogetoutofdebt,commityourselftodoingit.Youdeservetobedebt-free!

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Part3TheCreditCounselingandDebtSettlementoptions

Thereseemstobeawidespreadmisconceptionaboutwhatacreditcounselorcanandcannotdoforyou,solet’sstartbyexplainingwhatCreditCounselingisandthenwe’llexplainwhatDebtSettlementis.CreditCounselorswillnotsettleyourdebts,thatisnotwhattheydo.Whattheycandoforyouisconsolidateyourunsecureddebtsandloweryourinterestrates,andthencollectapaymentfromyouthroughadebtmanagementplan.CreditCounseling,whendonethroughareputablecompany,canbeagreathelptogetoutofdebt.ItisalsoknownasDebtConsolidationsincetheideaistoconsolidateallyourunsecureddebtsintooneaccount,andyousendonlyonepaymenteverymonthtotheCreditCounselingcompanywhointurnforwardsittoyourcreditors.Theyusuallychargeafeeofabout$35-$60permonthfortheirservicesandyoucanexpecttobedebtfreewithin5years.Theywillnegotiatealowerrateforyou(about7-9%orso,dependingonseveralfactors)whichcansometimesbeahugereduction(keepinmindthatsomepeoplearepaying23%ormore!).Whenyoustarttheprocess,youwillbeaskedtocutupyourcreditcardswhichisalwaysagoodthingtodowhenyouareindebt(regardlessofwhetheryoudodebtconsolidationornot!)Youwillprobablynotbeabletogetnewcredituntilyouraccountsarepaidoff(let’sfaceit,whowouldgiveyoucreditiftheyseeinyourcreditreportthatyouhaven’tbeenabletopaytheothercreditors?)butthegreatthingisthatyouknowyoucanbedebtfreeinafewshortyears.Agoodcreditcounselingcompanywilldowhatitsnameimplies,theywillteachyouhowtohandleyourfinances,andmanywillevenofferfinancialclassestohelpyouunderstandhowtomanageyourmoneyproperly.Thechallengeisthatmanycreditcounselingagenciesmaynothaveyourbestinterestinmind.Iknowthisforafact,sinceIoncestartedworkingforaCreditCounselingcompanyinSanDiegoandhadtoresignonmyseconddaywhenIbecameawareoftheirunethicalpractices.Isimplywouldneverbepartofacompanythattakesadvantageofthepeopleitissupposedtobehelping.ItoldtheownerwhatIthoughtandresigned;itwascleartomethathewasinthatbusinessjustforthemoney(andhewasmakingALOTofit!).Tofindalegitimatecreditcounselor,gototheNationalFoundationforCreditCounselingathttp://www.nfcc.orgDebtsettlement,ontheotherhand,iswhenacreditorforgivesaportionofyourdebtiftheythinkthattheywillnotbeabletocollectthetotalamount.Thereasoningissimple:it’sbettertocollectsomethingthannothing.Obviouslynoteverybodywillbeabletosettletheirdebts.Apersonmaybesuccessfulsettlingonedebtbutmaybeanothercreditcardmaynotbewillingtosettle.Ifyoucanconvincethemwithenoughfacts

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thatyouabsolutelycannotpaytheentireamount,theyyouhaveaverygoodchanceofreachingagoodsettlement.Sinceacreditcardsettlementwillshowupasanegativeonyourcreditreport,thisoptionisnotforyouifyouarepayingyourbillsontime,haveagoodrecordandwouldliketokeepitthatway.PleasenotethatdebtsettlementshouldONLYbeusedasalastresourceifyouareconsideringbankruptcy;theprocesscansometimesbedifficultanditseffectivenesswilldependonmanyfactors.It’slikedoingyourowntaxes.Yes,youcandoit,butyouwillneverknowhowmuchbetterwouldhavebeenifitwasdonebyaprofessional.Almostalwaysitwouldbedonemuchbetterbyaprofessional.Istronglysuggestthatifyoudecidetogothisrouteanddecidetotrytosettleyourdebts,youhireaprofessionaltodothejobforyou.Thiswayyouwillbewayaheadofthegame,sinceaprofessionalhasbeenthroughtheprocessmanytimesandhastheexperiencenecessarytoreachagoodsettlementagreementonyourbehalf.Keepinmindthatcollectorsarepeoplewhohavebeentrainedtocollectmoney,theydoiteverydayforaliving,sotheydoknowwhattheyaredoing.Theyareusedtonegotiatingwithpeople,andtheyhavebeenthroughdifferentscenariosandsituations.Sothebestoptionistohiresomebodywhoisusedtodealingwiththesetrainedcollectorsandknowshowtoplaytheirgame.Justbeverycarefulsincetherearealotofcrooksoutthereit’salwaysbettertogowithacompanyorattorneythatwasreferredtoyoubysomebodywhocangiveyougoodreferencesabouttheirservices.Butifyoudodecidetodoityourself,herearesomeguidelinesthatwillhelpyouachieveverygoodresults.

