What Wealthy People Do

Benefits of Buying a Car in Cash

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What buying a car in cash does over someone who enslaves themselves to a care note:

1. Affordability: It forces you to ONLY buy what you can afford. Remember, the term “I can afford it” does not mean you can afford the car payment that month. It means that you have the cash in the bank to make the purchase without owing anyone. Otherwise you can’t afford s#%$. You’re just gambling with how long you can make it without a major emergency happening.

2. Discounts: It puts you in place to be highly likely to receive a sizable discount on the overall price of the car. Lenders want to move VOLUME. Making $3k on 5 cars beats $5k on 2 in most businesses across the globe. Your greedy local car dealership is no different. Whipping out cash and buying a car at the end of a sales month will 9 times out of 10 allow you to get the dealer to cover your tax, title and registration.

3. Car insurance: It allows you the CHOICE to pay less in insurance! (Banks and car lease finance companies dictate your insurance coverage)

4. Late fees: The goal for wealthy people is not to be able to make payments on their bills on time. The goal is to have as few as possible in the first place. By reducing the number of payments that go out each month (from canceling cable bills to combining monthly cel phone plans to eliminating credit card payments regardless if you pay in full) you are substantially reducing your potential to pay late fees.

5. No more car than you really want or need: It forces you to think smarter about your purchase! Numerous published studies show that when you spend your own hard earned money you choose better, more reliable, longer lasting products (read: honda, toyota, nissan). When you give a 25 year old a $25k loan they come home with a Giraffe with a motor in its butt.

6. Cha ching! It puts you on path for wealth! If you were to simply reduce your auto expenses by $400 per month and instead you invested that amount over the typical timeframe someone pays a mortgage (30 years), you are $818,435.52 wealthier than the person who doesn’t.

Shout out to driving cars in hopes of impressing people who you’ll be asking to borrow money from in a few years.

Very impressive your plan is my friend.

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New Slaves

My momma was raised in the era when…

Clean water was only served to the fairer skin..

My parents were focused on civil rights in their era which is understandable. But now, its up to us to awake from being “new slaves”. We have to fight tp stop this cycle of poverty once and for all.

Understand that the *cycle* is the target. Not poverty itself.

Because right now just being born black pretty much guarantees you a life of struggling.That damn-near guarantee is what we’re fighting to tear down.

Some enjoy government handouts, payday loan interest and cash advances. And that is your prerogative to stay in bondage. The rest of us who desire to wake from the Matrix through our own choice will struggle to do so initially, yes, and then prosper for eternity.

A revolution does not require 100% participation.

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You have a low Credit Score? Probably the best thing that’s ever happened to you.

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The last time I knew my credit score, in 2007, I was nearly $550k in credit card , student loan and mortgage debt.

I had a 735 consumer Fico score (remember there are multiple scores- consumer score, auto loan score, mortgage score etc).

I was broke, in debt, had no investments and was tied to my job for survival.

As of 2013, I have no idea what my credit score is as I have not been stupid enough to pay some company or apply for some loan so I could find out.

I have lived for 6 years without once needing a credit score, a loan or any other type of societal bondage.

After renting numerous cars, applying for, being approved and deciding not to rent multiple apartments, being hired to work at the top companies in two separate industries (banking/finance and advertising), after starting two businesses, owning multiple investment accounts, having cel and 4g plans at the most credit sensitive companies ( At&t, verizon) having possibly the worlds most fully covered auto insurance policies at amazingly low rates…I have prospered financially far beyond any other point in my 32 year history.

The Dow Jones has hit an all time high. I have the ability to purchase two of the condos I got rid of 100% in cash. I do only what I desire to do each day.

Basically, I have never seen more money in my life.

And guess why.

BECAUSE I NO LONGER BORROW MONEY I DON’T HAVE TO PAY FOR SH#% I DON’T NEED.

…I, along with the top tier of the over 1800 minorities I work with have lived life better than most around us, accomplished more than most around us and have given back to the community more than those around us.

Yet you “gotta raise your credit score”.

Now remind me how thats been working out for you, champ?

How I Was Able to Walk Away from the Credit Game

I went through a TON of starts and stops with debt freedom -all the way up until the point where I got completely fed up once and for all.

