How to get rid of debt? You want to get rid of debt??

Yes, this is the question...do you want to get rid of debt? My answer is yes AND no!

First answer, YES, you should get rid of bad debt, so that you don't owe anybody money, and save on interest.

We know interest will keep compiling the moment you owe money to banks, companies, or even friends (who wants to charge interest on you!).
What do we do to get rid of debt? 
Cut your credit cards? Learn to be stingy? Run away from the country? Hmmm, none of these...

All we need to learn is to manage your credit cards, and I have a post just to talk about this
http://wealthstreetjournal.blogspot.com/2010/12/how-to-use-your-credit-card.html

And start budgeting yourself. I should ask you, at the moment what do you own? A car loan, and some personal loan for business purposes? Ok, regardless of what you have, always make sure that you have enough balance to pay back these debt each month. If you can't manage to pay back, then don't even borrow it in the first place!!


My second answer, NO we don't get rid of good debt. What is good debt?
Some of you may have borrowed money to finance on your mortgage or property loan. Well, these are assets, not liabilities...As year goes by, inflation rate will increase, and it will help to increase the value of your property.

1. Therefore if you purchase a house at $100,000
2. After paying deposit of $20,000; you need to borrow additional $80,000 for 20 years 
3. Assuming next 20 years it appreciates to $180,000.
4. Plus minus interest of loan, you could reap a $40,000+ nett if you sell it after 20 years.

Now this is a good debt, you borrowed the money to create more value to you in the future.
And bad debt? Bad debt is those money you borrowed that's gonna drag you further to poverty. Bad credit card management is one great example.

Do you think having $1 million dollar can be rich & financially free?

I just happened to have this idea of measuring $1 million dollar the other day.

Okay, you heard it from direct sales meeting, seminars, and books about achieving monetary goals:

“Yes, you can become a millionaire!”

” It’s time to earn your first million!”

“You can be financially free!”

If having $1 million dollar today is rich, then in the early 1940s having $1 million dollar is extremely rich!

This is because value of our current money will reduce every year, caused by our ‘generous’ inflation. 

Inflation rate goes up over the years, and average inflation hike rate is normally 3.5%.

Simply take this example of a cup of coffee. One cup today cost us $2, in the next 20 years one cup may cost us $4.

Therefore do you think you will be financially free, having $1 million dollar next 30 years? I doubt so.

If you are in your mid 30s, you will need money to start up a family, buy a house perhaps, taking care of parents and apart from all that you want to be financially free…How does $1 million dollar be enough??

A single family home in 1934 cost you $7,000;

In 1960 it will cost you $82,200;

In 1995 it will cost you $272,000;

Almost every 30 years the figure jump by a digit.

 So another 30 years, year 2025, how much will a single family home cost you?? I let you calculate the figure.

Here is the chart of an employee earning fixed monthly salary for living:-

When he first started, his income is still above inflation rate, he is fine. In the years to come, if he still gets the same salary, inflation will catch up with his rate. While still earning the same salary, he will become poor before knowing why!

$1 million dollar is not enough for years to come, so what should we do??

This is the chart we should be having:

You need to earn extra income that is beyond fixed salary through investment. You need to cope with the inflation rate, if the inflation rate goes up 3.5% every year, your investment interest should be compounding more than 3.5% every year. Then you make real money!

Tips for stocks that make you rich!

Here's what I have encountered in real-life.

Adam was an average middle-aged man, he is just like other common people wanted to earn extra money for his family and to live better... And one fine day he caught his eye on a half-paged ad on newspaper with big header, 

"Free 1-hour seminar to learn how to pick a profiting stock".  

Without hesitation he grabbed his cellphone and registered for a seat. 

Eventually the day arrived and he was in the seminar, comfortably seated. After listening to an hour's speech, speaker requested the audience to open up any questions. Adam raised his hand, the only question he asked was, "Tell me which stock should I buy to earn money?".  

Speaker replied, "Now if you want me to tell you what to buy, you are wasting your time attending my seminar. Similarly, if I know how to cook well, I won't let you eat my food, instead I will teach you how to cook like ME."

*******************

I can't agree more with the speaker. Adam was practically asking a dumb question, forgive me for being sarcastic. But this is a real experience, people are always impatient to earn fast money.

Let me put this straight, so what if they get the tips to buy stock ABC? Eventually when they run out money, they ask for new tips again? Then again? Then another time??
How long can Lady Luck continue on?

Wealthy people are always willing to learn. They are enthusiastic about the tools and ways to earn money. They don't take shortcuts. Even a robber will plan before robbing a bank!

Though I am not an expert, AND I also know that some people earn more than me buying stock through tips. But I always have that in mind thinking that it won't last too long. Even long, it won't make them wealthy enough for the years to come.

My post title attracted some readers, most people will! Because fast money is always been perceived to be good money.  But they are not good! They are short-term satisfaction. So please do not to be like them, you can start to make some changes. Learn to earn money, that is for the better future. Tips is for very average people, you are not one of them.