1- Settlingwillonlyworkifyouraccountisseriouslypastdue.Companieswillonlyofferagoodsettlementoptionwhentheybelieveit’stheirlastchancetorecovertheirmoney.Whentheythinkthatiftheydon’tsettle,theywon’trecoverapennyofthemoneyyouowe.Usually,thebesttimetostartnegotiatingadebtsettlementisabout4or5monthsafteryousentyourlastpayment.Rememberthatatabout6monthsorlesstheywillprobablysellyouraccounttoacollectionagency,sodonotwaitformorethan5months.Oncetheaccountissoldtothecollectionagency,youwilllosemostofyourleverage.Youcanstillsettle,butit’snotthesame,thesenseof“urgency”thatthecreditcardcompanyhadbeforeisnowlost.

2- Mostsettlementsareforbetween30and70%oftheamountowed.Itwilldependonseveralfactors,mostlyonyournegotiationskillsandhowlongithasbeensinceyousentyourlastpayment.Youmaywanttooffer20%,butexpectyouroffertoberejected.Yourgoalshouldbetosettleforabout50%ofyourdebt,butsettlingfor2/3rdscanbeareasonablegoal.Keepinmindthatpeoplewhoactuallysettlefor10-20%aretheexceptiontotherule;veryfewpeopleaccomplishthis.

3- Beforeyoutalktothem,makesureyouhaveallthepaperworkyouneedinfrontofyou:-allcopiesofyourstatements,lettersfromyourcreditors,andadedicatednotepadwhereyoucantakenotesofeverythingyoudiscussduringyourconversation.Remembertoalwayswritedownthedateandtimeofthecall,thenameofthepersonyoutalkedto,theirnumberorextensioniftheycanprovideit,andeverythingyoutalkedabout.

4- Thisisoneofthemostcriticalfactorshere:always,nomatterwhattheysayandhowmuchtheythreatenyou,ALWAYSbenicetothem.Never,EVERuseprofanelanguageorthreats;itwillonly

25

makeyouloseyourbattle.Thekeyistoalwaysbeniceandtreatthemwithrespect.Ifyoudeviatefromthisevenforamoment,youlose.

5- Makesureyougetalloffersinwriting.Whateveryoutalkonthephone,ifyoudon’tgetitinwriting,isuseless.Anytimetheyofferadealyoufindacceptable,makesureyouaskthemtosendittoyouinwriting.

6- Occasionallyyoumaytalktosomebodywhomightnotbewillingtonegotiate,orwhowilltreatyouinadisrespectfulway.Inthiscase,youcaneitherpolitelyterminatethecall,orasktospeaktoasupervisor.Butagain,alwaysbeverypoliteandrespectful,andneveruseprofanelanguageorthreats.

7- Askthemtoremovealllatefees,financechargesandoverthelimitfeesfromyouraccount.Thisalonewillreduceyourbalancesubstantially.Donotdemand,alwaysaskpolitely.“Youknow,IwouldreallyliketopayyouallthatIowe,butIsimplycan’t.Ilostmyjobandhaveverylimitedincome(orwhateveryoursituationis).Butifwecangetthebalancetobemoremanageableforme,Iamwillingtostartsendingyoupaymentsstartingthisweek“.Iftheyseethatyouaresincereandwillingtopaythem,youhavemorechancesthattheywillbewillingtohelpyou.

8- Youwillbetalking(mostly)totrainedprofessionals.Theygothroughextensivetrainingonhowtocollectmoneyandhowtoasktherightquestionstogettheinformationtheywant.Soneverlietothem.Justbesincere,youwanttopaybutyoudon’thavethemeans,butiftheycanhelpyoubyreducingthetotalbalanceyouwillbehappytopaythem.Thisistheattitudethatwillhelpyou.

9- Alwaysstartwithagoalinmind.Whatwouldbeagoodamounttosettlefor?Sayyouowe$10,000toacreditcardcompany.Agoodnumberwouldbe$5,000(50%)orless,butitwilldependonmanyfactors.Soiftheyofferyoutosettlefor$8,000youcanpolitelydecline,becauseitwould“probably”bebetterjusttofilebankruptcy(again,iftheyfeeltheywillloseitallbecauseyouarefilingforbankruptcy,theymayconcede).Manytimesyouwillgetaphonecalloraletterafewdayslaterofferingtosettleforless.