Once I did get fed up, to get to the decision of not only getting out of debt but staying out of debt, I found myself stuck at a decision on what to do with my credit cards. Contemplating whether I should keep my newly paid off credit cards open, I simply asked myself “is it worth it”?

The possibility of a relapse?

The probability of a war with the credit card company over an unwarranted late fee? The wasted years of my life thinking I could outsmart a half a trillion dollar financial industry at their own game? The high possibility of finding myself in bankruptcy down the road?

And at that point I figured out what risk vs reward was. A very simple ratio/way of looking at things that can provide you more wealth that you can ever imagine.

See, myself along with all of my”reward point” friends were missing the fundamental concept at play here which chronically kept them from being wealthy.

The question has never been “what if I pay my credit cards off each month”.

The question is “what if I DON’T?”

There is no credit card feature ever created in the history of the credit card industry that has ever outweighed the potential negative effects of carrying that credit card. As of now, the $200 in “spending cash back rewards” I’m forfeiting each year has turned into over $161k in 4 years from not paying the interest on the things I was paying on before I made that commitment.

Credit cards are just the gateway drug for more advanced borrowing. How many times have you heard someone say that you have to raise your credit score by placing credit cards on your report and not closing them?

So yes, I stopped cold turkey from the following:

#1 being fed up/unwilling to live life in debt any longer and

#2 weighing what could happen negatively vs what few positives there may be to keep playing the credit game.

But if I had never figured out what a real risk reward ratio was, I would still be selling myself on the “what ifs”, the “credit card emergency fund” propaganda, the “this debt is good debt” mentality that I was accustomed to.

Its.not.worth.it.

Trust me.

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Need a Debt Coach? The Debt Movement is Here to Help

Need a Debt Coach? The Debt Movement is Here to Help

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Think about this…..

Michael Jordan, one of the great basketball players of all time, had a coach.

Sir Richard Branson, one of the greatest entrepreneurs of all time, has several business and life coaches.

 

Two years ago I even hired a business coach to help improve my business and way of life.

Having a coach is invaluable to help you achieve your goals, desires, and a better way of life.

Most people don’t hire coaches, because they are afraid of the cost. That was something that I fought for a long time. Something my wife still does. Ha ha… :)

 

2 years later I don’t look at my coaching program as “cost” or an “expense”. I now view it as an investment as it’s changed my life in so many ways- business wise, family wise and spiritually wise.

 

In fact, I know that I never would have been able to start The Debt Movement had it not been for my coaching program.

Why Coaching?

Okay, you’re probably wondering what this has to do with you, right?   Watch the video below to find out.

Just in case you don’t have the patience to watch the video (or you’re at work) here’s what I have lined up for you……

Debt Coaches

I’ve lined up 5 (the video says 4 but I just got one more to commit -yeah!) Debt Coaches who have volunteered their time and expertise to help 5 lucky individuals (households) get out of debt.

Once again – it’s free!!!

How Does it Work?

If you are interested, here’s what you need to do:
  1. Apply -  Yes, you need to fill out an application.   We want to make sure that we only consider applicants that are highly motivated to get out of debt.    Click here to apply for a Debt Coach.
  2. Be Willing to Share.   The lucky ones selected will be asked to open up and share their journey with the entire Debt Movement community.  The Debt Coaches will also be sharing their recommendations on the blog.  My goal here is that others that are in a similar situation will benefit by joining you in your debt payoff journey.

That’s it!    I hope you’re excited as I am about this.

Click here to apply and see the original debt movement post.

 

How to buy “a” house without using credit. Specifically.

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The key in purchasing “a” house without credit is understanding what “a” house actually is. Many people will say they can’t afford a house in cash and they’ll use that statement to mask the fact that they’ve never even sat down and tried to figure it out.

“A” house can mean anything. Its self – defeating. It subtly regurgitates the broke frame of mind regarding staying in debt that so many people around us fall victim to. It also lets the person you’re asking the question to (How will I ever buy a house without debt?) know that any answer you give them will never get past their wall of complacency and state of constantly wishing for something easy. Those that truly want to be different from those around them, no longer tied to their jobs and no longer stressed about money will ask about specific houses. These people search for answers they don’t know and not answers they do know. Think about it.

So lets talk about specific houses for a second.

