Gain Financial Independence By Dropping Debt

On this episode:

Young or old, wealthy or on their way to wealth, one of the most common questions I get is: “How can I become financially independent?” While no two people are the same, the first step many have to take in order be financially independent is often the same: they have to get out of debt.


[01:15] How Can You Truly Be Financially Independent

[03:29] 3 Immediate Steps to Getting Out of Debt

[06:50] Next Steps to Financial Independence


Episode Transcript:

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[00:00:01] I had the privilege of getting to help many different people design their financial future, but young, old, wealthier on their way to wealth. One of the most common questions I get is how can I become financially independent? And whenever people ask me this question, I take a long, hard look at their current financial situation. You see, no two people are the same, but the first step that many people have to take in order to be financially independent is often the same. They have to get out of debt. On this episode, you discover how to gain financial independence by dropping debt. Welcome, the money moves. I'm your host of Julio Sylvia. My goal is to share practical insights about business worth and money so you can design your financial future and enjoy life on your terms. Now let's get moving. When it comes right down to it, being financially independent means that you can support yourself financially. You don't have to rely on others, whether it be your parents, your friends or even the bank to make ends meet or pursue your other goals in life. But many people, even those are the high paying jobs, can't support themselves financially, at least not really. That's because they're buried up to their eyeballs in debt. In fact, it's estimated that one in three adults are so far behind on some of their debt payments that their accounts have been put into collections. Let me give you an example to kind of illustrate this problem. I wanted a story of a young man who had several high interest credit cards, balances that totaled well over 30 thousand dollars. Now, he had a stable job with a steady paycheck, was able to make minimum payments, so he didn't worry much about them. [00:02:05]

[00:02:06] He decided he needed a new vehicle, a brand new truck. So he consolidated all of his debt into the new truck that he bought, bringing his total debt to sixty five thousand dollars a year later. He had the wonderful opportunity to start his own company. Now this required some additional investments. Now bringing his total debt to an amount in the neighborhood of one hundred thousand dollars. His company was running well, but it still wasn't very profitable. He was constantly putting more and more expenses on credit cards. But he thought if he could just hang on for a few more months, then he could turn the corner and start to make his company profitable. Eventually, though, his luck ran out and he was forced to close the doors to his business and sell his truck. After the dust settled, he found himself unemployed without a car. Well over a hundred thousand dollars in debt and considering bankruptcy. And this story is not an uncommon one. Many people are overextending themselves and are not willing to delay their immediate satisfaction in favor of their long term well-being. For that reason, ridding ourselves of debt is an absolutely crucial step to achieving financial independence. I expect that you may not have to worry about this, but in case you do, or if you know someone who does. Here are a few tips to help get rid of debt. To gain financial independence by dropping debt. There are three things you've got to start doing. First, the best way to get out of debt is the turn bad habits into good habits. So let's put aside terms like debt consolidation, debt settlement or even bankruptcy. Those things have their place. But the most surefire way of getting and staying out of debt is to change the habits that got you in the debt in the first place. [00:03:58][111.8]
[00:03:59] The plain and simple truth is that we live in a society that values obtaining material things. Everyone wants the newest cash at the fanciest car, the biggest home, the fastest motorboat boat, you name it. Now, there's nothing wrong with wanting those things except when our desires take precedence over our needs or when our reach exceeds our grasp. To make matters worse, people don't just want things. They want them now. And they're perfectly willing to pay for them on credit, which in reality means not actually paying at all. Borrowing. And here's another truth. It's one thing to get out of debt, but actually staying out of debt is something else entirely. That's why I said to forget terms like debt consolidation. You consolidate your debt. You can declare bankruptcy. You can even cut up your credit cards. But unless you change your fundamental spending habits, chances are those same habits will eventually get you into debt all over again. Changing your habits is not the quickest way to eliminate debt, and it's certainly not the easiest, but it is the most permanent and most important. Second, created budget by taking control of your cash flow. It doesn't matter if you're a poor, starving college student or a wealthy, successful business owner. Creating a budget is always a good idea for everyone. Having a budget essentially means that you have a plan for your money. It means you determine exactly how much money to save, how much money to spend and what to spend it on. It means no longer being at the mercy of unexpected events or winds. It gives you control of your own finances, which, if you think about it, is just another way of being financially independent. Third, consider the order in which you pay off your debts. [00:05:49]

[00:05:50] Some experts recommend paying off your largest debts first. This makes sense. I mean, after all, your largest debts are probably your biggest problems, right? And while there's nothing inherently wrong with that advice, you might want to consider an alternative. Paying off your smallest debts first. The reason is that when you focus mainly under your largest debts, the task can really seem overwhelming. You can pay and pay and pay and pay and just not feel like you're making a dent like you're on this hamster wheel. Meanwhile, your smaller debts keep piling up. So by concentrating on your smaller debts first, you can effectively remove more of those little monsters sooner. That means less pressure on you. It means less weight on your shoulders and it will help you build momentum. And momentum is important because the energy it creates and the habit it helps you form will enable you to better tackle your largest debts. A wise man once said that 100 percent of bankruptcies happen to people who owe money, being in debt can cause a tremendous amount of stress in your personal life and a lot of cases your professional life as well. Getting out of debt can give you peace of mind and the financial freedom so that you can truly prepare for your future. As we work with individuals on helping them design their financial futures, it's about meeting their dreams and their expectations of what their life will look like in retirement or how they want to impact their family or give to charities and their community. And being able to put your resources and your work literally to work for you in the future requires a plan that is not tied down by massive debt where you're having to work for someone else instead of working for your future dreams and aspirations. [00:07:43][113.2]

[00:07:45] If you're looking to create that financial plan, please make sure to reach out to us. We're more than happy to help. Simply visit financial security group icon and fill out the contact form and we'll be more than happy to help you out if you're currently in debt. I want to encourage you to find a way to get out. Start putting in the practice a three steps that we talk about in today's episode so that you can cut your spending, pay off your debts, have an emergency fund and truly be financially independent. And if you're not in debt, I hope you'll take the necessary steps to keep yourself out of that crippling debt. Whatever you choose to do, just remember that eliminating debt is the first step to being able to support yourself financially. It's the first step to achieving true financial independence. Thanks for listening. I hope you enjoyed this episode, it provided you value and got you charged up to make some new money moves. Do me a favor and share it with others on social media. Use the hashtag money moves and you never know what kind of swag we'll send your way. If you're looking for the show, knows links to resources and more visit. Money Moves podcast. Dot com. When you subscribe, I'll give you a free copy of my latest guide. The three key money moves to create wealth. Now as my way of saying thank you. That's w w w dot. Money moves podcast dot com. Wherever you may be listening or however you may be listening. Thanks for making money moves part of your day. And remember, if you make the right money moves today, you'll be able to navigate your financial life without sacrificing your lifestyle so you can enjoy a prosperous future. [00:07:45][0.0]

About the Author

Evelio Silvera is a business development and financial services professional. Evelio is an best-selling author and acclaimed speaker and speechwriter with numerous national and international awards who has appeared on national radio and television programs and been featured in several publications.