10- Keepinmindthattheywillalmostalwaysrunyourcreditreportandlookatyourpaymenthistory.SoifyouarepayingallyourbillsontimebutnottoXYZCompany,thenXYZwillnotbewillingtosettlewithyou.Afterall,ifyouarepayingeverybodyelse,chancesareyoucanpaythemaswell.Butiftheyseeinyourreportthatyouhavenotbeenpayingmostofyourbillsforoverthreemonths,orfourmonths,thentheywillmostlikelybewillingtosettlewithyou.Iftheyseeit’stheirlastchancetorecovertheirmoney,thenyouhaveleverage.Butthisisatwo-edgeswordasitcanbackfireonyouifyoudon’tknowhowtonegotiateproperly.

11- Therearefourfactorscriticaltothesuccessofthedebt-settlementnegotiationprocess:Communicatingeffectively,Negotiating,DocumentingandFollowingUp.Whenyouexcelinallfouryouwillwalkawaywithgreatresults.

12- Whenyouagreetosendapayment,manytimesthecollectorwillaskyoutopayrightthen,whileyouareonthephone.Itisveryimportantthatyoudonotdoso:makesuretheysendyoutheofferinwritingFIRST;thenyoumailthemthecheck.Youcansaysomethinglikethis:“Iunderstandyouwantapaymentrightnow,butunfortunatelyIcannotmakeapaymentatthistime,itisjustnotpossible.Iwillhave$______soonandwanttosettleatleastoneofmyaccountswithwhoeverwillgivemethebestdeal.Couldyoupleasesendmeanofferinwriting?”Theamountyoumentioninyourconversationshouldbearoundnumberrepresentingabout30-50%ofyourbalance,orwhateveryoucanpayatthetime.

13- Thisisworthrepeatingmanytimes,becauseit’scriticaltoyoursuccess.Alwaysbekind,niceandpolite.Besincereandneverlie.Eventhoughmanycollectorswillnotcare,makesuretheyunderstandyoursituation.“IwouldlovetopayyoubutIhavebeen(laidoff,inthehospital,with

26

areducedsalary,gotdivorced,etc).IamdesperateandI’mseriouslyconsideringfilingforbankruptcy”.

14- Everytimeyousendthemanything(whetheraletterorapayment)useCertifiedMailwithreturnreceipt.Rememberthatdocumentationisextremelyimportant;itisoneofthefourfactorsthatwilldeterminehowsuccessfulyouare.

Sothisisthedebtsettlementprocess.Itisnothard,butmostpeoplewillprobablyhavebetterresultsiftheygowithatrainedprofessional.Ifyoudodecidetodoityourself,makesureyoureadthischapterseveraltimes,leavenothingtochanceanddoyourresearchfirst!Studythesteps&writedownwhatyouaregoingtotellthem.

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Part4

ThePsychologyofMoney–Changingyourmindset

“Whateveryoubelievewithemotionbecomesyourreality.Youalwaysactinamannerconsistentwithyourinnermostbeliefsandconvictions”

BrianTracy

Iamconvincedthatthispartofthebookismoreimportantthanthestep-by-stepplanwehavejustdescribed.Tome,itdoesn’tmakesensetoshowyouhowtogetoutofdebtunlessyoucanchangeyourmindsetaboutwhatispossibleforyou.Onceyouchangeyourmindsetandyougetoutofdebt,nothingcanstopyou.Ifoundthatmostofthetimewhenwefailtoachievewhatwereallywant,thereisanunderlyingbelief(thatweareusuallynotawareof)thatisnotsupportingus.Haveyoueverexperiencedself-sabotage?Haveyoueverfailedtofollowthroughonsomethingthatyouwantedtoachieve?Mostlikelyyouhadconflictingbeliefsthatwerepullingyouindifferentdirections.Butwhatisabelief?Abeliefisafeelingofcertaintyaboutwhatsomethingmeanstoyou.Mostofourbeliefsaregeneralizationsaboutourpastthatarebasedoninterpretationsofourexperiences.Inotherwords,theyarebasedonhowweinterpretedwhathappenedtousatthemoment.Letmegiveyouanexample.Twinbrothersgotoanamusementparkanddecidetotakearideonaroller-coastertogether.Onewalksoutofthatridefeelingveryhappyandthrilled,andtheseeffectswillbepositiveoverhislifetime.Theother,however,walksoutofthatsameridefulloffearandshock,andthoseeffectswillbenegativeforhimoverhislifetime.Itwasthesameride,butitwasperceiveddifferentlybythem.Weallperceiveandinterpretourexperiencesinadifferentway.Whichbringsmetoanotherveryimportantpointthatyoushouldalwaysremember:itisnotwhathappenstousinlife,buthowweinterpretwhathappenstousandwhatwedecidetofocusonthatchangesourlife.Weneedtotakeresponsibilityforwhereweareinlife,feelgratefulforitandmoveon.Blamingoursituationorour“conditions”willonlybringmoreofthesame.Byfeelinggratefulforwhatyouhave,whateverthatmaybe,youareactuallyimpressingthoughtsofabundanceupontheUniverse,andtheUniversewilldelivertoyoumoreabundance.Itmaysoundstrangetosomepeople,butitisoneoftheimmutableLawsoftheUniverse,theLawofAttraction.FormoreinformationontheLawofAttraction,seetheResourcessection.Butlet’sgobacktoyourbeliefsandhowtheyaffectyourlife.Theyactuallyaffecteverythingyoudo,sinceallyouractionsaretheresultofyourbeliefs.Theyareextremelyimportanttoachievingsuccessinanythingyoudo.

