Michael Emilio

Let’s face it: There’s almost no way to realistically pay off all of your debts by consistently just paying the minimum monthly payments.

However, if we can pay the minimum monthly payment on all of our debts and also add some extra money to help pay them off, we’re going to see results.

Here’s a proven debt reduction plan that’s going to give you results if you consistently place it into action. It does require some discipline but you’ll see that the positive momentum from the way you’ll be reducing debt will give you fantastic results.

First step you’re going to want to do is to take a detailed look at all of your debt and add up the minimum monthly payments together. You need to know where you’re at right now in terms of debt. Yes, it can be scary to find out exactly how much money you’re spending monthly on just your debt. But you need to have this information in order to get a firm grasp of the immensity of your financial challenge. Notice the word I used; challenge. You have to think of this like a competition: you vs your creditors. Are you going to let this debt take over your life? Or are you ready to implement a debt elimination plan that’s going to reduce and eventually eliminate your debt from your life? If you’re ready to take this step, even if it means some sacrifices in the short-term, then get ready to look forward to a life in the future with financial freedom.

My debt elimination system is followed by adding 10% of your monthly gross income to the minimum monthly payments you make to creditors.

For example, let’s say you make a monthly gross income of $5,000 and you make a monthly minimum payment of $2,000. By using this system of adding 10% of your gross monthly income, you will now pay $2,500 total ($2,000 minimum + 10% of $5,000 which is $500).

One of the most important points to take away from this is that you don’t want to just add this 10% to the whole minimum payment you have to make per month. You want to strategize this by using this 10% ($500 in our example) on the debt that you can get rid of the fastest. This has a psychological benefit - you develop positive momentum of reducing your debt, you feel good about one less debt on your back, and you see results fast. Quick results mean you’re going to much more likely to stick with this quick debt-reduction strategy.

This 10% is a magical number. This 10% is your financial bodyguard. Just like how multi-billionaires and celebrities have a bodyguard, you now have a financial bodyguard working hard to fight off your creditors. This 10% will not stop until it gets the job done, which is eliminating your debt. As long as you keep feeding that 10%, you will destroy your debt - utterly and completely.

Yes, when I say gross income I do mean gross income and not net income. You might ask what’s the exact difference between gross income and net income. Gross income is what your total personal income is before taking taxes or deductions into account and net income is your total personal income after deductions, credits and taxes are factored in.

This next option is only for dire financial cases. If you absolutely cannot pay 10% of your gross monthly income to your debt payments, then at the very least devote 10% of the total of your minimum payments to pay off your debts. So, in our example, you would pay the $2,000 minimum monthly payment plus an extra $200 (10% of $2,000). This is only for a short-term period until you get your finances in check. As soon as possible, switch over to the 10% of your gross income debt payment plan we outlined earlier in this article.

Like any battle, you need to have a plan in place to attack the enemy. In this case, we’re taking the offensive on debt. You can’t just keep paying the minimum monthly payments on your debt and expect them to magically vanish or hope that you somehow hit the lottery. You have to take action. I’ve given you a plan to attack your debt directly. It’s up to you to work the plan.

Try my debt reduction plan and let me know how it works for you!

When investing in real estate, whether you’re looking into residential investing or commercial investing, many times properties listed on the MLS (Multiple Listing Service) may not be ideal for you. Don’t get me wrong, you can find some great deals on there. But there’s going to be times you want something very exclusive. Maybe you’re looking into investing in luxury properties, which often don’t show up on the MLS due to privacy concerns. Or maybe you want to invest in commercial real estate which may not be listed because the owner doesn’t want customers to know he’s selling the business. This is why you need to have a top real estate agent on your team to get you those deals hot off the MLS - sometimes even before they appear.

One of the snags of properties that are listed on the MLS - especially recently listed properties - is overly-inflated listing prices. When a seller is listing their property, the property owner is going to call multiple real estate agents and interview them. The agents will then visit the property that the owner is looking to sell and give the seller a round-about market value price that the property may sell for. Most agents are honest and will give a true market value on the home. There’s always going to be those agents that will quote a higher than market value price just to get the listing. When the seller hears this inflated price they may list with this agent with images of dollar bills dancing in their mind’s eye.

If you’re selling your home, be aware that these agents quoting a higher than market value price for your home are hoping that your property can sell for that price out of sheer luck or they hope to eventually bring your listing price down eventually. This is why if you’re a seller, do not get distracted with dreams that your property will sell for much higher than market price. Obviously, not all real estate agents are built equal - some agents have better negotiation skills and some agents have better marketing skills. These skills will likely bring you a higher price. But if three agents have told you the value of your property is $200,000 and one agent comes by and says he can sell it for $400,000, think twice before listing with that agent.

In order to beat the real estate system as a buyer, you need to establish relationships that net you the most exclusive investing opportunities possible. You need to have a real estate agent on your team and keep this agent interested in continuing in doing business with you on a long-term basis. This gives you massive opportunities for incredible real estate investing deals.

