Debt Management: Its Importance

"Debt can be the most addictive thing in the universe, and it can kill you. You get used to living high off the hog. It was intoxicating."    --Harvey Weinstein

Being buried in debt is both an overwhelming and painstaking experience in one's life. But don't worry, there's always a better way out. And once you'll be able to get out from it, do make a resolution that you will never get into it again.

You might be buried in credit card debts because of overspending. Or because you've had bad business decisions in the past that lead you to loan sharks. 

In managing your debt, there are two things you must do:

1. Consolidate Debt

Debt Consolidation is a form of debt refinancing that entails taking out one loan to pay off many others. Not all our loan are interest-bearing. Sometimes we borrow money from families and friends and they never charge us for interest. In debt consolidation, we give priority to the loans which are interest-bearing and those which has higher interest rates. Instead of having loans from different sources, you have to find banks or lending institutions that would be able to give you a secured loan which has much lower interest rates than your existing loans combined. The lower the interest rates the better. It means you will save a lot of money that only usually goes to interest.

According to Debt.org, a debt consolidation service can lower your interest rates, lower your monthly payments, protect your credit score and can help you get out of debt faster.

Debt consolidation is not a debt solution. It merely combines all your debt into one single, more manageable loan. If your current monthly repayments seems smaller in figure, check if it is due to a longer loan term, for which you may be paying higher interest rates.

 2. Eliminate Debt

Being in debt can be a stressful experience. Regardless of your circumstance is, if you signed for a loan, you are obligated to pay it back even if you have an unexpected event in life like losing a job, accident, calamities or having a new child.

According to Clark Howard, here are the Five (5) steps to get rid of your debt:

1. Make a conscious decision to stop borrowing money
2. Establish a starter Emergency Fund
3. Create a realistic budget and stick to it
4. Organize your debt
5. Throw any excess cash at your debt

It is very important that you always remind yourself of your freedom day (the day you want to be 100% debt free) because it will help you establish your ground to start all over again---from someone who is buried in a deep-neck debt into a person who is debt-free!

The Root of All Evil: Bad Money Habits

Are you buried in credit card debts right now? If that's the case, can I ask you another question? How many credit cards you have? 3? 5? 10? Whew!

Maybe you would say, "I'll just pay my outstanding debts and I'll cut them off." As an emotional being, promises like this one will never be fulfilled because tomorrow or next days, you will accumulate again another debt. And the cycle goes on and on...and on.

Let me suggest one thing. CUT IT OFF RIGHT NOW! By doing so, you're already giving yourself a great favor. The "chains of debt"  in your being will start to lose its power and influence over you because you already proclaimed in the universe that you want to be free. It doesn't matter whether you have surmountable outstanding balance in that credit card, what matter is, your chances of creating another debts become NIL. Nada. Zero. Don't worry about the credit card companies. Even without your credit card, they will survive.  But keeping your credit cards especially those that only give you endless headaches and nightmares will shorten your life because of  S-T-R-E-S-S. Focus on your financial future. If these credit cards prevent you from having a sound sleep every night, then, what's the use of having a second thought?

You want something to inspire you on how you're going to dramatize the death of your credit cards? Watch this video...

I was also a victim of this credit card slavery. It's good that I have only one credit card. Before, I envied my office mates because they possess many credit cards. I'm so thankful that  my applications for other credit cards were disapproved. Let me tell you why I'm thankful. After 2 to 3 months of using their new credit cards, most of my office mates were hiding from credit card companies. It's either they were absent, sick-leave or resigned. They become the world's greatest scriptwriter of all time. So am I. The funny thing was at most cases, they have to pretend to be someone else, or change voice when speaking to a steadfast agent over the phone (the great pretender!). So am I.

Now, my only begotten credit card has already been paid off. 

What is the cause of these bad money habits?

In his book SpeedWealth T. Harv Eker says, "Money is only a convenient symbol that represents and measures the value of goods and services exchanged between people." See, it's only a symbol, nothing else. Your habits about money will determine whether you will become "good" or "bad" in handling your money. Does money gives you freedom? Does money lets you become self-centered?

We love to buys clothes even most of the time we're already confuse what to wear. We love to buy stuff even we can live without them. We love to be updated of what is "in". At times, we only live and care for today even it means "emptying" our future because of unnecessary debts.

