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07-04-2013, 02:14 PM
RE: Debt
(07-04-2013 09:42 AM)bbeljefe Wrote:  The reasons I don't like the cash only model are as follows...

I get 1-3% back in Costco Cash for using my Costco AmEx card. That's why I don't do cash only. I do Costco AmEx card only. Tongue

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07-04-2013, 02:51 PM
RE: Debt
I put together a short financial tutorial for my college-age nephews some years ago and this thread made me go back and re-read it. All of it still applies but I found these particular bits of advice worth sharing for starters:

There is one other way to budget yourself without actually creating a budget (this is my preferred method and I have been practicing it for a long time); that is to create an artificial economic environment of scarcity. You achieve this by giving yourself an allowance. In my case no matter how much money my wife and I make in a month I always transfer everything above a certain amount into savings so that every month I start with the same nice round figure in my checking account (keep in mind that this is an amount that I know can cover ALL the basic needs plus a little more for fun). At the end of the month after all deposits have been made whatever is above that number gets transferred into savings. In this way it is very easy to see how you are doing against your allowance.

Example: Let’s say my number is $3,000.00 in checking. Throughout the month I pay all my debts (say $1,000.00) as they come in (via online banking). I also deposit a paycheck of $2,000.00 so that I now have a balance of $4,000.00 in the account. On the last working day of the month I transfer $1,000.00 (everything above my $3,000.00 allowance) into savings and start the new month again with $3,000.00 in checking.

On a dry-board in my home office I record how much we transferred every month throughout the year. We take great satisfaction in seeing just how much we can save this way to help us achieve our “Life List” of goals.

Keep in mind though that at first the only way you will know how much you need in your checking account at the start of every month to realistically cover fixed costs is to create a historical budget. I keep meticulous records on 3-ring binders.


• Credit Cards – Good or Bad? How would you answer these questions?

o If I told you I wanted to borrow from you $1,000 and pay you 5% when I knew I could invest your money and get 18% would you think I was smart or a financial fool?
o If I had $1,000 in the bank making 5% while I owed $1,000 to a credit card charging me 18% should I keep the money in the bank or pay off the credit card?
o If I could pay using your money for something I wanted and not have to pay you back for thirty days, then pay you back in full and owe you exactly what you loaned me and not a penny more would I be smart or foolish? Most credit cards have a grace period that allow you to do just this.

Credit – Good or Bad?

o On the other hand if you don’t have sterling credit you are dead in the water.
o Did you know that published interest rates are quoting the rates they would loan to you only if you have a Beacon score higher than 700 and closer to 725? If your score is less guess which way the rates will go? Up! Mediocre credit costs you big bucks!
o You have to make yourself a good credit risk to borrow the money and leverage your investments to make the money to borrow more money to … anyway you get the picture. Fix your credit today.
o Establish personal relationships with lenders. If you don’t have access to money this isn’t going work. Remember that even credit rates can be negotiated especially if you have a high Beacon and/or have done business before with the lender (provided you paid up of course).

Speaking of negotiations check out this book:


The seven common denominators of the wealthy (from the book The Millionaire Next Door):

1) They live well below their means
2) They allocate their time, energy and money efficiently in ways conducive to building wealth.
3) They believe that financial independence is more important than displaying high social status.
4) Their parents did not provide economic outpatient care.
5) Their adult children are economically self-sufficient.
6) They are proficient in targeting market opportunities.
7) They chose the right occupation.

Hope this helps a bit, I can vouch for all of it.

“I am quite sure now that often, very often, in matters concerning religion and politics a man’s reasoning powers are not above the monkey’s.”~Mark Twain
“Ocean: A body of water occupying about two-thirds of a world made for man - who has no gills.”~ Ambrose Bierce
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07-04-2013, 10:59 PM
RE: Debt

Sapere aude
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07-04-2013, 11:06 PM
RE: Debt
(07-04-2013 09:20 AM)bbeljefe Wrote:  
(06-04-2013 06:33 PM)f stop Wrote:  I have to disagree with you there. Kiyosaki is to finance what the Bible is to religion: TOTAL CRAP. I failed to find any advice in Rich Dad, Poor Dad. I don't mean I failed to find any good advice. I mean I did not find any advice at all. He's all hype. If you disagree then show me where I'm wrong, chapter and verse. I still have his book in my library. I'll look it up and get back to you.

I'm not interested in arguing with you over subjective value. Kiyosaki has made money in real estate and in other investments using the techniques he shares in his books, I have made money using some of them and I know other real estate investors who have. You say you got nothing and I take you at your word but I don't know that it's wise to discourage someone from reading material that may help them. You and I are not the same person and the OP is yet another individual with different interests and motivations than both of us.

I'll give you an example... in No Money Down Carleton Sheets lays out about a dozen specific approaches at acquiring real estate. Some of them appealed to me and some of them did not. You might read the same list of techniques and find the ones I didn't like to be perfect for you. Does that mean the techniques that worked for me but not you are wrong? On the contrary. It merely means that you and I have different abilities and comfort levels. And ultimately, if a technique for making money is voluntary and honest, it cannot be wrong.

Regarding Rich Dad, Poor Dad, there has been a lot of speculation that the characters in the book are fictional. And that may be true. It also doesn't matter, because the book isn't written as an historical account... it's written to convey a mindset about how to earn and keep money. And clearly, it's a mindset that you don't feel comfortable with. I get that. No need to argue about it. Wink
Sheets is also TOTAL CRAP. And I've read his stuff too. I doubt that either Kiyosaki or Sheets have ever made a substantial amount of money from real estate. They made it selling books and worthless courses.

I too am not interested in arguing about how-to-get-rich gurus. I just don't have the time. However, I would like to make two points.
  • All of Sheets techniques are unethical and require a silver-tongued-devil con man mentality. In one of his videos Sheets tries to laugh off critics, quoting them as saying "It's probably illegal." Well, at least one of his techniques is illegal, it's outright fraud. I'm talking about the one where you try to convince a seller that a municipal bond is worth its face value rather than its current discounted value.
  • If your current problem is debt then subscribing to the books, courses, methods, ideas of get-rich-quick real estate gurus is not a solution. If you insist on traveling that road then get your critical thinking abilities in full gear. Question everything. If you then are able to buy real estate for nothing down, then rent it for a positive cash flow, and make a profit, then I suggest you abandon atheism and return to religion, for you will have pulled off a miracle.

Sapere aude
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08-04-2013, 08:28 PM
RE: Debt
Everyone, thanks for your input. It's been a busy few days on my end, hence my lack of response until now.

I will say a few things:

1. Every response is greatly appreciated. I wanted to hear from intelligent people with a reason-based perspective on this topic and I'm gratified with what I've read so far.

2. I appreciate the advice on bankruptcy but this is something I can work my way out of.

3. I was somewhat aware of Kiyosaki and shyed away from people like him largely for the reasons stated above. I'm not affluent, at all. I did borrow a book of his from the library and knew how helpful it wouldn't be when he cited as an example his wife making $1 million off a real-estate deal.
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12-04-2013, 02:33 PM
RE: Debt
So I have a grasp of the broad strokes -
* Get a second job, knowing that the long hours will suck but that it will pay off both in the short- and long-term
* Stop using credit
* Set up an emergency fund, $500 to $1000
* Debt snowball, but paying off one particularly high interest loan first before going lowest amount to highest amount (but if I can be convinced to do the highest interest to lowest interest rate, I will change my strategy)
* Get on a budget

And I probably (if I don't decide to stick with Dave Ramsey's Baby Steps 1 and 2) will contact someone locally thru the National Foundation for Credit Counseling.
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