I graduated with my Business degree in Finance back in 2008. At approximately this same time, my friend asked me if I have ever listened to Dave Ramsey, a personal finance teacher that preached the message of ‘Cash is King’ and ‘Debt is for Dummies’. With a chip on my shoulder, I responded, “I do agree with some of his teaching, but to avoid debt entirely? That’s simply just dumb. After all, debt is a tool and can be used to earn money without shelling out your own.”
I thought I was so smart, but in actuality I was just money hungry. Debt is hardly ever a good idea for a personal account since we are not rapidly growing our assets through business ventures and products that are creating a buzz in retail. Nope. Most of personal finance has one main inflow of money that needs to be budgeted in order to have some left over in the future.
The Debt Trap
To be completely honest, debt is fun. Well, it is at first at least. At this moment, I could easily head over to the Mercedes dealership and buy their most expensive model. All it takes is some financing and I could drive off the lot with an $800 a month bill for the next 60 months. If I had some cash left over each month, I could do the same thing with a boat, and then perhaps a few smaller toys like a snowmobile or a wave runner. It all seems fun at first, but then we realize that we have stranded ourselves with our very own trap.
By financing everything in life, we suddenly have no other options other than paying those debt bills each month. Our friend may come along and show us an amazing business opportunity that is sure to take off, but with only $50 to show for ourselves, that deal leaves and makes someone else rich. Debt will handcuff you personally and will make earning additional money incredibly difficult.
Get Out of Debt and Earn Your Grand Per Month
I used to have $25,000 in personal debt. It got to the point where I was struggling to make my monthly payments and was constantly watching my account to make sure there was something in there to live off of. I most certainly was not thinking about how I could invest some of my money to increase my earnings. There was nothing left to invest!
After 14 months of dilligent work, I was able to rid myself of debt completely and it made earning money so much easier. Instead of having $50 left at the end of each month, I had $1,000. After just a few months, my bank account was nicely padded and I started to wonder how I could use this money to make more money? I decided to start a website in order to help others that might be going through the same issues, and I could make a little money on the side doing it. With just this simple decision back in 2010, I have added over $50,000 to my income over that time. It was a simple decision, but because I had the funds to give it a chance it paid off tremendously. If you want to earn an extra $1,000 a month, you may want to first focus on getting out of debt so you can actually invest in your future income.
Be sure to check out Derek’s money making blog at Life and My Finances.