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Get Out of Debt and Stay Poor?

Are you currently digging your way out of debt? Do you have dreams of bringing that credit card balance down to zero? Or maybe you’re trying to get rid of those pesky student loans! Whatever the case may be, there are a ton of people trying to dig their way out of debt right now, and I’m definitely ecstatic to hear it! However, many of these people don’t seem to realize that their mindset will keep them in poverty for the rest of their lives…

Debt Sucks

If you’ve ever been in debt, you know that it absolutely sucks. When you buy something without actually having the money to pay for it today, you inevitably create a monthly payment for yourself (sometimes for the next 5+ years!), which means that you’ve just reduced your cash flow each month. Instead of having 600 extra bucks at the end of the month, now you have only $200. Having debt leaves you feeling trapped each and every month. It restricts you from going on trips, buying gifts for your friends, and sometimes even going out to eat. It doesn’t seem like you can buy anything without first thinking about your debt.

Then Get Rid of It!

So what’s the solution? Well obviously, it’s to get rid of your debt! It’s definitely not easy, but if you’re consistent and disciplined, you can definitely get out of debt. And, once you’re close to getting out, there’s just such a weight that starts lifting off of your shoulders. It really is a miraculous feeling. I can’t wait for all of you to get there and experience it for yourself.

Time to Live Life YOUR Way

Finally, your debt is gone and you don’t owe anyone a single penny! You’re free! Rather than going through the routine of writing checks to your creditors, you can whip out your tablet and watch your bank account grow. Without that constant payment getting deducted from your checking account, you suddenly feel free to do those things that you’ve always wanted! Now you can take that long-awaited vacation, get a whole new wardrobe, get tickets to that expensive concert in town, or you could even buy those shiny golf clubs you’ve been eyeballing for years! After all, you’ve got the cash, so it’s ok right? This is where many people get themselves into trouble…

Back in the day when you were adding to your debt load, you were continually asking yourself what you wanted and what you could buy. And, since you had great credit, you just bought it (and added to your payments each month). While you were paying off your debt, you suppressed these thoughts, but you never transformed them to wealth thinking. This is exactly why so many people get out of debt and either go right back in, or they develop a paycheck-to-paycheck lifestyle.

So How Can You Build Wealth Instead?

Nobody wants to be in debt and I don’t believe that anyone really wants to live from paycheck to paycheck either. So the question is, “How can I change my mentality to build wealth and not remain poor?” First of all, you must realize that not everything you want is a necessity. Did you really need brand new $2,000 furniture? Or could you have sat your butt in a nearly-new $500 set? How about that car of yours? Is it really necessary to drive your 2 year old, $15,000 car, or could you find one that’s just as dependable for about $7,000? Rather than getting what you want, you should only buy what you truly need.

In addition to curbing your expenditures, you must begin to think 5, 10, 20, or even 40 years into the future. Do you have any idea how much money you’ll need to retire? If you answered $1 million and you’re under the age of 50, I’d say that you’re sadly mistaken. No matter what your age is, if you truly want to be rich, you must begin to make investments into the market, into your education, and into your own business.

When you were digging your way out of debt, you might have begun your own business on the side to generate some more money. For me, it was this website. Now that I’m out of debt, I use this additional money to invest in my education. And soon, once I’ve graduated with my MBA, I’ll use the monthly income to buy a rental property. Ever hear the phrase, “the rich get richer”? Well, it’s true, and it could be you if you let it.

How are you going to build wealth in the future?

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24 comments to Get Out of Debt and Stay Poor?

  • Getting out of debt is really difficult. Sometimes, when you are close to getting out, another problem arises that make it even worst! When I was in college, I was unable to pay my fees. I applied for a loan and promised to pay before the next exam. Unfortunately, I wasn’t able to pay it. So I applied another loan to pay the current loan. And then I applied another and another just to have a “quick fix” on the current one and to minimize the interest. Lesson learned, do not do a quick fix on your debt.