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Yousee,fromthedaywearebornwearebombardedwithnegativesuggestions.Notknowinghowtocounterthem,weunconsciouslyacceptthemandbringthemintobeingasourexperience.Forexample,wearetold:-Youcannotdoit/Youcan’tdothat-ifyoudon’twearasweater,youwillcatchacold-Youdon’thaveachance-Thingsareonlygettingworse-Youmaygetfired-YouarenotsmartenoughAndsoon.Gettheidea?ConsidernowthefactthatrightnowinAmerica,thereareabout36millionpeoplethatare65yearsofageandolder.Outofthat36millionpeople,over34millionarebroke.Theyaredependingonsomeoneelseforlife’snecessities.Whyisitthatintherichestcountryintheworld,95%ofthepopulationendsupbroke?Ifyouaskthesepeople,theywouldtellyouthattheirliveswereshapedbyexteriorforcesorcircumstances,bythingsthathappenedtothem.Thisimpliesthattheywerenotincontrol,thattheyweremerelyaleafinthewind.Butaswesaidbefore,andit’ssoimportantthatitisworthrepeating,itisnotwhathappenstousinlife,buthowweinterpretwhathappenstousandwhatwedecidetofocusonthatchangesourlife.Aperson’sfortunecanbecompletelywipedout,andheorshecanbuilditagainwiththerightmindset.Ithashappenedmillionsoftimes,whichprovesthatitisNOTwhathappenstoyoubuthowyoureacttoit.Themainreasonthatmostpeopleneverachievefinancialindependenceisthatwearenottaughthowtosucceed.Wearenottaughthowtoachievefinancialindependence.Wearenottaughthowtohandlemoney.WearenevertaughtthatWEareinchargeofourlives.Theeducationalsysteminplacetodaywascreatedinthe1800’s,andwasdesignedtoprepareustoworkasemployees.Inhighschool,wearenottaughthowtohandlemoney,howtoinvestit,howtocreatepassivestreamsofincome.Wedon’tlearniteitherinCollegeorUniversity.Wegrowup(mostofus,anyway)believingthatmoneyisinshortsupply,ishardtocomebyandthatyouhavetoworkreallyhardforit.Wegrowupassociatingdifferentthingstomoneylike“IfIhavealotofmoney,Imaylosemyfriends,”thereby,“moneyequalsloneliness.”Othercommonbeliefsare“moneychangespeople,theybecomegreedy”,“IfImakealotofmoney,Icouldlosemymotivation”.Or,“IfI’mbroke(orpoor)peoplewillpaymoreattentiontome”.Andthelistgoesonandon.Thefactisthatmoneybyitselfisneithergoodorbad.Itiswhatweassociatetomoneythatmakesallthedifferenceintheworld.Letmegiveyouafewexamplesthataffectedmepersonally.

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IlivedmostofmylifeunderasetofbeliefsthatcontrolledmostofwhatIdid.Ittookmeawhiletoidentifythosebeliefs,butwhenIdid,Irealizedthattheyhadsuchanenormouspowerovermethattheycontrolledmyfocus,myideas,andmyacts.BeforeIwasawareofthesebeliefs,Iblamedmycircumstancesonotherpeopleor“badluck”.WhenIwasgrowingup,moneywasalwaystight.MyfatherlosthisjobwhenIwas8yearsold.Hecouldnevergetanotherjobthatpaidhimenough,sowewerealwaysshortofmoney.Myparentshadnochoicebuttotakemeoutofprivateschoolandsendmetopublicschool.Iremembermyparentssayingtome,“wearemiddleclass”,andasakid,Iaccepteditasifitwereafactthatwouldneverchange.Growingupinanenvironmentoflack,Ifeltthatmoneywasinshortsupply.Thatmoneyonlywenttootherpeoplericherthanme.Peoplesaidthat“moneycan’tbuyyouhappiness”,andIbelievedit.Ideeplybelievedthatbecauseofcircumstancesthatwerebeyondmycontrol,otherpeoplecouldhavemoney,butnotme.IbelievedIwas“middleclass”,period.Iwas“destined”tobethatway.Letmeaskyou,howdoyouthinklivingwiththesebeliefsaffectedmylifeasanadult?Howdiditaffectwhatwaspossibleorimpossibleforme?Ataconsciouslevel,IwantedtoearnalotofmoneysoIcouldlivecomfortably.Butdeepinsideme,(atasubconsciouslevel)IneverbelievedIcouldearngoodmoney.WhenIworkedasasalespersonmanyyearsago,Iwouldhaveagreatweek,andthenduringthenext3weeksIwouldsabotagemyownsuccess.Iwouldnotworkharduntilthemoneyranout.Thiswasdonesubconsciouslyofcourse;therewasalwaysa“reasonable”excusefornotworkinghard.IamverygratefultotheUniversefortheparentsIhaveandtheexperiencesIhad,sincetheypreparedmeforwhatIamtoday.Thetruthofthematteristhatallbeliefsthatwe“inherit”fromourparents,arebeliefsthatthey“inherited”fromtheirparents.SoInowchoosetobelievethingsthatwillinspireme,andIdonotreallycareiftheyarefactualtruthsornot;theywillbecometruthsonceIbelieveinthem.

