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Day #6 – Buy Thing That Appreciate in Value

In certain circumstances debt can be a very useful tool for making money. You made have heard of people getting into a lot of debt in order to purchase a house or to purchase stocks, this can be a great way to make money.
The goal is to use debt to purchase things that appreciate in value. Most people get into bad cycles of debt because they buy things that depreciate in value. A new sports car for example depreciates 20% as soon as you drive it out of the car dealership. It is now only worth 80% of what you paid for it and you and you need to continue to pay interest on that 20% that you lost.
However if you bought a house, and you bought it for $500,000 and it went up 10% per year you could make $50,000 per year, and if your repayments were 7% per year you would pay $35,000 in interest. You would therefore make $15,000 / year.

Things such as clothes, food, entertainment and technology all decrease in value over time as they get used and as new technology is created that is better than what you have bought. You should try to avoid buying these things on credit as you will pay more for it than what it is worth. Try to buy these things with money that you actually have and instead buy things that appreciate in value with money you have borrowed. This way your wealth will continue to grow.

Note: Items such as cars and computers can be worth purchasing with borrowed money as they may allow you to have the ability to work from home or travel to work which you wouldn’t have been able to do otherwise. In this sense they are items that are helping you earn money.

Go to Day #7 - Do You Really Have To Borrow?

Day #5 – Establish Your Own Limits

In order to become a master of your debts you need to realise and live within your own limits. Everyone will have different limits depending on the size of their debt and what they earn and you will need to work out your own limits in order to become the master of your debts.
For me personally at the moment there are just some things that I want which I cannot afford. One of them is an ipod touch. I am in desperate WANT of an ipod touch however I know that currently it is beyond my means as I need to use my money to focus on my business.
You need to know your own limits and what you can and cannot afford to have. Some things just simply aren’t worth borrowing money for in order to get them. Make sure you do not step out of the limitations your current income presents to you. As soon as you step out of your limitations

Differentiate between what you need and what you want
Often we will say things like “I NEED …..” but really what we are saying is “I want ……”. Learn to understand the difference between what you really need and what you just want. Try to avoid spending lots of money on things you just want and spend your money on things that you need instead.

Know your own limits in your spending
Have a budget and stick to it. More on writing and sticking to a budget here.
If you spend beyond your means then you will be controlled by debt. So know how much you earn and how much you can spend in each area and STICK TO IT. If you spend more in one area don’t just say “Oh well I’ll do better next month” do your best to cut spending elsewhere in your budget. Spend money within your means not beyond.

Know your own limits in your repayments
Sometimes when you are really passionate about destroying the debt you have accumulated you put all (or most of) you income onto your loan, but then you have no money to live off so you have to take money out again. Be realistic about how much money you can put on your loan and then do it each month and live off the rest.

Try to increase your limits
The last thing you can do is try to increase you limits so you can achieve more of what you want. You can increase your limits in two major ways. By decreasing you debt (and therefore decreasing the repayments you need to make on your debt) and also by increasing you ability to earn money. Setting up multiple streams of income is a great way to earn extra money.
Having investments that earn you money is an example of an extra stream of income you can have, writing an ebook and selling it is an example of an extra stream of income you could have. Find ways to make more income and then your limits will be increased and you can buy that ipod touch 32Gig you have been dreaming of.

Day #4 – Spend Less Than You Earn

In order to truly master your debt you need to begin to minimise the debt that you owe. This way the less debt you have the less interest you will have to pay and the more manageable your debt will become.
In order to have enough money to begin to pay off your debt using money you don’t spend on other things, and in order to do this you have to start spending less that you earn.
If you spend more than you earn then your debt will increase and become more expensive and eventually will get out of control. But if you spend less than you earn then your debt will decrease until ultimately you have no debt and instead have an excess which will earn you money and lead you to becoming extremely wealthy in the long run.

