SRS Darketernal asks for help (Please review my Debt Solving solutions) (superlong) =)

Discussion in 'On Topic' started by Darketernal, Jul 24, 2005.

  1. Darketernal

    Darketernal Watch: Aria The Origination =)

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    Care,for all is like a bonsai tree
    Dear reader,

    Grab a cup of coffee ,This is an extremely long debt page that is designed to become a sticky, as it is version 1.0 the asylum would like your input on it. Since its so extremely long , you might just want to comment on certain pieces or the entire thing,

    Tell me your feelings about it, any feedback will be greatly appreciated. When the review is done it will be pulled up as a sticky: Here we go :wavey:

    (thanks for the Hudson thread for the submitted information to help people from their debts )


    The Laws of Debt Solving.
    http://www.brillig.com/debt_clock/

    Laws.

    1. Never lend money.
    (if you want to prevent/solve debts, then lending money is forbidden under any circumstances, the rule is if you can't buy it directly and having money to spare then you shouldn't buy it at all. This includes houses,cars or even vacations and other big expenses)

    2. Twist ever penny 3 times.
    (its grandmother's advice, but its true.Its better not to be greedy but you will have to submit when you have 10k or more to solve. Making a penny count 3 times its value, and thinking 3 times before you waste your money on something will ensure wether you really need this object or not.


    3. Do NOT buy what you NOT need.
    ( You will save money by avoiding buying unnecessary things,search for alternatives. Also try to get things second hand or for bargain prices, again only buy those things you really really need.)

    4.There is only one place where money belongs, namely in YOUR wallet.
    (its of little use to look at other people's situations (grass greener parabel) organise your own financial health, and make sure money flows into your wallet.

    5.Do NOT invest money you CANNOT afford to lose.
    If you are not able to survive the possible ' nightmare scenario ' into something that you invested your money in , DO NOT DO IT, in none of these cases you shall gamble that ' it'll be alright' because you'll be on the streets if you end up in a bankrupcy ,its NEVER worth the gamble.

    6. Time erodes financial pain.
    In every case Its best to pay direct, but when you have a debt, you want to spread it as much as possible over time to give yourself as much breathing space as possible and buying yourself time to put everyting in work that you can to solve the current financial problems that you have.

    7. Preventing money crisis is better then healing from it.
    Once in a debt its a matter of long breathe to get out , be a better person and stay out of it.

    8. Positive outflow
    Money is much like water in a sink. Prevent water from going down the drain by putting a lit on the sink.Therefore every money outflow is like a roof leaking water, and must be reduces by fixing the holes , and the more water (money) that is flowing in from the faucet by opening and the less drainage or leaking that is taking place, the easier the sink (your wallet) will be filled and will eventually overflow (being rich). This means that the money that comes in must always be higher then the money that flows out.

    9. Shred your cred.
    When you start feeling uneasy and are in a difficult financial situation and having money issues, grab the scissor from your drawer and (i mean it) cut your creditcard in half. For It's true you must LEARN to FEEL the value of money.Ever made a big buy and Noticed how easy it is to lose 5000$ or more within 1 minute, try drawing and giving away the same

    10. Don't live on big feet.
    This is especially what is wrong with nowaday goverments, they spend more then they have. The result? Poverty and debt as you could see in the top link,it's totally irrisponsible,dispicable and wrong. Every government/individual should have a PROFIT goal, and not shift its problems on other following governments/individuals by spending more then they can afford and putting your load on other people. The United States debt comes down to that every american is in 26k debt, being in debt should be outlawed in some sort of amendment but until this time comes i hope the above tips will prevent you from falling of the financial clifs.

    Poverty/wealth

    What makes one person eat from the streets having 10k debt and another person singing in a hot jacuzzi earning 100k each year along with a wiskey coctail in the hand? As such why a government can pretend to be rich, but will pass the penalty to another generation.

    There is nothing magical about being rich or poor for that matter ,its all based on principles.Wether it be the government reading this or an individual with debt problems makes no difference. I want to make it clear that Loving and helping people is infinite more important then money, but since so many people struggle with Financial problems i say we go straight to the debt solving solutions.


    The 2/3 method.