Acoupleofexamplesofmynewbeliefsare:

-Iamasoulwithabody;mysoulisinfinitelyabundant

-Iamalwayssurroundedbyabundance.Abundanceisallthereis.

-Moneyalwayscomeseasilyandeffortlessly

-Iamwealth–Iamabundance–Iamhealth

Youhavebeliefsabouteverything.Andwhatisgreataboutidentifyingandchangingyourbeliefs,isthatyoucanchoosetobelieveanythingthatcanhelpyouachieveyourgoals.

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Youhavetolookforthoselimitingbeliefsthatarecontrollingyourlife.Ifyouarereadytobreakfreefromthechainsoflimitingbeliefs,Iwillguideyouthroughasimpleyetverypowerfulprocessthatwillenableyoutochangethosebeliefsforgood.Youcanliterallychangeanythingyouwant.Togetthebestresultsoutofthefollowingexercise,youwillneedaquietplaceandprivacy.Ifyouareindebt,youneedtoadoptnewbeliefsthatwillempoweryou.Youcandecidewhatyouwillchoosetobelieve,sowhynotfindbeliefsthatwillhelpyouachieveyourgoals?Beliefsthatlimityouractionscanbeasdevastatingaspositivebeliefscanbeempowering.Whenwefullybelievesomethingistrue,itislikedeliveringacommandtoourbrainastohowtorepresentwhatisoccurring.Inotherwords,theyare“filters”toourperceptionsoftheworld.Weneedtotakeresponsibilityforwhereweareinlife.Weneedtostopblamingothersforwhathappenstous,anddecidetomoveforward.

Afewgoodbeliefstohaveare:

1- Everythinghappensforagoodreason(evenif,rightnow,Icannotseewhatthatgoodreasonis)2- Peopleareinherentlygood3- Moneyiseasytocomeby4- TheUniverseisabundantandlimitless,andmoneyneverrunsout5- Evenbeforeaproblemoccurs,ithasalreadybeensolved.Thereisasolutiontoitsomewhere,

andIwillfindit.6- Iamwealth–Iamabundance–Iamhealth7- Iamaspiritwithabody;myspiritiseternallyabundantandwealthy8- Beingbrokeisonlytemporary.

Feelfreetocomeupwithanybeliefsthatwillempoweryou,inallareasofyourlife.Thereareseveralwaystochangebeliefsonpurpose.ThefollowingmethodistheoneIfoundtobethemosteffective.Itinvolvesassociatingalotofemotionalpaintotheoldbelief,andalotofemotionalpleasuretothenewbelief.Thisisaprocessyoudoonlyonceforthebelieftobereplacedwithanempoweringoneofyourchoice.Nowlet’sstarttheprocessofchangingouroldbeliefs.Letmewarnyouthough,thatjustreadingthisexercisewillnotchangeanythinginyourlife!YouDONEEDtocompletethisexercise.Believeme,itwillbefun,anditwillnottakelong.Andyoucandoitasmanytimesasyouwant,anytimeyoudiscoverabeliefthatisnotempoweringyou.Awaytoidentifyabeliefisthis:theyareusuallyfoundaftertheword“because”,onphrasesyouusuallysay.Asanexample,ifyouhearyourselfsayingsomethinglike,“Iwillalwaysbefat,becausemyfatherandmotherareoverweight,andIhavetheirgenes”.Anotherexample,“Theywouldn’tgivemethatjob,becauseIamnotsmartenough”.Or,“Icouldneversucceed,becauseIneversucceededbeforeinmylife”.Doyougettheidea?

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Let’sstartwithyourlimitingbeliefs.Writedown5beliefsthatyouhaveaboutyourselfandwhatyouarecapableof.Whatarefivebeliefsthathavelimitedyouinthepast?i.e.,“Icouldnevermakemorethan$50,000ayear”,“Ican’tgetabetterjob”,“nobodywouldpaymethatmuch”,etc.