Here are some tips on how to spend less than you earn
1. Budget – Creating a budget is one of the most helpful tools you will need in order to be able to spend less that you have earned. It will train you to control what areas you spend your money in so what you can spend it wisely and effectively and save up enough to reduce your debt. For a more detailed post on budgeting CLICK HERE
2. Cut Your Costs – There are many simple ways you can cut the cost of your spending in order to save some excess. Things such as buying cheaper brands, avoiding expensive brand names, buying clothes when they are on sale, buying food one bulk when they are on sale. You can cut you cost without sacrificing a lot just by buying things at the best time.
3. Don’t spend what you save – Often when we save $5 on food we will go and spend that $5 on something else such as a coffee or some lunch. But it is important that instead of spending the money that you save you either invest it (to make you money) or you use that savings to pay of your debt (and reduce your repayment costs)
4. Cook Your Own Meals – Eating out can be extremely expensive. Cooking your own meals is a great way to save money as it is much much cheaper.
5. Avoid Impulse Buying – Impulse buying is where you buy something you didn’t plan on just because you felt like it in the spur of the moment. You can avoid this by not taking your credit card with you, sticking to what your budget says or even freezing your credit card so you need to thaw it before you can use it. Impulse buying often costs more that you would usually be willing to pay for an item and more than likely you will regret it later on.
6. Put savings aside first – As soon as you get paid (whether it be weekly, bi-weekly or monthly) put a set amount of money aside to pay off your debt. Put it on your credit card or on your loan and decide that you no longer have that money. Then live off the rest and continue to try and cut back and save more.
7. Save your coins – Coins are heavy and they make annoying noises in your pocket. Instead of spending your coins on coffee or chocolate invest in a money tin and whenever you come home put all the coins in your pocket in this tin. When the tin is full take the money straight to the bank and put it on your loan.
8. Use all excess money to pay off your debt – If you ever get bonuses, or money gifts, or even a your tax-refund at the end of the financial year, put the lump sum on your loan. You may think it would be great to buy you clothes, but these lump sums can really help you smash your loan to bits and decrease your repayments immensely.

So I hope now that you are beginning to understand that in order to master your debt you need to spend less that you have earned. So follow these tips and watch your debt begin to decrease as you become the master of your money and your life.

When it comes to chasing after your dream of becoming a millionaire it is vital to your survival that you stay positive. Without a positive mindset you are sure to fall into the trap of negative thinking.

The saying that says “If you think you can or think you can’t you’re right” is so very true. Keeping a positive attitude will drive you towards success, however if you have a negative attitude then almost everything will be impossible for you to achieve.

Although it is impossible to have a positive attitude 100% of the time (after all we are all human and flawed), but it is important to maintain a positive attitude as much as you can. A positive attitude is not reliant on the circumstances you are in or how well off you are in like. It is simple how you react to those situations. A positive attidude allows you to see the potential in people and in circumstances and allows you to turn bad circumstances into good circumstances over time. Most importantly a positive attitude is vital if you want to become a millionaire, because without it a negative attitude will drag you down into failure.

I have compiled a list of ways I believe you can get and keep a positive attitude.
1. Hang around positive people – You become like who you hang around, if you hang around positive people you will become positive, if you hang around negative people then you will become negative. I learnt this lesson early when I read in the bible that “as iron sharpens iron, so friends sharpen the minds of each other”. So spend time with people full of positivity and full of faith and you will see your attitude to your work change and you will become more productive, more creative and more successful.
2. Remind yourself to be positive – put reminders in your phone, stick them on your walls and continually remind yourself of the positive aspects of things not the negatives ones. When a circumstance arises train yourself to look at the positives not the negatives. This is great because I positive attitude seeks to overcome and solve problems whereas a negative attitude will shut you down and let your problems overcome you.
3. Keep a thankful spirit – every morning when you wake up have a thankful spirit. It will keep you positive all day. More on having a thankful spirit here
4. Read positive material – Read books and websites that inspire you, read testimonies of people who have made it in the area you want to see success and be inspired that it is possible to achieve
5. Set achievable goals – Often we set goals too high that we cannot achieve them. When we fail we get upset and negative and our progress is stunted. Instead set smaller goals which you can easy achieve and as you achieve them give yourself a pat on the back and set bigger goals to achieve. This will help you keep a positive attitude towards goal setting and the progress you are making.

Staying positive may sound a little off topic, but it is a vital aspect to anyone who is going to build wealth. Because building wealth takes time it is easy to lose heart and become negative, we need to avoid that and stay positive because that is where we will see most of our results.

Today continues our series on Mastering Your Debt in 30 Days. For yesterday’s article Day #2 - Write a budget and stick to it click here or for Day #1 Click Here. 

Day #3 – Changing Your Consumer Mindset

Society today teaches us to be a consumer, to buy buy buy. But this consumer mindset is likely what got you into debt in the first place and it needs to change.
Imagine if you will that you are building a house of wealth, where every brick is $1 and the final product (the metaphorical house) is a wealthy life for you and your family. Every time you save money you are adding bricks to your house, and every time you spend money you are taking bricks away from your house.
The consumer mindset that we have in western culture today has no goal of building a magnificent house, instead we just want to use the bricks for other things such as clothes and cars and food and shopping. This mindset is what gets us in debt.
We need to change our mindset and develop a mindset of building wealth. This is a mindset that adds to the house continually. That is not saying that they don’t take bricks away from time to time, but as a whole they give more to the house than they take away. The greatest thing about a building mindset is that as time goes on your money begins to work for you and earn you money so you don’t have to work anymore. Your money begins to grow at a quicker rate over time as you begin to earn interest on your interest.