So what do you think is the cause of bad money habits? I called it ATTACHMENT:  The act attaching, or state of being attached; close adherence or affection; fidelity; regard; an/ passion of affection that binds a person; as, an attachment to a friend, or to a party (http://ardictionary.com)

If your certain attachment to a person or materials things prevents you from achieving your financial growth, what do you think is the best thing to do? 

I didn't say that credit card is bad. It's a neutral thing. Its purpose depends on the person who handles it. If you are buried in credit card debts, it only means one thing: YOU HAVE A BAD MONEY HABITS. You are the only person who can say whether my statement is right or wrong. If I'm wrong then prove it.

While you are still learning how to detach yourself from the cause of your debt slavery, it's better to CUT OFF everything that hinders you from growing. You can start from your credit card.

Fourth Key Element of Change: Reconditioning

(Part 4 of 4)

In this blog, I will introduce you to different wealth files that will determine the difference of mindsets or "mentality" between rich people, the middle class and the poor. I agree with Mr. T. Harv Eker that rich people are not better than poor people. Rich people are just richer. The only difference is how they think and act rather that the actual money they've got or their value in the society.

These wealth files should replace your "old" files about money so that every time you will encounter limiting beliefs or issues about money, your mind will search for "new" files because the "old" files has to be replaced and eventually deleted on you mind cabinet. This process is called RECONDITIONING.

How these wealth files works?

 Let me show you the example Mr. Eker uses in his book Secrets of the Millionaires Mind:

"For instance, let’s say my wife is in the mall. That shouldn’t be too hard for me to imagine. She sees this green purse. It’s on sale for 25 percent off. She immediately goes to her mind files with the question “Should I get this purse?” In a nanosecond, her mind files come back with the answer: “You’ve been looking for a green purse to go with those green shoes you bought last week. Plus it’s just the right size. Buy it!” As she rushes to the checkout counter, her mind is not only thrilled that she’s going to have this beautiful purse, but glowing with pride that she got it for 25 percent off. To her mind, this purchase makes perfect sense. She wants it, she believes she needs it, and it is “such a deal.” However, at no point did her mind come up with the thought “True, this is a really nice purse, and true, this is a great deal, but right now I’m three thousand dollars in debt, so I’d better hold off.” She didn’t come up with that information because no file in her head contains that. The file of “When you’re in debt, don’t buy any more” was never installed in her and doesn’t exist, which means that particular choice is not an option."

"Isn’t it amazing that our mind is pretty much the basis for our life and yet most of us have no clue as to how this powerful apparatus functions? So let’s start by taking a simple look at how your mind works. Metaphorically, your mind is nothing more than a big file cabinet, similar to what you’d find in your office or home. All information that comes in is labeled and filed in folders so that it’s easy to retrieve to help you survive. Did you hear that? I didn’t say thrive, I said survive. In every situation, you go to the files of your mind to determine how to respond. Say, for example, you’re considering a financial opportunity. You automatically go to your file labeled money and from there decide what to do. The only thoughts you can have about money will be what are stored in your money file. That’s all you can think about, because that’s all that is in your mind under that category.", T. Harv Eker further explains in his book.

The following Wealth Files were very helpful and valuable in my transformation when it comes to my limiting beliefs about money and also in other parts of my life. Every time I am being confronted of problems of many kinds, I'll just read these Wealth Files and I instantly transform into an unstoppable person.

According to Mr. Eker, there are actually two kinds of habits: doing habits and not-doing habits. "Everything you are not doing right now, you are in the habit of not doing. The only way to change these not-doing habits into doing habits is to do them. Reading will assist you, but it’s a whole different world when you go from reading to doing. If you are truly serious about success, prove it, and do the actions suggested,"  he added.

   

As you can see, there is declaration for every wealth files. Every time you read out load each wealth files, place your hand in your heart. As you read the declaration, you can touch your head and say "I have a millionaire mind".

It is a must for you to put each file into action in your life as quickly as possible so that the knowledge can penetrate into your physical, cellular level and create lasting and permanent change. 

Wealth File No. 1

Rich people believe “I create my life”
Poor people believe “Life happens to me”

Declaration: “I create the exact level of my financial success”

Wealth File No. 2

Rich people play the money to win.
Poor people play the money not to lose.

