This is actually the not to do list. This is the way to the dark side of becoming financially independent. If you find yourself doing any the things listed here, immediately stop yourself.
- Apply for all those cool credit cards like free miles, points and cash rewards. These are good in limited numbers like a maximum of two of these combined.
- Apply for any credit card that does not give you anything back.
- Take your credit card and max it out to buy unnecessary things for crazy luxury or to impress your friends.
- Pay your bills late and then pay late fees.
- If you have big bills, at least try to pay the minimum payment.
- Wait till a unpaid bill goes to a collection agency.
- Don’t pay your landlord or mortgage because you want to buy that sweet new current year vehicle. My friends dad told him “You can’t live in a car and if you could, how long do you think that will last?”
- Try to runaway from your taxes.
- Payday loans are for emergency funds in which you pay back high interest rates. Instead create your own emergency fund of about 6 months worth of emergency money.
- Pride, think you don’t need to budget and put away some side money. Listed as pride but it can be listed as poor thinking.
If you are guilty of any of these things, please call a financial adviser!
LoL, I had fun posting this little folly list because I am happy to report that I am no longer doing these things any more.
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Snowflaking is a more basic and simple approach to the snowball effect to debt reduction. When you think of snowballing, you think dollars a day while when you think of snowflaking, you think of pennies a day.
With this approach, even a dollar a day extra can accumulate to a large reduction in time. I would use this to pay off the higher interest debt first. Adding the snow flake effect as extra monthly principal.
You can take income from minor second income ventures as well.
Ebay.com - One approach is to sell items on ebay.
Craigslist.org - craigslist then take the extra income to apply it to snow flakes.
Survey Online - Another approach would be to take surveys online.
Yard Sale - Even old methods such as yard sales can deem valuable and effective to the cause.
You can use any of these methods to gain extra income and you should send payments immediately or as soon as your permitted to.
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Credit cards are great but require self restraint. It just makes it too easy at times to spend money and you don’t notice the total until the end of the year. So this is the greatest debt builder but we have a great way to combat this.
- List you credit cards in interest order.
- Determine which credit cards you will terminate because as a rule of thumb, you don’t need more then 3 credit cards ever.
- Call each credit card company in order and ask for a lower interest rate and “no fee 0% APR” transfer.
- Start transferring balances from the new adjusted higher rates to the new lower rate.
- Pay off the remaining balances on the highest credit card balances first.
- Snowball your new debt free life.
- As you pay off the debt, cancel the card on balance completion until you have 3 credit cards or less left.
- Pat yourself on the back because you just terminated you debt.
It’s that simple to do. It may take some time but this method is the best and cheapest method to remove these hurdles from your path to getting rich.
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To become financially independent you will first need a road map that will help you attain that level of independence. I have been playing around with some methods and I found that these were some good methods to help me out. A good road map should help you get out of debt, invest, budget and plan for retirement.
Making Money Methods
- Set Goals - What do you want to do? Make money, attack debt or plan for retirement. Hopefully you will like to do all of these things at once. I planned to set my goal to increase wealth and in that respect to increase wealth.
- Read Personal Finance - Read every web article, book and subscribe to personal finance magazines.
- Track Spending - Track all of your expenses so you can see where your money is going. I realized that I spent about $60 per week at Duane Reade. You know that was cut later on.
- Cut Expenses - This goes hand in hand with tracking expenses. You then analyze where you spend too much and then trim them out of your budget.
- Decrease Debt - Start cutting down credit card debt. Start with the smallest debt then work your way up to the big ones. Shop around better interest rates then call up your current credit card and tell them to rate you can get and see if they will negotiate. If they do fine but if not then transfer the debt to the new one and close the old credit card immediately. Cut your total credit cards down to 2 maximum cards.
- Extra Income - Look into alternate streams of income. I use dividend stocks, Google Adsense, web advertisement, regular 9 to 5 job, high yield money market account for liquid money, rent house/apartment.
- Purchase Stock - I would say to purchase dividend stock because they increase per share and they still function as stock.
- Purchase Property -By purchasing a property, you increase your wealth automatically and fast. You force yourself to save and properties increase with inflation.
This simple but highly effective methods are so simple when you think about it, but highly effective. These cover making money, removing credit card debt, gaining extra income, cutting expenses with a tighter budget and planning for retirement by learning steps to increase wealth.
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