So how do we begin to create this builders mindset? Well there are a few steps you can take in order to develop this mindset and become a builder not a consumer.

Have a goal for the future
Having a financial goal for the future will drive you to save and invest. It is having forward thinking that allows you to be a builder, because you are not just thinking of the now (of the bricks) but you are thinking of the completed product in the future (the house). So get some financial goals for what you want your future to be like and then work towards a better future.

Spend less than you earn
A builder gives more to the building than he takes away. So spend less than you earn. A great way to manage and do this is by creating a budget. CLICK HERE to read more on how to write a budget and stick to it. Tomorrow we will talk more about spending less than you earn.

Let your money work for you
There are two ways of making money, you either work for money, or money works for you. As you save up and invest then your money begins to earn you money (and you don’t even have to do anything) and you can retire and just live off the money that you earn. So as you master your debt and begin to save you can begin to invest and earn more money by letting your money work for you.

CLICK HERE to Read ”Day #4 - Spend Less Than You Earn”

Writing a blog is a great way to practice your writing skills for creating your own information products

If you want to create your own information products such as an e-book, a teaching series or maybe even a seminar then you will need some practice writing so that you can create a product people are going to like and buy. I wrote a post of the advantages of creating your own products here.

When starting your own business, especially online, you are constantly refining your business to make it run better. You find out what works and what doesn’t work and you continually improve so that you increase your earnings. A great way to improve before (or even after) you release your first products is to write a blog. A blog is a website that is continually updated with new material, most often showing the most recent material at the top of the page and the older material down the bottom.

People love blogs. Blogs are interactive and informative, you write to people and then people leave comments about your post. When you write a blog you want it to be interactive but informative. You want to give people the information they are searching for but you also want to create a trusting relationship between you and your readers and also a community in which everyone can learn from and interact with each other. A blog is a great way to practice your writing skills before you go ahead and create your own products. Here is why:

1. See what people respond to – With the ability to receive comments on your blog you can hear from readers what they think about your material. You will learn to discover what people like and what people don’t like. What people respond to and what they don’t respond to. This is great because when it comes to writing your material for your product you will know what people like and what they respond to and you will be able to give them what they want.

2. Find your niche – A niche is simply a fancy word for a specific topic focus. For example a blog could focus on the topic dogs, however a niche of dogs would be a blog just on sausage dogs or just on Labradors. A niche is specific and targeted.
Having a blog is a great way to find out what niche you want to target. You may start out with a few things in mind of what you want to write about (I know I started with money, wisdom, leadership, relationships, Christianity and sexuality) and after you spend time writing and developing your blog you can find out which niche suits you and which one you want to really go for. (For me I discovered that finances was my niche and now I am going for it)

3. Find your writing style – Blogs are full of content, that is their attraction. They offer lots of content for people to read, watch or listen to. By writing a blog you will discover your writing style. You might have a writing style that is more informative, or maybe your writing style is more relational. A blog is a great way to discover this and then when it comes to writing to create your own products you know your writing style and you can focus on doing that writing style well.

4. Interact with other writers – We as humans are designed to learn from other people. Blogging allows you to continually interact with other writers in your niche area and you can both learn off each other. You will find that as you teach you will learn, and as you ask questions you will learn also. So interacting with other writers can really fast track your writing ability.

5. Continually improve – A blog gives you the opportunity to continually improve. By utilising all the benefits listed above you can continually improve in all areas of your writing style .Everyday you have is an opportunity to write and an opportunity to improve. This is fantastic for anyone wanting to create their own products. A willingness to learn and be teachable is so important.

6. Create a customer base – While you are learning and while you are improving you can create a customer base through the readers of your blog. Then once you have finally created your product you have a targeted market to which you can sell your products and your customers will thankyou for the vital information.

7. Create Some Early Cash flow – Obviously in creating your own products you will be expecting to sell them and then create some cash flow from those sales. However, until your products are built, marketed and then finally sold you have had $0 in cash flow. A blog can provide you with cash flow through advertising (try Google Adsense), or through selling affiliate programs (other people’s programs). So blogs can be a great way to earn a little cash flow even though your products aren’t ready yet

This continues our series of “Mastering Your Debt in 30 Days”. For Day #1 of this series “When Debt Gets Out of Control” click here.