    This is my personal method of debt solving. In which 2/3 of the income that you receive will goto debt solvement/savings, and 1/3 to livelyhood or possible investments.Obviously the bigger the debt the harder it is to get out.

    Let's start throwing some figures a 10k debt is imaginable , we go out that your conditions are poor and that you earn a max of 17k a year.

    17k / 1 year over 12 months is earning roughly 1400 dollar a month. Now take 2/3 of that amount that's roughly 900 dollar a month.

    10k debt devided by 900 dollars a month , will mean that you will spend a bit more then 11 months into solving,depending on what source you got your loan from,bank or possible friends/family.

    1/3

    Now its imaginable that you cannot afford to save 900$ each month , reduce it to 1/3 and pay of 450. This will double the time that you can pay off your bills ,but wait there's a catch. It will be almost 2 years before you have solved your 10k debt, and that's not a place you want to be. You want to get rid of that backpack of stones on your back asap. Therefore in this time you have to search for additional resources/jobs (not extra debts) If you have a 40 hour job , go work black(not paying taxes) in the weekends. Of course it contains a risk but you will earn a lot of money that can help you solve your debt. This won't damage the government because you already payed your tax with the 40 hour job. When you get cought however this might result in quite a financial penalty so beware of that, or don't take the risk and get a normal weekend job, or extend the amount of work that you do with your current boss to 56 hours a week.

    Increasing your money range and extending the 1/3 to a higher 2/3 will result in a faster debt solvement.

    The leaking roof.

    The typical person who spends all his money has a shed full of junk that you don't even need for livelyhood. This waste of money creates gaps into your financial situation which must be secured. The money flows out to all kinds of wastefull things , i know its not nice but every penny must be examed.

    -Primairy items.

    -Food

    Food is a big one, we spend a lot of money on it. And can save a lot of money on it too. Candy/cookies/ice-cream everything that you feel that is unecessary should be left out.
    Calculate what you spend on food, you get a receipt when you walk out of the supermarktet,
    examine this every weekend, and take notes off what you spend , and what can go off the list.

    -Electricity.

    Almost everything runs on electricity, although its corny and not nice. Buy yourself light saving bulbs for your house, although they cost a lot, you save your enviroment and you save hundreds of dollars on yearly basis and will make a profit on long term basis.

    -Water

    We all need water every day, if you look at the bill you get you might not like what you see. Invest in water saving shower heads. Stay hygienic however, although you are poor you should always remain to be representative and clean. See where you can save water as it can save you money.

    -Gas

    Get yourself a high output kettle for heating your house , this will reduce gas usage enormously , although a big investment in the beginning, it will save you hundreds of dollars on gas on the long term, its very hard and your house won't be cozy but maby setting the kettle a few degrees lower and putting on some extra clothes will save you money.

    -Roof

    What house are you living in, are you sure you don't live in a house/appartment in which the rent/mortgage isn't too high? You might be living in a colden cage , housed but not being able to do anything in your life. Where do you live, could you move to an area that is close to the city but has less expenses too? Usually villages/towns that lie just outside the city don't cost half as much, bring you peace and quiet, and give you all the luxery of having a big city that has everything within your vacinity as well as jobs and oppertunities that can benefit your financial situation enormously, the only downfall could be the traffic jams, but if public transport is reliable you can make usage of that and will save you costs also.


    Secondary Items.

    -Alcohol/sigarettes/drugs/other unecessary items

    Throw these all away, when you count them up it will save you litterary hundreds of dollars each month, and maby 1k or 2k on a yearly basis. Which can be used to solve your debts. Forget vacation, go work during the hollydays , its a restraint but you are in a pickle so you are forced to obtain resources and money. Those who are having trouble getting rid of their addiction visit the road to recovery subforum for help.

    -The Car

    You probably need your car, if you don't you might consider selling it. Gas prices and car maintanance costs can be very high, its hard to do groceries without one however. And its only a legit thing to do if the car costs too much , or if you are able to get to your job on your bike or walking.

