Having a life full of debt is not normal. You should instill that in your everyday affairs. However, since you live in an era that encourages excessive dependence on others as well as unnecessary purchase and consumption of goods, you can’t help but spend more than what you can actually afford.
Many people plan to retire wealthy but the habit of spending beyond their means has allowed them to be consumed by debt instead. If you are one of those swimming in the sea of debts, this is the right time for you to eliminate them one by one and begin transforming debt into wealth. While this is not an easy process and is certainly not fun, a life without credit card and debt is possible.
Before anything else, you should have at least $1,000 cash in hand in case of emergency. Make sure that you can access the $1,000 fund anytime you need it. To transform debt into wealth, you must sell used books online, have yard sales and eliminate the valuable things that you don’t need, you can even bring your old CDs to a used record shop. Once you’ve collected the amount, keep it and never spend it until necessary. It should not be used up for a luxury out of time vacation or for impulse shopping. This will help you avoid looking for a lender when your car needs repairs or the water heater in your house malfunctions.
Fixing Debts
While one of your priorities is to have the best investment that generates the highest rate of return through your IRA or 401k plan, when faced with debt, one of the most efficient debt settlement solutions is to reduce your contribution to your retirement account. This will provide you additional money to pay your debts while ensuring that your retirement plan stays active.
Though some recommend that you start paying the largest debt, it would be more beneficial to pay off the smallest debt first. This will grant you a sense of fulfillment to recompense all of your debts.
When dealing with several credit card debts that make you feel powerless in resolving, you can take a debit consolidation loan into consideration. This financial assistance option will merge all of your debts and other loans into one loan, so you can take necessary steps to compensate all of them through a more systematic payment schedule for your convenience.
If you don’t have adequate amount of money to contribute to a retirement account, pay your debt, and keep your standard way of living, you should find a second job, sell an extra property, or open a small online business. You’ll soon realize that there is nothing more satisfying than living a debt-free life.
Debt Settlement and Wealth Building Assistance
You can look at transforming debt into wealth system that some companies offer. They provide comprehensive steps and guidelines that you can work on to successfully reduce your debts, if not totally eradicate them. You will also get to know the proficient ways to build your nest egg accordingly in preparation for your retirement.
However, you should also become aware of transforming debt into wealth scam that preys on unsuspecting debtors that look for financial assistance. These schemes instead of helping will consume your last resources so they can generate money for themselves.
Moving On
Once your debts are completely gone, you can then build your wealth. By this time, you can freely allocate about 15 percent of your monthly wage to your retirement fund. Take advantage of your company’s 401(k), 403(b), SEPP or pension plan and place money in it as much as you can.
If you’re looking for diversification, you can open a Roth IRA. A safe and relatively easy way to diversify your portfolio is to designate 25 percent in small cap mutual funds, 25 percent in mid cap mutual funds, 25 percent in large cap mutual funds, and 25 percent in international mutual funds. By implementing this strategy, you are guaranteed that 15 percent of your salary is absolutely tax free.
Final Note
It appears that transforming debt into wealth is not as complicated as you deem it. Note however, that the success of any venture and goal that you have lies in your ability to work against any adversity and find solution in any problem that you get involved with.
