Do you struggle with money? Do you feel that there’s only enough to keep your head just above the water? One of the biggest areas of concern for many people today, especially after the 2008 financial meltdown that wiped our jobs and prosperity for millions, is the recurring question of debt. People were encouraged to borrow, they maxed out their credit cards, took out loans and re-mortgaged their homes and the result was an unprecedented explosion in debt. A lot of that debt is still very much with us today. It doesn’t always make the headlines. But it’s still there.
Wealth creation is a serious issue. Our mission is to help people become wealthier and to create more money and freedom in their lives. One of the first tasks we face in any wealth creation strategy is to reduce debt. It’s so much harder to make significant progress when you’re funnelling hard cash into interest payments and worrying about your debt. Takes the shine off any day. That’s why we place so much importance on debt reduction wherever possible. It’s the starting point in any financial transformation plan.
For most of us, the answer comes in two parts:
1. Consolidate your debts into a more affordable package
2. Cut spending
Sounds simple but you’d be surprised how often the basics are ignored or neglected. In a consumer society, everyone is encouraged to spend, even if they can’t afford the goods on offer. In my childhood – which must sometimes sound like a description from a Charles Dickens novel! – the culture favoured and encouraged savings. People saved up for the things they wanted. That was it. Debt was deeply frowned upon. In a few short decades, the culture has shifted radically. Savings are out. Debt is the new king. But that clearly doesn’t work. Especially when the debt overwhelms us and we struggle to keep up with the repayments. In a consumerist society, the idea of cutting back may seem like the most unnatural suggestion imaginable. But that’s how we balance the books. That’s how we create cash surpluses. Cut back on the non-essentials, get back in control of our spending, start to see positive balances in the bank account. It might not sound very glamourous or exciting but, as a financial strategy, reducing debt and building up a suitable cash cushion are the two foundation stones on which long term wealth is built.
Cash is king. Long live cash!
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