One of the main goals for the 1st quarter, was to free my self of all DEBT in three months. Some people spend years trying to accomplish this task, so I figured I do everything else so fast, why not three months. So lets start with the basics; How debt much do I have?
The amount of debt;
The amount of debt can be a scary place, but we all have to go there sometime in our lifetime, if you want to get to a place of security. Whether it is 1K, 10k, 100k, or even one million dollars. You have to know where to start to attack the beast we are about to kill. Since I am the iDEAL candidate, lets start with me. Including Student Loans (Masters in IT), Current Projects (Business Loans), Cars, Houses (Primary Residence), and misc Credit Cards & Loans, lets say I am at 250K in the hole. Sounds like a lot huh? It really is not, if you know how to manage it.
Quick Wins;
Some people like to use the term “Good Debt”, but there’s no such thing as “GOOD debt”. Either it brings income or it is a expense, period. So let’s break it down; How can we turn some of the debt we have into positive income or wiped out clean.
Micro-Small Business- There are many ways to start one of these types of business, if you are willing to do some of the hard upfront work. (notice I said “work” not money). A Micro-small business, would be a small business that takes less than 30 minutes a day to complete and bring in at least 500 month. Some ways of completed this task is to start a blog around a specific topic or area, then charge for ad space or just let Google do it for you. Another way is start a eBay business, or cut hair, or even lawns….it doesn’t even matter. The key thing here is start something small to with little effort to pay down debt.
The quick win is just the starting point, I started a Micro-Small Business in High as sophomore, selling mix-tapes on called pEatrick (the E stand for Entertainment). In college I had one of the most profitable eBay businesses in the history of the internet, in one month I made over 25k. At the same time I was young and stupid and brought Nike’s, and throwbacks when I should have been investing. Now, I have learn from those mistakes and use my “Quick-Win” or Micro-Small business to help pay down debt, or better yet invest in other opportunities that I may come across.
Ok, lets say you have your “quick win” set up in place, but you still want to wipe out your debt, quick and fast. Well in today’s market you have to fast and knowledgeable about changes that are happening right tin front of your face. I don’t called this site iDEAL Pat hill for no reason, let me tell you how I did it, in only 3 months (well a month and a half).
In Charlotte area, there are few areas left in the real estate market that are still turning over a profit. (Yes, and in all cities, you just have to find them). In this area, homes that are remodeled can sell for about 400k. So, I notice the trend, researched it, studied it, and acted on it. Purchased a home for about 100k, added about 70k in renovations, bada bing bada boom!, I have house that I can sell in this market for about 275k and later for 400k+. Now, if you do the math, that’s about 105k in profits, and if you remember, I started with 250k in debt, so I am only half way there. I have about 145K to go, which really leaves my current house.
The smart thing would be to rent out my current home for at least 200.00 per month over the current mortgage, or even sell it, depends on the situation and market value. For shits and giggles lets say, I will rent it out, and move into the new home. At that point in time is when I have eliminated all my debts, by Acquiring Assets of Value. Let me explain; the equity in the new home wipes out my Student loans, and any other small debt with lenders such as credit cards etc. The remaining 145k is wipe clean because the rental property I own, because now it becomes an asset and no longer a debt.(Also, the Rental property becomes a tax write-off)
Now, don’t get me wrong, this may sound easy, but it takes a lot of hard work (plus other factors such as credit scores etc). Now some folks may believe that there may be may flaws with this rationale of thinking, but one thing I have always trusted is the notion of “if you believe you have won, then you have already won”. If I can do it, so can you. Last, but not least, becoming debt free doesn’t take that long to do. In all due respect, it only takes 3 months. Becoming wealthy and having all liquid assests and not just assets of valuse is another story.
Sometime between the time of December 2009 and January 2010, I took a little time to reflect on how I will improve myself this year and become one more step to my goal of becoming pretty much the ultimate brand. At the bottom is one of the photos I took myself and edited as well, and one day soon I get the prints produced for wall size hanging. Other than that, there seems to be a lot of things to be accomplished, in only a sort amount of time. How could I start, you asked?
Most success come with a small tad of luck and timing. Just like monopoly, I still must roll dice, go around the board, stack my chips, look for investments, and opportunities that are available. As long as I “stay in the game” as Jim Cramer would say, one day I will land on the correct properties (a.k.a brands & companies), buy them, mold them, and innovate them. The 1st goal of the year with a 3 month time line is to be come totally debt free though acquiring assets of value. Stay tuned.