Day #2 - How To Write a Budget and Stick To It

One of the best ways to master your debt is to write a budget and stick to it. A budget is simply an outline of what your expenses are going to be (before you spend them). You write up a budget in order to spend your money wisely, to spend less than you earn and to save up as much money as you can. In the same way that debt takes money away from you in interest each month, extra money you have can be invested to BRING you money from interest each month. This is out ultimate goal, to let your money work for you.

Sometimes writing up a budget can be a very daunting experience because you don’t know where to start or you don’t know how to predict what you will spend accurately. So I have compiled some tips that I feel will be very helpful to you.

Start by recording your expenses
Before you start writing up your budget it is helpful to know how much you are currently spending each week/month and what you are spending your money on. It is preferable to spend 8 weeks recording what you spend before you start a budget, but I understand that 8 weeks is a very long time. 2 weeks should be achievable and enough to gather a rough estimate of where you spend your money and how much you spend.
Record your spending in different categories based on what you buy so then you can see where all your money goes. Try these categories to start with:
Home, Entertainment, Dependent Care (eg Kids), Food, Pet Care, Wearing Apparel (aka clothes), Education, Self Care (eg soap, toothbrushes, haircuts, manicures), Travel, Gifts and Cards, Personal Business, Health Case, Transportation, Taxes, Insurance, Savings and Investment.
If you can think of any more then you can use those too.
You can use a piece of paper to write up all your expenses, or maybe you can keep all your receipts and type them into an excel sheet on your computer. Do what works for you, but record EVERY expense.

Total Up All Your Income
The next step is to total up your income. If you have a spouse then you should be doing all these activities together as your finances are now combined, if not then just do it by yourself. Take into account your wage (minus taxes), and also any other income you may receive such as child support, investments, bonus pay or government support money.

Create Your Budget
Now it is time for the real stuff, writing up your budget. Don’t be scared by your budget and know that no budget is set in stone. It can be easily changed if your circumstances in life change. Head into the creation of your budget with the mindset that this is going to make your life better in the long run. With that in mind you will more likely enjoy writing your budget and you are also more likely to stick to following it knowing that it leads you to a better future.
Ok so how do we create a budget:
1. Get a piece of paper or use your computer (computers usually work better because budgets change often)
2. Decide on the categories your spending is divided into (see categories above for when you recorded your expense)
3. Write your categories down the left hand side of the page (use as many pages as you need to, these are your budget sheets; in an excel document this is very easy to do)
4. Now create 12 columns (one for each month). Now a 12 year budget is a great thing to have, but maybe you want to get rid of your debt in 6 months, then you could make a 12 month budget or just a 6 month budget to achieve your goal. Do what works best for you, there is no set formula
5. Write down all your expected expenses for each month in each of their categories based on the research you have done prior (where you spend your money and how much you spend)
6. Make a note of when your expenses are due (such as a yearly magazine subscription or insurance and rego on your car). Account for these as you may need to save for them in prior months or you may just need to spend less on other things that month.
7. At the bottom of each column total up your expense, then below that write your monthly income and then see what the difference is. If you are spending more than you earn then you will need to cut some expenses somewhere in your budget to pay back your debt until it eventually becomes $0, or even just something more manageable.
8. Keep your budget flexible. Things will change in life and your budget will need to change also, you will never get it right first time either so make sure your budget is flexible. If you spend too much in one category then don’t overspend that month try and cut it out of another category so you can save the same amount of money to minimise your debt

Stay On Track
Keep a record of all your spending so you can keep your budget up to date. Do your best to follow it and then put your excess money towards reducing debt or creating income (with investments that appreciate in value). Sometimes it is better to put money on your credit card which would cast you 13% per year to pay for than to put it in a savings account earning just 5% per year. Be smart with your money.
In order to stay on track there are a few quick tips I can offer you

Keep Focused on Your Future – Know what you want to achieve and keep that better future in mind as you decide to but some things out of your budget to save more money. As you begin to save more, pay off debt and invest your money, you will find you will not only master your debt but you will become wealthy with your money earning you money.
Stay Accountably To Someone – Be accountable to someone you know who is already doing budgeting well. They can keep you on track so you don’t give up. They can encourage you and challenge you and push you.
Sign Up For The Challenge – Sign up for the Fool’s Wealth Challenge to go from $0 - $1,000,000 in 12 months and receive free teaching every week from Ryan McLean to help you towards your goal. CLICK HERE to sign up

Go to Day #3 – Changing Your Consumer Mindset

The writer of Zen Habits says that he owes his success most to the fact that when he wrote his first opinionated post he got a great response from his readers. He then realised that he could be himself and still make money and have readers and now www.zenhabits.net is a fantastic blog that offers a challenging outlook on life and all the things that we do everyday.