1______________________________________________________

2______________________________________________________

3______________________________________________________

4______________________________________________________

5______________________________________________________

Nowyouwritedown5empoweringbeliefsthatcannowsupportyouinachievingyourgoals.Donotlimityourselfinyournewbeliefs.Thinkbig,thinkbold!Also,andthisisextremelyimportant,stateyourbeliefsintheaffirmative,neverstateabeliefthatnegateswhatyoudon’twant.Example:“Mylifeisabundant”isagreatexample,but“Idon’thaveanymoredebt”isnot,sinceitisnotpositiveenough,andyourbrainwillfocuson“debt”insteadofthe“Idon’t”.Thesenewbeliefswillreplacetheonesthathavelimitedyoubefore.

1______________________________________________________

2______________________________________________________

3______________________________________________________

4______________________________________________________

5______________________________________________________

Excellent!Feelgratefulfortakingthisfirststepthatcanchangeyourlifeforthebetter.Now,gettwopiecesofpaper.Onthefirstpieceofpaper,writedownthefirstlimitingbeliefyouareeliminating.Whatyouaregoingtodofirstiscreatedoubt.Onceyoustarttodoubtabelief,itbecomesweak,makingiteasiertoreplacewithanotherbelief.Then,youaregoingtoassociatemassivepaintohavingthatbelief,andmassivepaininthefutureifyoucontinuetohavethatbelief.Inotherwords,youhavetofeelthenegativeemotionsassociatedwithlivingwiththatbelief,andhowitwouldnegatively

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affectyou.Then,ontheotherpieceofpaper,youaregoingtoassociatemassivepleasuretothenewbeliefthatyouwanttoadoptinitsplace.Thisexerciseisextremelypowerful,soplease,doyourselfafavorandtakeitseriously.Youcanchangeyourlifenow.Let’sstartwiththefirstbelief.Youhavealreadywrittenthisbeliefdownonthefirstpieceofpaper;nowaskyourselfthefollowingquestions:

1-Howisthisbeliefridiculousorabsurd?

2-WhatnegativeconsequenceshaveyoualreadyexperiencedasaresultofhavingthisRIDICULOUSbelief?Whathasitcostyouemotionally,financially,physicallyandinyourrelationshipsinthepast,becauseofhavingthisABSURDbelief?

3-Whatisitcostingyounow,emotionally,financially,physicallyandinyourrelationships,becauseofhavingthisWRONGbelief?

4-Whatwillitcostyouemotionally,financially,physically,inyourrelationships,duringthenext10years,ifyoudon’tletgoofthisbeliefnow?

Writedowneverythingthatcomestoyourmind.Keepwritingaboutallthepainyouexperiencedinyourpast,allthepainyouareexperiencingrightnow,andallthepainyouwillbeexperiencinginthefutureifyoudon’tchangethisabsurdbeliefnow.Makesureyoufeelasmuchpainaspossible.Feelallthenegativeemotionsassociatedwithhavingthisabsurdbelief.Closeyoureyesandvisualizeit,liveit,feelitasifitwerehappeningrightnow.Iknowthisdoesn’tsoundveryappealing,butbelieveme,youwillbeamazedattheresults!Onceyouarefullyassociatedwiththepainthathavingthisbeliefhascostyouandwouldhavecostyouyourwholelife,getthesecondpieceofpaper,andwritedownthenewempoweringbeliefthatwilltaketheplaceoftheoldone.Askyourselfthefollowingquestions:

1- Howwillhavingthisempoweringbeliefaffectmylife?

2- WhatbenefitswillIgetfromhavingthisempoweringbelief?

3- HowwillIfeelandhowwillIactbyhavingthisempoweringbelief?

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4- WherewillIbein10yearsasaresultofhavingthisempoweringbelief?

5- Imagineyourself10yearsfromnow,andlookingbackatthelast10years,howdoesitfeelhavinglivedwiththisempoweringbelief?Staythereforawhile,feelingthosegreatfeelings.

Whileyouarewritingdowneachanswer,makesureyoufullyassociatewiththepositivefeelingsofhavingthisempoweringbelief.Feelhowmuchbetteryourlifeisasaresultofhavingthisbelief.Closeyoureyesandfeelitinyourbody.Howwouldyoufeel?Howwouldyoumove?Howwouldyoubreathe?

Thekeyhereistoexperienceasmuchpleasureaspossible.Nowgrabthefirstpieceofpapercontainingyouroldbeliefs,andburnit.Asyouseethepaperburning,feeltheoldbeliefvanishinginyourpast,andfeelthepowerofyournewbelief.Congratulations!Feelgratefulforhavingagreat,empoweringbeliefthatwillsupportyoufortherestofyourlife.Dothesamewiththenextbelief,andkeeprepeatinguntilyoufinishreplacingallyouroldbeliefs.ThisexercisewasadaptedfromsimilarexercisesbyAnthonyRobbinsandBobProctor.