  • My wife and I have been debt free for almost 3 years and while it was a complete struggle and very hard at times to get out of debt. We barely remember/think about the strict budget we use to have. My point is, getting out of debt is tough but once you accomplish it, life is so much more enjoyable.
    Brick By Brick Investing | Marvin recently posted..How To Use Trailing Stops

  • Lifestyle inflation is a dangerous demon. 9 times out of 10, it is much better to avoid increasing your expenses with each new income increase and put that money towards paying down debt, or building true wealth. The people who I respect the most have done this over the course of their careers, and they are peaceful and secure with their finances.
    Adam – HireMeHigherEd recently posted..The Best Career Advice I Ever Received

    • Great point Adam. I’m living the same old life I used to with a much higher income. Occasionally I treat myself, but it’s just so much nicer to not have to worry about money vs. having a bunch of toys that just get old after a few weeks.

  • Great point about there not being a specific number to “end up with,” but a mentality and discipline. Looking forward to more on similar subjects.

    • Thanks Tony. Always appreciate the comments. I’m just seeing more an more of a need for people to increase their financial knowledge, rather than just putting their head down and driving their way out of debt. If they don’t learn about opportunities along the way, they won’t be able to take the next step into wealth creation.

  • Great post. I think for me once I graduated college I was in heavy debt and had no idea how to handle money but I had a burning desire to get rid of debt. I am happy to say that I will be debt free this month! I think a lot of people in today’s society want instant gratification and they don’t think long term. This is why so many people are in debt.
    Kevin Watts @Graduatingfromdebt recently posted..Applying for a student loan post debt settlement – Are you at a risky state?

  • I’ve been thinking about buying a rental property as well but right now I’ve got so much debt payments weighing me down it’s hard to come up with a down payment. Doesn’t help I dug myself six thousand dollars deeper into the whole last month lol. But one of these days I’m going to be out of debt too :D
    Liquid recently posted..Fiscal Update – March 2013 – One Currency

    • I am looking into rental property as well, but I would like to be completely debt free (including the mortgage) before I invest in something that large. If I really put my head down and give it my all, I bet I could accomplish this in a couple of years.

  • Being in debt sucks times 100. I can actually say I am out of a 15k dollar debt as of a couple of months ago. I used to have dreams (nightmares) of the situation. However, it’s the GREATEST feeling to be out of it.
    Jai Catalano recently posted..Yakezie Challenge – Part 2

    • That’s AWESOME Jai!!! Have you felt like you’ve been responsible with your money once you became debt free as well? This is really the deciding point. Will you become an investor of your money, or a spender?

  • Easier said than done of course, but obviously cutting back on your budget and not buying non-essentials is going help. I firmly believe that the only way to prepare for retirement and getting debt free is to try and start a small part time online business. I’ve helped thousands of people to do this in the past with great success, and whether the business stays small or grows is almost irrelevant.. because every little helps, every extra dollar is a dollar towards being debt free :)

    • I like your thoughts David. I’m right there with you. By starting a small online business, you can earn the extra money and maybe even invest the majority of it, which then earns you even more money! It’s a great way to go once you become responsible with your finances.

  • Getting out of debt is not that easy, but it is worth the effort. It can sometimes may you feel like it’s making you enjoy your life less, because you need to concentrate your funds on something that does not serve you anymore, but remember that being able to pay it off, will give you the peace of mind that you need and when you’re debt free you’ll really be able to enjoy the things you’ll buy because they’ll be guilt-free.
    My Multiple Incomes recently posted..Comment on An Old School Marketing Trick in an Online World by Jules@Fat Guy,Skinny Wallet

    • But to what extent should you be free to buy what you want? If you’re too liberal, that’s when you stay poor. Sure, you’re paying for everything with cash, but if you’re not investing in the future then you’ll never get ahead, you’ll just remain poor.

  • Debt sucks big time for sure.
    Most of the people, when they get their hand on money, end up blowing it in either better apartment or expensive car, BIG MISTAKE!!!!!
    Keep a part for the future to eliminate the chances of getting ran into the ground when you need financial back-up.
    Great article to share.
    Melissa recently posted..Need To Make Money Online? Find Out How It Works.

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