Declaration: “My goal is to become a millionaire and more”

Wealth File No. 3

Rich people are committed to being rich.
Poor people want to be rich.

Declaration:  “I commit to being rich”

Wealth File No. 4

Rich people think big.
Poor people think small.

Declaration:  “I think big! I choose to help thousands and thousands of people”

Wealth File No.5

Rich people focus on opportunities.
Poor people focus on obstacles.

Declaration:  “I focus on opportunities over obstacles. I get ready, I fire, I aim”

Wealth File No.6

Rich people admire other rich and successful people.
Poor people resent rich and successful people.

Declaration:  “I admire rich people! I bless rich people! I love rich people and I’m going to be one of those rich people too!”

Wealth File No.7

Rich people associate with positive, successful people.
Poor people associate with negative or unsuccessful people.

Declaration:  “I model rich and successful people. I associate with rich and successful people. If they can do it, I can do it!”

Wealth File No.8

Rich people are willing to promote themselves and their value.
Poor people think negatively about selling and promotion.

Declaration:  “I promote my value to others with passion and enthusiasm!”

Wealth File No.9

Rich people are bigger than their problems.
Poor people are smaller than their problems.

Declaration:  “I am bigger than any problems. I can handle any problems!”

Wealth File No.10

Rich people are excellent receivers.
Poor people are poor receivers.

Declaration:  “I am an excellent receiver. I am open and willing to receive massive amounts of money into my life!”

Wealth File No.11

Rich people choose to get paid based on results.
Poor people choose to get paid based on time.

Declaration:  “I choose to get paid based on my results!”

Wealth File No.12

Rich people think “both”.
Poor people think “either/or”.

Declaration:  “I always think both!”

Wealth File No.13

Rich people focus on their net worth.
Poor people focus on their working income.

Declaration:  “I focus on building my net worth!”

Wealth File No.14

Rich people manage their money well.

Poor people mismanage their money well.

Declaration:  “I am an excellent money manager!”

Wealth File No.15

Rich people have their money work hard for them.

Poor people work hard for their money.

Declaration:  “My money works hard for me and makes me more and more money!”

Wealth File No.16

Rich people act in spite of fear.
Poor people let fear stops them.

Declaration:  “I act in spite of fear.
            I act in spite of doubt.
            I act in spite of worry.
            I act in spite of inconvenience.
            I act in spite of discomfort.
            I act when I’m not in the mood!”

Wealth File No.17

Rich people constantly learn and grow.
Poor people think they already know.

Declaration:  “I am committed to constantly learning and growing!”

I would recommend for everyone to read completely the book of Mr. Eker to fully understand the secrets contain therein.

Reprogramming Your Money Blueprint

(Part 2 of 4)

Are you programmed to fail?

 Or are you programmed to succeed?

Of course, your answer would highly depend on your "programming" or influences. Remember, your "programming" can be classified as verbal programming, modeling and specific incident.

T. Harv Eker in his book "Secrets of the Millionaires Mind" enumerates programming as:

1. Verbal programming-"What did you hear when you are young?"

2. Modeling - "What did you see when you are young?"

3. Specific incident - "What did you experience when you are young?"

Let's say that your brain is the CPU of your personal computer. Human brains, like yours are also programmable same as your personal computer. Whether you think you are programmed to fail or to succeed depends on the program that is being installed in your CPU while you are young.

In my previous blog, I discussed the first key element to change your Verbal Programming: Awareness

The second key element: UNDERSTANDING.

T. Harv Eker says, "By understanding where your "way of thinking" originates, you can recognize that it has to come from outside of you."

I mentioned what was my verbal programming in my previous blog Preludeto Financial Freedom: Know Your Money Blueprint. Now that I am already AWARE, the next thing to do is to UNDERSTAND how this verbal programming has affected me. Now it's time for you to understand your own verbal programming too. Get back to your list of verbal programming and I will help you to understand them.

I was introduced to responsibilities at the age of 10.But prior to that stage, I would say, my family used to live a comfortable life. Because that time my father works in a factory, my mom works as a dressmaker while my eldest brother works as a family driver. In short, we have more than enough for everything. But when my father got sick because of Tuberculosis, we have to leave the city life and have to transfer to the province, not only to follow the doctor's advice for my father's health but also due to financial difficulties. To make it worst, my eldest brother went astray because of drugs. My father's immediate successor has gone A.W.O.L! Believe me, living in the city without money is a horrible nightmare.