1. How to buy a $64k house in Ohio:

  • Annual household income (combined): $21,333
  • Take home monthly income after taxes: $1450
  • Amount saved and invested per month to purchase property: $500
  • Duration: 7.2 years
  • Amount saved from not paying a mortgage: $62,893

2. How to buy a $135k house in Atlanta:

  • Annual household income (combined): $45,000
  • Take home monthly income after taxes: $2,812
  • Amount saved and invested per month to purchase property: $1,000
  • Duration: 7.5 years
  • Amount saved from not paying a mortgage: $178,967.50

3. How to buy a $229k house in Long Beach:

  • Annual household income (combined): $76,333
  • Take home monthly income after taxes: $4,770
  • Amount saved and invested per month to purchase property: $1,700
  • Duration: 7.5 years
  • Amount saved from not paying a mortgage: $271,532.50

4. How to buy a $285k house in Carson:

  • Annual household income (combined): $95,000
  • Take home monthly income after taxes: $5,937.50
  • Amount saved and invested per month to purchase property: $2,100
  • Duration: 7.5 years
  • Amount saved from not paying a mortgage: $327,275

5. How to buy a $310k house in LA:

  • Annual household income (combined): $103,333
  • Take home monthly income after taxes: $6,458.33
  • Amount saved and invested per month to purchase property: $2,300
  • Duration: 7.5 years
  • Amount saved from not paying a mortgage: $352,695

6. How to buy a $500k house in LA:

  • Annual household income (combined): $167k
  • Take home monthly income after taxes: $10,417
  • Amount saved and invested per month to purchase property: $4,000
  • Duration: 7 years
  • Amount saved from not paying a mortgage: $524, 465.10

7. How to buy a $500k duplex in L.A.

  • Annual household income (combined): $167k
  • Take home monthly income after taxes: $10,417
  • Amount saved and invested per month to purchase property: $4,000
  • Duration: 7 years
  • Amount saved from not paying a mortgage: $524, 465.10

So as you can see, there are a variety of housing/budgeting situations you can find yourself in depending on WHAT house you’re looking at. And the key to making them work is to have the appropriate income needed to take out a mortgage for that type of house in the first place. The general rule for being able to comfortably take out a mortgage is to have no consumer debt and have an income of 1/3rd the overall price of the house/amount of the mortgage.

But back to staying debt free.

It takes 7-8years max to buy a $310k house in cash folks and we’ve been telling you this since 2009. Noone needs to throw away 22 years of compound interest you could invest allowing you to never have to work again simply because you had to rush into a 30 year mortgage payment.

And this is even more likely to happen if you’re following our plan with your significant other and can maximize that very powerful “dual income” you both have.

For anyone swearing that what I’m instructing you to do is impossible, you need to know that if you make the income it takes to qualify for a $310k mortgage then you and your spouse can save and invest the $2300/month necessary to do this. But if you don’t make the amount to qualify for that mortgage

why are you in my face about this again?

Shout out to single moms making $35k trying to buy houses in Ladera. You are a rockstar.

This is not the housing bubble years folks, that was a one time event that blew the entire country up due to unrestricted borrowing. Stop chasing after one off events that banks wont even have the capacity to allow to happen again – LEGALLY.

Property values have doubled since 1998 (15 years ago). The typical timeframe for a house to double in value is 30 years.

Now ask yourself, have average incomes doubled since 1998? Where is the demand going to come from?

A little econ never hurt anyone trying to grasp the bigger picture.  I highly recommend opening a book.

You.Have.Time.

Don’t rush into anything you don’t need to and don’t do anything stupid.

(to learn about what you should consider if you feel you must take out a mortgage, click here.)

Join the Debt Movement

Join the Debt Movement

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We’re paying down $10 million of debt, together.

Join ReadyForZero , hundreds of financial bloggers, and thousands of real people as we pay down a mountain of debt.

Through scholarships, education, community, and hard work, we’re putting a huge dent in the pile of consumer debt in America.

*Commit to a plan, win a scholarship

We’re gathering thousands of people to commit to a pledge to pay down as much debt as they can, between January 1st and April 30 2013.

Our generous sponsors are awarding scholarships to Debt Movement members with over $15k currently raised!

Learn more about the Debt Scholarships here. http://debtmovement.com/debt-scholarships/

*Get educated and give back

Our network of expert finance bloggers, companies, and participants will discuss new ways to better our finances. Ask questions, post your own answers, and join the conversation here: http://debtmovement.com/forums/

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