Once you’ve established these relationships with real estate insiders, you’ll be getting a fair share of investment opportunities. A key point is that when you find yourself with a prime investment property on your lap, don’t just sit by, “run the numbers” a million times, and let time pass. If you see a great deal, close it. If it’s that great of a deal, you may not even want to negotiate or bargain with the owner, just lock the deal up with great terms (no contingencies) and offer list value or even slightly higher to make sure you get the deal. This is part of our Real Estate Startpoints - be quick to jump on prime investments when you find them.

As we discussed in the article The Realtor Search: How to Find and Keep a Real Estate Agent, you need to concentrate your investment focus on a particular area and get a real estate agent that knows this area well. This allows you to jump on investment openings quickly, before other investors jump in before you. For example, a For Rent sign comes up on a great property. Call the owner up and see if the homeowner may be interested in selling that property to you. This almost always assures you of being the only person bidding on that property and submitting an offer - this gives you a huge negotation advantage if you’re the only person submitting purchase offers. Maybe the homeowner is an elderly person tired of managing the property and wants to retire in peace - this is a perfect chance to get a great deal. The point is to become an expert in your target investment area, as soon as a For Rent or For Sale sign comes up, you should be first in line to find out the details.

In every career, networking and action are the keys to success - investing is not an exception. Networking is key because this is how you get those amazing “insider deals” that many people don’t know about but you get first crack at due to your connections. Action is essential because you need to act without hesitation if you find a great property - run the numbers and if it all looks good, then go for it. So many opportunities are lost due to inaction - in real estate investing and in life in general. Network yourself, take action, and take control of your financial future.

Like we talked about in our previous post Consumer Debt Worst Offenders: Banks, Advertisers, and Advisors, there’s a lot of financial entities out there more than willing to help you part with your money. It’s big business and consumers are getting hit with the worst of it. So what can we do to not be a financial victim?

The best option is always prevention. The easiest way to live free of debt is to not get into debt in the first place. Even if you’re already up to your neck in debt, there are ways to climb out and ways to reduce the amount of debt you currently have - you just need to have the right strategy.

Always pay the full balance of your credit cards each month when you receive your credit card statement. Otherwise, don’t use your credit cards! If you think you’ll be unable to pay the balance off in full when you get the statement in the mail, then you don’t need that item or service you were thinking of buying. If you think you won’t be able to pay off the balance yet you still feel that pressure inside you wanting to buy that item ask yourself what’s more important, your financial future or more stuff in your life?

If you aren’t disciplined enough yet to be able to pay your full credit card balance each month and not spend more than you can a month on credit then there’s only one option for you. Grab a scissor, take all your credit cards, cut them into miniature pieces, and throw them in the garbage. Just keep that one emergency credit card mentioned in the previous article and throw out the rest.

If you’re deep in debt, you know you won’t pay off your balances each month, yet you don’t want to cut up your credit cards then the reality of the situation is that you’re heading straight down the path to financial disaster. You have to be able to stop this vicious cycle of credit card indebtedness.

The way to getting control of your credit card spending is to learn to associate your present negative financial situation to the virtual slavery of credit card debt. Take out your wallet or purse, pull out all your credit cards and lay them out in front of you. Realize that these credit cards are like keys locking you into a virtual cage of financial prison. Visualize all the negativity that these cards have brought into your life due to faulty spending habits. Remember the debt that these credit cards have caused; remember the huge monthly payments that seem to keep growing and growing. Grab the nearest scissor and cut these cards up. This is the first step toward financial freedom.

Once you’ve destroyed your credit cards, find yourself a no-fee credit card with great rates so you can start on your new financial strategy of Pay-It-In-Full. Now you can transfer as much of your old credit card debt into this new card and take advantage of the usually very low fees for the first year or so (sometimes you can even find no interest credit cards that offer this for the first twelve months). This can significantly drop your credit card monthly payments and allow you to start paying down the total balance as well as everything you used the card for in that month. This allows you to pay more of the principal and less of the interest. Just be aware that this is a true transfer and not a cash advance which usually carries high interest rates.

There are also many credit cards out there that offer great rates if you use that company’s services or products. For example, the Health Care One Mastercard allows users to save from 20% to 40% on health care and physician visits, the Amazon.com Rewards VISA Credit Card gives you points that can be redeemed for gifts (including flight tickets, airline miles, hotel stays and more), and uStudent Credit Cards offers credit card matching for students to get credit cards that meet their needs.

Cashback bonuses can also sometimes be a big incentive to use a particular credit card that you know you’ll be paying in full anyway when the statement comes. The Discover Business Card gives you 5% cashback bonus on office supplies, 2% cashback bonus on gas and up to 1% cashback bonus on all other purchases. Another credit card with an interesting premise is the Discover Motiva Card that pays you a full month’s interest for paying ontime and with no annual fee.

Whenever you’re applying for a credit card make sure to read the fine print and never sign up for a credit card when you don’t understand the terms. Call the company and find out directly from the company representatives.

Bottom-line in improving your credit card financial situation is self-discipline. Only order a new credit card when you’ve paid off your old ones via balance transfer. Once you’ve done this, cut up the cards and cancel the account in writing with a subsequent phone confirmation.

Keep yourself disciplined and you, not the credit card companies, will be in control of your finances.