7 Strategies To Live Debt-Free And Increase Wealth

Wed Jan 19, 2011, 8:10 am | 1 Comment

I have talked about debt in terms of the good, the bad, and the ugly kinds of credit. To live a nearly worry-free life and to enjoy and realize the sweetness and comfort of life, we must get rid of debt in our lifetime and as soon as possible, especially the stinking ugly debt, the worst of all debts. The following are 7 strategies you can adopt to live a comfortable financial life by living debt-free and increasing wealth.

1. Develop Debt-Free Mindset

   Without doubt your mindset is the most important factor in your effort of making your life debt-free and be on the path of creating wealth. The resources on earth are definitely limited but still there is an abundance of wealth of all kinds. Wealth of happiness, wealth of family, and wealth of money. Change your mindset to be happy in every sense of the word. The big culprit of people’s unhappiness is debt – by far the greatest worry.

2. Spend Less Than You Make

   I have said it many times, to avoid debt from the beginning and to get out of debt, you must start spending less than you make. This way you would either not get in debt or get out of it sooner than you had imagined. If you can, save at least 10% of your take-home income. To grow money, you should invest a part of your saving in stocks, bonds, Treasury Notes and the likes.

3. Learn About Money

   For some folks, money seems to be a foreign language. You don’t have to define it technically. However, you must realize the value of money, the effort you make to get some, the effort you make to save some. Don’t go by the history of money and how the process of money came into being. You just have to realize how to make money, how to save money, how to grow it by investing and its value so you can buy the things that you actually need and can use.

4. Pay Off Your Debt ASAP

   Just think about it. Once you are debt-free, slowly and gradually your savings would increase along with your effort to grow it by investing. So just be default, you are on the path of creating “wealth.” There are ways to get rid of debt. This blog and others as well have shed some light on how to become debt-free. You have all the information you need. It’s to time to take action. Information is good but you can benefit from it only when you act on it.

5. Acquire And Increase Assets

   Grow your assets by acquiring new ones. Real Estate is still on a downhill in many communities. Stocks have gone up but still have many opportunities in them. There are quite a few places that you can invest. You just have to look for them in your communities and beyond. One of the things you can do is to acquire knowledge about money and investing. Only acquire assets you can afford and manage to pay for.

6. Realize Power Of Interest Compounding

   Out of your savings, bring some money out in the open and invest it. If you are at an age of 30 or younger, you start investing every year some amount and by the time you hit 65, you would be a millionaire or close to being one. You would not be in a situation like I am with very little in my name, either cash or investment.

7. Leverage Others’ Money And Time

   Because I have little money now, I am thinking about using other people’s money and time. I have to figure out how best to use either or both. The ability to raise and use other people’s money and time is crucial to obtaining the financial freedom we all desire.

In a Nutshell
First off, we all must try to strive for debt-free life, especially the bad and the ugly debt that we don’t need in our lives. If it gives us return in the long run, for example, home mortgage and business of some sort, then that kind of debt is good. But just wasting money and spending more than you make and consequently getting into debt is what I call stinking debt.

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