When it comes to making money online some people try and hide behind a façade of who they want people to think they are. I prefer to step out from under the mask I could portray myself as and show you who I really am. I do this through personal comments in my writing, through photos and through video posts (which I am just starting). I want to create a financial community here on www.foolswealth.com where people don’t have to be afraid to be themselves and they can learn about finances and be spoken to where they are at, not pretending they are further ahead than they are.

If you want to build readership to your blog or website and you want to sell your products effectively then it can be helpful to have an opinion on things occasionally. Recently I wrote my first post which presents as strong opinion and that is the post of God and Money: Not God vs Money. CLICK HERE to read it now.

Here is why I believe it is beneficial for you to have an opinion occasionally.

You challenge peoples mindsets
When you present and opinion on something you are presenting a way of thinking to people. If this contrasts with their current way of thinking then it challenges their mindset. Most often they will disagree because people are set in their ways, but from time to time they will be open to change.

You can relate to people with your same opinion
People love to have their opinion affirmed and if you present an opinion that is similar to or the same as someone else’s opinion then they will love you for it.

Opinions are interesting
People love gossip and they love to read things that are interesting. Lets face it that a lot of information (however helpful) can be painfully boring to read. Opinions lighten up things a little and make your content more interesting.

You prove that you are not a robot and it is more relational
Anyone robot can provide information but people are looking for more than information they are looking for relationship and community. Opinions (especially when open for discussion) help create community amongst your readership and it shows them a little bit about yourself and who you are as a person.

It allows room for people to comment
As a writer always be open to comments from readers that disagree with your opinion and be willing to discuss it further. Don’t be stubborn but be opinionated. Then let people discuss amongst themselves if they agree of disagree.

Final Note: Opinions can be a great way of forming interesting and popular content. So don’t be afraid to have an opinion on something, those with the best opinions and ability to back up what they believe have the best content on the web.

In the world we live in today debt is a huge problem and there are so many people out there who have debt that is just completely out of control. This could have been caused by credit cards, bills or increased interest rates. There are so many things out there that put us into debt sometimes we need a little help mastering our debt and staying on top of things

For the next 30 days we are going to go on a daily journey of mastering our debt. Starting today we will begin to learn what to do when debt gets out of control, how to choose the best loan and how to control our spending habits so debt is not such a big problem. I am personally looking forward to this journey as I am looking at possibly heading towards a marriage in the next year or two and will incur some debt as a result and I look forward to helping many people master their debt in 30 days.

Day #1 – When Your Debt Gets Out of Control
If your debts become out of control and unmanageable it is important that you do not close your eyes and hope the problem will go away because there is no chance it will. Face the facts and begin to draw up a plan to free up some money to pay off your debts (and winning the lottery does not count as a plan).
When I worked in a newsagency hundreds of people would come in buying lottery tickets hoping they would win the lottery and all their problems would just go away. No one ever one, but they kept coming back and buying more tickets trying to hide from creating a real solution to their problem.
If your problem is extremely serious or long term it could be a good idea to notify your creditors (those who are lending you the money) and possibly consider seeking professional advice (especially if after these 30 days you still feel as if you haven’t mastered your debt).

Draw Up a Plan
Sit down and look at all your expense that your debt is causing. How much do you have to pay per month in fees, how much do you have to pay in interest each month. At the ABSOLUTE minimum you will need to find enough money each month to pay for these expenses so your debt doesn’t increase over time. Don’t worry because in the coming days I will show you some great tips on how to save money, how to curb your spending habits and how to make some extra money.
Then you will need to work out how much extra money you can pay off your debt each month OVER the cost of the interest and fees. This is how you will begin to control your debt, as your debt becomes smaller then you will have less interest and will be able to control your money much better

Set a Timeline
Setting a goal is a great thing if you want to be successful. One of the major attributes of successful people is they have goals and they set out to achieve them. Set a goal of when you want to have your debt cleared by, or maybe when you want to have your debt down to a more manageable point by. Set easy achievable goals at first so you can be encouraged by the achievement and then move onto larger and more difficult goals as you have a few notches under your belt.

Go to Day #2 - How To Write a Budget and Stick To It