AnotherwaytoreplacelimitingbeliefsIrecentlyfoundanotherwaytochangebeliefsandcounternegativesuggestionsthatIuseveryfrequently.ItisincrediblypowerfulanditalsohelpsmetokeepfocusedonwhatIwant.

EventhoughIusedaffirmationsinthepast,theyneverseemedtoworkforme.ThroughouttheyearsIheardabouthowimportantitwastorepeattoyourselfthe“right”affirmations,andsinceInevernoticedanybenefitsIquitdoingit.

Butitwasn’tuntilIwatchedthemovie“Youcanhealyourlife”byLouisHayesthatIfinally“gotit”.Inthemovie,apersonwhogotcuredofcancerexplainedthatshewasrepeatinganaffirmation400timesaday.Fourhundredtimesaday!That’swhyitworkedforher;hersubconsciousmindendedupbelievingwhatshewasaffirming.ItneverworkedformebecauseIwouldrepeatmyaffirmationsonlyafewtimesaday(nowonder,right?)

SoonedayIfoundacheapMardiGrasbeadnecklacethatwasgiventomeatapartyandIthoughttomyself:“ThiswouldbegreattousewhileIpracticemyaffirmations”.Ithas88beads,soIwouldrepeatoneaffirmationoutloudabout100timeswhileIwasgoingthroughthenecklaceonmywaytoworkeverymorning,withemotionandfeelingitasifitwasalreadyreal.Then,onmywaybackhome,Iwouldrepeattheprocess.Itwasatotalofabout200affirmationsaday,butIwantedtofindawaytodoublethat.

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SowhatIdidwastoshortentheaffirmationswithoutmodifyingtheirmeaning,andalsotowritethemdownwheneverIcould.Theirbenefitswereincredible!Ittookaboutthreeweekstostartseeingthebenefits,butthenIgothooked.Iwoulddooneaffirmationforatleastthreeweeksbeforemovingontothenextone.

ThebestwayIfoundistostarttheaffirmationswith“I’msohappyandgratefulnowthat…”andfillintheblankswithwhateveryouwanttoachieveorget.Someexamplescouldbe:

“I’msohappyandgratefulnowthatI’mdrivingmy….(name/modelofcaryouwant)”

“I’msohappyandgratefulnowthatIgetupat5:00AMfullyenergized”

“I’msohappyandgratefulnowthatIweigh175lbs(orwhateveryouwant)

“I’msohappyandgratefulnowthatmyChaseMasterCardisfullypaidoff”

“I’msohappyandgratefulnowthatmoneycomeseasilyandfrequently”

Writedownalistofaffirmationsandpickonetostartwith.Repeatyouraffirmationoutloud,200to400timesaday.It’sOktotrydifferenttonesofvoicesinceyouwillprobablygettiredafterawhile.Ifoundthatitworkstentimesbettertosaythemoutloudthaninyourhead,sosaythemoutloudasmanytimesaspossible.

Howtouseaffirmationseffectively

Inhisbook,“Thespiritualbasisofrealprosperity”,RoyEugeneDavissaysaboutaffirmations:

“Mechanicalrepetitionofaffirmationsisawasteoftime.Speakwithdeliberate,soul-feltconvictionuntilsuperconsciousawarenessoftherealityofthatwhichisaffirmedisclearandunwavering”.Inotherwords,livetheaffirmationasifitweretrue,withdeepemotionandconviction(excellentbooktoreadbytheway).

Atthebeginningitwillprobablyfeelweirdandyourbrainmaygo:“liar,youknowthisisnottrue!”butkeepgoing.Afterawhile,yoursubconsciousmindwillstartacceptingit.Andonceyoursubconsciousmindbelievesit,yourlifewillstarttochange.

Changingyourmindset

Rememberwhatthedefinitionofinsanityis?Doingthesamethingoverandoverandexpectingadifferentresult.Ifyouwantthingstochange,YOUhavetochangefirst.Youcanbeincontrolofyourlifebychoosingwhattofocusonmostofthetime.Successfulpeoplechoosetofocusonpositivethings;unsuccessfulpeoplefocusonnegativethingsbydefault.

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Sodowhatsuccessfulpeopledo:

• Spendmostofyourtimefocusingonpositivethings,NOTonnegativethings.

• Focusonwhatyouwanttoachieve,NOTonwhatyoudonotwanttoachieve.

• Focusonwhatyoulike,NOTonwhatyoudon’tlike.

