Business & Financial
How & Why To Earn 18% On Your Moneyby John Fuhrman
What would it be like to earn the kind of interest that only the big-time investors get? Imagine not only earning that type of return but also gaining total control over your finances. The feeling that would create is something that may not have happened to you for a very long time. The beauty is, it’s simple and best of all, risk free.
Pay extra.
That’s right. The next time you make a credit card payment, pay more than the minimum. Since credit card companies charge interest on the unpaid balance, anything that you send them over and above the minimum monthly payment goes directly to your balance. That means you won’t pay interest on that money ever again. Whatever rate you’re being charged will be the rate your extra payment money would be earning. But, that’s just one part of the bonus.
If all you do is pay the minimum payment month in and month out, the lending institution can project how much money you’ll make for them as well as how long they’ll have you tied to them. By simply sending in even a little extra, you foul up their plans. They can no longer project their earnings from you. Nor can they say how long you’ll be under their thumb. You gain total control over your financial future.
Here’s how it works. Suppose you had a choice of sending in an extra $50 on a credit card that is charging 18% interest. (I know that there are lower rate cards as well as those charging over 20%. Follow the principle rather than think you’re better off because your interest rate is less.) Paying that $50 goes directly to the balance without finance charges being deducted. That means you’ll have a lower balance to pay interest on. Which means the extra money you sent in is actually earning you the savings you’ll realize over the life of the debt.
When that happens, you, rather than an institution, can plan your future. You get to decide when you become financially free. You create your own future rather than just letting what comes along happen to you. You actually take one of the first steps toward building a solid financial future for yourself. The difference between most people and those who are wealthy is that the financially secure person decides the rules regarding their money, not some bank. In fact, you can roughly figure out how soon you’ll pay off the bill by simply dividing the extra payment into the balance. While the note will actually be paid off a bit sooner because of your minimum payment plus the extra, you’ll have a rough idea. (Compared to absolutely no idea if you just pay the minimum.)
By sending in more than the minimum, you’ve made that same decision. You can plan your future rather than have it just happen to you. With a little bit of work you can actually project when you’ll be free of debt and in total control of your finances and your security. Once you’ve begun getting control, you’ll be amazed at how your creativity takes over and you actually spend time thinking about ways to pay things off early rather than panicking about how to make ends meet.
That’s exactly why I became committed to developing The Credit Dietã program and book. I wanted people to discover the possibility of financial freedom without having to give up having a life. My desire and goal was to share how people could eliminate debt without budgets and major sacrifices. And, just like any diet, the gradual success is what ends up being long-term.
Financial freedom is a powerful place to be. Not because it does any one thing that you can put your finger on but rather because it gives an individual options. Once you’ve reached a level where you really are working for yourself and your family (rather than to keep up with your debts), you can decide whether you need to work a few extra hours this week, attend a recital, sports event, or other happening that someone in your family will be participating in.
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John Fuhrman is the author of the new book THE CREDIT DIET - How To Shed Unwanted Debt ANd Achieve Fiscal Fitness to be published by John Wiley & Sons, Inc. of New York. He is an award winning speaker and his programs focus on helping people achieve fin
