the SLOW process with debt before investing

[Derrick Camber]

Hi Everyone,

I wonder how many people out there are like me.  We are dreamers and know what we want to do, how we want to do it, and especially the BIG WHY, for freedom from a job and to follow your passion.  However, there is that tiny issue of having some debt before I can get there.  Yes it is small at $10k in debt.  Which is holding me back from starting.  I know it is a process but, does anyone else get frustrated with how long the process can take??!! I listen to the BP podcasts, I read books nightly and have a personal library on Personal Finance/Real Estate books.  My Cash Flow and income source eyes were open with Rich Dad Poor Dad in 2007.  I set goals in November to change my life (habits) and focus on getting debt paid off, money saved, credit repaired and to be back to $0 in debt to move forward with my investing.  The main issue I have is I want everything paid off IMMEDIATELY and then a few days later realize I paid TOO MUCH off at a certain time, and left myself short in my accounts.  So I then get discouraged and then set a goal to replenish that money, only to spend again all on the debts. So just wondering how others operate with type-A personalities, and A.D.D. like me, but successfully pay off their debts AND save at the same time to get back to $0 to then move forward and take action by investing.  I listen to the podcasts and say these are all great, ONCE I am financially ready to make the first move with down payment saved and great credit score etc etc.  Thanks! 

[Zach Fairfield]

I understand the issue and having the month nut down to a minim makes investing the money a lot easier.  However in my experience is the attempt to hedge against the risk. I personal have 50-60k in debt from 3 vehicle loans, student loans, credit cards. I have goals to pay it down and I pay as much as I can every month and try and maintain minim balances on my cards. What I have learned to do is to leverage my debt against my credit. I pay the debt earn more credit get crafty with how I pay down my debt.  For example I had a credit card that I had maxed out I was paying every month but the balance wasn't going down. I had t buy my wife a van to accommodate for our third child and in the process I got her van financed at 3.5% interest. It was such a good rate (due to the credit I built) i asked them if they could refinance my truck with the same rate. I also pulled the 3k of equity out of my truck and payed down a significant amount of my Credit card. Then I also asked them if they could get me a credit card through the same credit union. They got me a 10k limit card with 0% interest for 18 months on balance transfers. So i transferred the balance left to the new card. So the moral of the story is with one hard credit hit I got two vehicles financed at low interest 10k of additional credit and took 5k worth of debt at 25% interest and got it down to 3.5% and 0%. Lowered my debt ratio boosted my credit score nearly 40 more points and kept roughly the same payment per month. 

What I have learned is that its not about the debt its how you handle and understand it.  A lot of what I here and see here on bigger pockets and the people who scale and build major wealth have a deep understanding of how debt works and helps them leverage their money. If you don't have to pay it right now and can use your money to make more money. Then the longer you wait the more money you don't have.

PS. Sorry for the long post I am just excited about how money is starting to make sense to me.