BeforeIlearnedthislessonIwouldcurseeveryfaultofthecarIownedatthetime.ThemoreIfocusedonit,themoremiserableIfelt.WhenIlearnedtobethankfulforthecar,IchangedmymindsetandIfeltbetter.Iamnotsayingtoignoreyourproblems.Acknowledgeyourproblems,butdon’tdwellonthem.Bethankfulfortheproblemsince,mostlikely,itisanopportunityindisguise.Youcanfindthegreatestopportunitiesofyourlife“hidden”inyourworstmoments.That’swhyallsuccessfulpeopleseeproblemsasopportunities.ThebestadviceIcangiveyouistoreframeevery“difficulty”.Thatmeansthatyoufindthegoodinaseemingly“bad”situation.Alwaysfocusonabundance,notlackorproblems.Focusonwealthbuilding,notsurviving.Focusonyournextcheck,notyourlastone.Whenyoufindyourselfthinkingaboutthenegativeaspectsofyourlife,immediatelyreplacethenegativethoughtswithapositiveone,likeamantra.Ifyoucatchyourselfsaying,“Ican’taffordit,”immediatelysay“Icouldn’tafforditinthepast,butIcanafforditnow.Ijustchoosenottobuyitatthistime,”orsomethingsimilar.Youdon’thavetobelieveityet.Youcan“fakeit‘tilyoumakeit.”Feelabundanceinyourlifeandbegratefulforyourabundance.Whatyoufocusonexpands.Ifyoufocusonlack,itexpands.Whenyoufocusonabundance,itexpandsaswell.Remember,abundanceisn’tjustaboutmoney.Youmayhaveanabundanceoffriends,health,faithorideas.Lookatnature.Everywhereyouturnthereisabundance.Life,byitsverynature,isabundant.Justopenyoureyes;openyourmind.Ofcoursethisiseasiersaidthandone,sohowtostart?Thereareseveralthingsyoucandorightaway:

1- Startmeditatingeveryday.Evenifyoudon’tknowhowtomeditate,atleastfindaquietspot,sitcomfortably,closeyoureyes,andbreathedeeply.Focusonyourbreathing.Staylikethisforafewminutes,andavoidanythoughts;justfocusonyourbreathing.Thenvisualizeagoalyouwanttoachieve,andfeelasifyouhavealreadyachievedit.FEELwhatitfeelsliketohave

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achievedthatgoal.Makeitasrealaspossible.Touchit,feelit,smellit,seeit.Stayinthatfeelingforafewminutes,andthanktheUniverseforhavingachievedit.Thisisprobablythemostpowerfulexerciseyoucandotobecomesuccessful.

2- Readpositivebooks,everysingleday.Atleastreadfor15minutes,preferablyfor30minutesormore.Ialwaysreadbeforegoingtobed,soIcangotosleepwithpositivethoughtsandfeelings.

3- ListentopositiveCDsinyourcarinsteadofmusic(orwhat’sworse,thenews!)

4- Avoidthenews,negativepeople,negativemovies,negativetalkshowsandanythingthatwillaffectyounegatively.Feedyourmindwithpositivethingseveryday.

5- Feelgenuinelygratefulforwhatyouhave.FEELdeepfeelingsofgratitude.Thisisincrediblypowerful,sodonottakeitlightly.Feelgratefulforanythingyouhave,yourcar(evenifyoudon’tlikeit,stillfeelgratefulforhavingit),yourkids,yourspouse,aflower,etc.Feelgratefuleveryday.Writedownalistofthingsyouaregratefulfor,andasyouarewriting,feelthegratitude.Doitfor5-10minuteseveryday.Makesurethatassoonasyouwakeup,youthinkaboutthingstobegratefulfor.It’sthebestwaytostartyourday!

6- Surroundyourselfwithpositivepeoplethatinspireyou.Thisisveryimportant!Onewaycouldbetostartamastermindgroup,whereallofyoucanshareideasandsupporteachother.Youcaneithermeetatsomebody’shouseonceaweekoratarestaurant.Youcanevendoaconferencecallonceaweekifsomeofyouliveindifferentcities.Youcanalsofindamentorthatcanhelpyoustayfocusedornewfriendsthatsharethesamegoals.

7- Feeltheabundancethatsurroundsyou.Evenifatthismomentyoudon’thavethemoneyyouwant,youcanfindabundanceifyoulookforit.Abundanceisnotjustmoney;abundanceiseverywhere.Maybeyouhaveanabundanceoflove?Oranabundanceoffriends?LookforabundanceinNature.Lookattheocean,youwillseeabundance.Lookattrees,youwillseeabundance.JustFEELabundanceinsteadoflack,andyouwillattractit.

8- Takeworkshopswhenpossible,takeclassesifyoucan.FindanAdultSchool.Theirclassesarefree.

Youcanmakeyourlifeamasterpiece.Justfocusonit,everyday.Andalways,ALWAYS,begratefulforwhatyouhave.

ThereisNOTHINGthatyoucannotbe,do,orhave.Youareamagnificenthumanbeingwithunlimitedpotential.Donotsettleformediocrity,youdeservemore!

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Part5

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