More drama of my life unfolds when we transferred to the province. When my father's health condition improves, mom has to leave for work as household helper in the nearby town for us to survive. My sister stopped studying and got to work as well. I do almost literally all the household chores for me and for my dad: cooking, washing, cleaning, and even going to the market. Honestly, I earned my Home Economics degree unknowingly. I did it in the name of love and mission. 

Since "I am the one" programmed to elevate my family from poverty, I can't afford to be a failure. True enough, I was an honor student and became instant celebrity in our place. My neighbors also contributed to my verbal programming. For them, I am the "most responsible" son in the whole wide world...and that words become flesh and my reality. When my sister settled down, my programming continues--I'm still "the one". 

To prove my claim, for those who doesn't know me personally, I have something to confess—I just married last January, this year. Why? For sure, you can answer that question now.

By UNDERSTANDING, I was able to answer the million-dollar questions in my mind. Everything made sense to me now...

   I stayed single for so long because my mission that I am "programmed" to accomplish is not yet a reality.  

   I stayed single for so long because until now my family is not yet financially-free.

   I stayed single for so long because getting married is a hindrance to my mission. And to fail in my mission is not an option.

"Your thoughts originate from the "files of information" you have in the storage cabinet of your mind. So where does this information comes from? It comes from your past programming. That's right, your past conditioning determines every thought that bubbles up in your mind. That's why it's referred to as the conditioned mind," T. Harv Eker explains.

So, I'm done with the understanding of my own verbal programming, how about yours?

Let me remind you. You cannot proceed to the third key element to change your verbal programming unless you fully understand how your programming affects your life.

On my next blogs, I'll show you how to make DISASSOCIATION and how to RECONDITION your programming.

P.S. You can also apply the first two key elements in other aspect of your life. You'll be amazed.

Prelude To Financial Freedom: Know Your Money Blueprint

(Part 1 of 4)

"Each of us has a personal and success money blueprint already embedded in our subconscious mind. And this blueprint more than anything and everything else combined will determine your financial destiny," says T. Harv Eker in his book "Secrets of the Millionaires Mind".

"Really?", this is my initial reaction when I read the part one of his book. For sure I'll get more "aha" if  I will not stop reading the book because the truth is there's more on the next pages.

He said also, that like the blue print for the house, our money blueprint is simply our preset program or way of being in relation to money.

To illustrate, T. Harv Eker uses the Process of Manifestation--the formula that is being used as foundation for teachings by many respected teachers in the field of human potential.

The formula goes like this: Thoughts > Feelings > Actions >Results

To simplify, the formula explains that our thoughts lead to feelings, our feelings lead to actions and our actions lead to results.

Let's apply this formula.

Imagine that your life is recorded in a DVD. Insert that DVD in the player, press rewind. Focus on the part when you are already aware of the things around you. Let us go inside your house and remember your family, especially your parents.

As a child, probably you heard your parents saying these things: "money is the root of all evil", "rich people are greedy", "rich people are criminals", "you can't be rich and spiritual", "money doesn't buy happiness", "money talks", "not everyone can be rich", "there is never enough"...and so on. Probably you have your own dialogue to share.

Whatever we heard about money, whether good or bad are called Verbal Programming.

Now, list down all your Verbal Programming.

When I did this activity, I found out why I'm so much attached with family responsibilities and almost forgot that I have a life of my own.

The answer: because I had this programming that "I am the one" who can elevate my family from poverty.

This programming affects most of my decisions. I keep telling myself that my family needs me, that they can't live without me, that I can't afford to be selfish even I have nothing to give. My verbal programming gave me my thought that "I am the one". My feeling of compassion to my family leads to my action of helping them no matter what. My action of keeping myself in the forefront of responsibilities leads me to my result: I'm dead broke. That’s me a years ago. Now, I no longer consider myself a "dead broke".

In order for us to change our Verbal Programming, we need to be aware. AWARENESS is the first key element of changing our Verbal Programming. T. Harv Eker says, "You can't change something unless you know it exists".

By the way, I was introduced to T. Harv Eker, when I joined  Online Mentoring where I met more mentors.

On my next blog, I'll share with you the second key element of change: UNDERSTANDING.

