The Way to Solvency
Debt is Skyrocketing
the exception of a small rise in middle-class
wages in the late 1990s, real wages have simply
not kept pace with inflation. In fact, the median
income of average households has fallen steadily
for five years in a row. Despite these facts,
consumption continues to increase. How can this
be? The answer, unfortunately, is that people
are incurring an increasing amount of personal
debt. Were talking here about the 95%
of us who are not wealthy, who are not saving
enough for retirement, and who are bombarded
constantly to buy, buy, buy.
that the nations economy is growinghow
many times have you heard politicians point
that out, while you wonder why youre still
so far in debt? What they fail to mention is
that the economic expansion is largely the result
of people overextending themselves, using credit
to buy such necessities as food and clothing,
and even taking cash advances on credit cards
to pay mortgage payments. A Federal Reserve
study showed that 43% of US families spend more
than they earn. The only way to do that is to
use credit. And it's pretty obvious that if
you use credit to spend more than you earn,
you are going to be in debt.
The credit card
industry collected 43 billion dollars
in late-payment, over-limit, and balance-transfer
fees in 2004. The major advertising ploy used
by all the credit card companies sounds like
a scene out of Brave New WorldYou
like it. You deserve it. Buy it. Its
easy to fall into their supposedly people-friendly
trap. But the truth is, they exist for one reason
only, and that is to make money from you.
the mail is here.
With the typical
American family now owing $19,000 on non-mortgage
debts, its no wonder that mail deliveries
have become something to dread. Which bill is
due or overdue? How much are the finance charges
on credit card A, B, C, D...and on and on. (The
average family has 13 credit, debit and store
cards.) Sandwiched between the bills are offers
from other credit card companiesor even
the same ones youve already got. Transfer
your balances! No interest for six months!
Many people go this route as a way out. It can
buy you some time, but it doesnt work
forever. The proverbial piper must eventually
be paidand when that time comes, it will
be worse than ever.
I always make the minimum payment!
Making just the
minimum payments on your credit cards will keep
your credit picture in focus as far as the credit
reporting agencies are concerned. Pays
required amount. Pays on time. Sounds
good, doesnt it?
youd be playing right into the hands of
your creditors. The less you pay on your
balance, the more interest they make. Lets
say you have a balance of $6000 on a credit
card and you STOP using it today. If your interest
rate is 17.5%, a pretty average percentage,
and you pay the minimum payment of $90 every
month, it will take you almost 20 years
to pay off the balance. You will have paid $21,240
on that $6000 balance. They made $15,240 in
interestand maybe additional amounts in
what you could do with $15,240! Wouldnt
you rather be tucking that money into an IRA
or a college fund?
Expenses Are Enough to Make You Sick
A 2006 study conducted by the Center for
American Progress showed that most older Americans
who find themselves in debt do so because of
the high cost of healthcare and prescription
medications. In fact, anyone of any age with
a serious illness or debilitating injuries suffered
by any family member can soon find themselves
in deep financial trouble. Even if you have
health insurance, there are deductibles, co-pays,
supplies and drugs that aren't covered. With
todays astronomical healthcare costs,
a policys maximum lifetime payout can
be reached with alarming speed. When they stop
paying, and care is still needed, where do you
turn? A medical emergency can be devastating
to any but the wealthy.
Keeping Up With the Joneses Is a Bad Idea
In recent years, low mortgage rates and steadily
rising real estate costs made home ownership
seem like an excellent investment. While that
is still true, some people find themselves in
trouble now if they financed their home with
an A.R.M. (adjustable rate mortgage) or an interest-only
loan. When the federal reserve began raising
interest rates, ARMs started resetting, increasing
mortgage payments by as much as 25%. If you
took an interest-only loan to buy a dream house
just before the housing bubble burst, prepare
yourself for disaster. With prices declining,
theres a high possibility that if you
cant make your payments, you will have
to sell the home for less than you owemaybe
a lot less.
There must be a way out.
You could take
an equity loans on your houseassuming
you have enough equity to make it worthwhile,
and that you can handle the equity loan payoff.
Although you could try a credit counseling agency,
and IRS inquiry in May, 2006, revealed that
the 41 so-called credit counselors they examined
were of virtually no benefit to consumers. Investigations
into other agencies are on-going.
I can always go bankrupt.
in federal bankruptcy law have made the procedure
so expensive that people in dire financial straits
cannot even afford the filing fees. While people
often think that declaring bankruptcy means
you can toss out your bills and just pay cash
until your credit rating improves, the new laws
demand a payback percentage to creditors. Credit
counseling is now mandatory, although the chances
are you will find yourself paying a bogus credit
counselor for nothing more than a checkmark
on your bankruptcy record that youve completed
There a Reasonable Solution?
about it. If you need more money to pay your
debts, then you simply need to make more money.
This doesnt mean you need to go out
and search for a new job in a crazy job market.
It simply means that you need another income
source to add to those you already have.
need to find a way to bring in extra income
without undue stress on yourself and your family.
You should still have some down time for relaxation.
If this sounds impossible, there is good news:
It can be done. Thousands of other people
have already proven it.
If you're determined
to get out of debt, a home-based business
is a viable method for generating a genuine
second income. Its a far cry from working
for peanuts at a night job in a retail store,
warehouse, or fast-food joint. Youll save
money on commute time and gas, and the only
equipment youll need is a computer and
Your first goal
will probably be to heave a huge sigh of relief
as you realize your balances are declining and
youre getting ahead. Like many others,
you may discover that you were always cut out
for running your own business and increasing
your personal wealth more every day. Your second
job could become so rewarding that you will
decide to make it your only job. Imagine working
from the comfort of your home, interacting with
people who started out just like you and are
now making fortunes.
The way to
financial solvencyeven wealth is
If you're ready
to pop that steadily swelling debt balloonready
to shape your future the way youve dreamed
it could beyou can begin right now.
Simply fill out the form and well send
you free, no-obligation information.