Want To Achieve Financial Freedom? Get Mentors!

Why financial freedom?

After almost 14 years of  working locally (1994 to 2008) , there's one thing I can say: I'm still in the rat race! Being in the rat race means many things:

Your salary isn't enough to sustain your means of living.

You live from paycheck to paycheck. 

You work hard till night but no overtime pay. And even bring your work at home.

You act like a robot because you do the same things again and again.  

You have to follow your company's mission: No work, no pay! 

You earn but still buried in debt.

You act like a prisoner. You have the exact time to eat and take your break. There are many rules to follow.

So on...blah...blah...blah.

And yet there are many times that you've got to borrow money from your office mates and friends because there's an emergency needs to be paid. And the sad thing is---you can lose your job anytime for whatever reasons. Recession is one of them.

Believe me: being an employee is only a short term solution for a long term problem! Wait! I didn't say that having a job is bad, what I'm saying is your objective should be focused on creating passive income streams so that you'll get out of the rat race. Don't wait till you retire. 

By the way, you might ask me what does passive income means. Passive income means that your money works for you. It means you earn even if you are sleeping or while you're sun-bathing in one of your favorite beaches. You'll get out of the rat race when your passive income becomes equal or greater than your monthly expenses. Your paycheck is called active income because you've got to work for it. If you got sick, you earn nothing. If you are earning passive income, you can pay financial debts, you can buy your dreams and most of all---you become FREE! 

What should you do to earn passive income?

Look for money-making ideas. These money-making ideas are everywhere waiting for you to discover. Think abundance and for sure you will see them!

Look for mentors. Your mentor should be someone who doesn't just "know" about finances but someone who is actually financially-free! He walk the talk and who is actually doing the right thing and is successful in doing the real thing.

Let me introduce to you my mentor...introducing Bo Sanchez.

Don't worry, I'll introduce you to him through his latest article about The Secret of Retiring Rich: Money Cost Averaging. You can become his student too.

I got something to tell you. When you found mentors in every aspect of your life whether it is financial, spiritual, or relational --you'll never get lost. As of now, I'm on my way in getting out of the rat race. I'm grateful to say that Bo Sanchez leads me wherever I am right now. It is true that when the student is ready, the teacher arrives.

On my next blog, I'll introduce you to my other mentors. 

For the meantime, take action. Be coach-able and apply what you learn on the process and start your journey towards financial freedom.

How To Start Your Financial Life In Order

Maybe some of us are actually in the brink of financial bankruptcy but so afraid to admit. A sick person can only seek a doctor's advice when he accepts that he is really sick. The same goes with your financial health. If your pride is bigger than the universe then don't expect miracle to happen in your finances. 

More than five years ago when I first sat down and discovered how financially sick I was. No assets, only liabilities. With the dreams I have in mind, there's no possibility at all to achieve them unless I should do something. So I decided to left my country and work abroad. The realization came when I did the following:

1. List down all your Assets and Liabilities

       Write down all your debts whether interest bearing or non-interest bearing. Money or things that you owe are called liabilities. When I said debts or loan, it means every money that you owe even to family members. Once you have the total amount, ask these questions?

        a. With your current income, how long it will take for you to pay them? If it will take you a lifetime, then what are you waiting for? Do something about it NOW!

         b. If you're going to pay your debts at this very moment, do you have investments or properties to sell like house and lot, cars, equipment, etc.? These are called assets. In my case, I don't have assets to declare, only liabilities.

This is the most important step: know first your financial health. This will be your guiding map and by this map, you will realize how far or near you are to your financial goals.

Let's go to the next step.

       

2. List down all your dreams

Listing alone your debts will either drain your energy or push you beyond your comfort zone. I believe in balance that's why I recommend for you to list down also all your dreams. The Law of Clarity says it should be specific. If you're dreaming of having a car, you should know the color, the model, the cost and the exact date you want to achieve it. It goes with the rest of your dreams.

With your dreams on one hand, and your financial health on the other hand, I'm sure you will have a balance perspective of your financial journey.

After five years of working abroad, it dawn on me that I'm really racing against time. I need to maximize my earning potentials, have a multiple source of income to fast track my financial journey. I must say that I already won the half of my financial battle and looking forward of achieving my financial freedom in two to three  years from now.