    -refrigirators/televisions/washing machines/dryers

    All these things break in a certain amount of time, its important on all these products to do a research on, buy a machine product brand name that is bought by the majority of the people, these are usually (not always) the most reliable and most durable , the internet is great search for pricewatch tables, these compare simular products for a cheaper price, however service is not always garanteed, but you can always watch the comments of other customers that bought this product before you and view their opinion on it, although every opinion is exactly that , an opinion it can be benefitial to your understanding of the quality of the product. Again buy a high output machine, that saves either water/electricity/cash , look at the product does it have everything you want on it, and does it look robuust or asif it will fall apart really quickly. Read the reviews and you will see usually in stars wether people like it or not,and try to form an opinion on that.

    -The Cellphone

    Throw it away and use a normal telephone , if you hardly use your cellphone the more reason to get rid of it, same counts for a t.v ,although most people can't live without one, it absorbs time money, the typical guy that calls his wife in the supermarket to ask her what he should buy. Make a note at home with a pen instead and stop making unneccesary calls. Honestly you will find peace when people aren't calling you all the time, and only inform you on things at home, get a cheap subscription for your normal phone, again search for a reliable provider.

    Big Debt solving 50k/70k debt

    The bigger the debt the more desperate and defensive the strategy's become. We go out from a situation that the leaking elements have been solved by applying the money saving methods of above , however at this time the debt applicants are pounding on your door, and want to see money. Using every exuse from the book to keep them at bay, and saying thing that the money will come soon, and other things they want to hear ,so to buy you some time, closing your door and pretending your not home are a few fearfull methods. Of course the situations is unbearable. Selling your car is a valid option, lets say you get 15 k for your old car, you might be able to pay of the remaining 30 to 50k in 5 years if you work 100 hours a week. It might be handy to lend 5k from a family member, who doesn't ask interest rates. And pay that person back in episodes that won't last longer then 14 months, otherwhise that member really could begin starting to hate you, and if you manage to take the deep breathe that was required and get out of this horrible situation you will have a life lesson enough to understand why you should NEVER be in a debt situation.

    Hard Debt solving 90/120k or higher debts.

    Flee your country and get yourself a new identity, it will be the biggest skeleton imaginable in the closet,stop contacting your family, and remain in a underdog position for the rest of your life. Escape from your debt applicants by fleeing to continents like Africa ,south america, or possibly with a new identity they won't find you in the country of china amongst 3 billion chinese people :hs: ,Europe is not a good idea as America/Europe tightly cooperate with eachother on exchanging information. but unless you sell your entire house(if you have one) You won't be able to pay off the debt within one lifetime so why waste your life on it. Unless you marry a very rich person who is willing to pay your debt, this amount of money for a person with a normal salary will not be solvable , even if you could spare 900$ each month, you would be stick to the debt for the oncoming 10 years biting on a piece of wood. This points out that there's a certain (drowning) point where you sink and you can't get out. Its not nice for the people you have duped with the loss of money, but at least they will most likely survive it. If you manage to get out , you never want to have debts again, and hopefully will spend your days in monaco in the sunshine doing a tourist job, which gives you just enough money to survive from day to day.

    A Final warning

    Watch out for leeches. When your ships is sinking financially,don't think that people want the best for you, there are a lot of 'so called' people who advice you to put your money into their hands. DO NOT DO THIS, always be in control of your own life, i've seen cases where people in deep financial trouble where willing to give their money away to 'unknown' institutions, whereas following the authority was given to those institutions and they runned away with their savings and the institutions mysteriously dissapeared and a phone that was dead was the only thing left, leaving the dupees with another additional 50k debt or higher, so you have been warned.

    Links.

    http://www.pueblo.gsa.gov/cic_text/money/66ways/
    http://www.christiandebtsolutions.org/debtload.htm
    http://www.creditcarecenter.com/mnymgt/money_management.htm
    http://www.creditcarecenter.com/mnymgt/money_management.htm
    http://moneycentral.msn.com/banking...asp?iSearchId=7
    https://www.chasecreditcard.com/Tem...msformat=normal


    (Additional information)

    Debt and Money.

    Credit ,and many thanks to (hudson, (movement) for providing this to the asylum

    This subject may not seem appropriate for the asylum. But bad personal finances have the capability to do everything from simply causing stress to destroying marriages. So hopefully these thoughts will help a few people in here. The reason why i'm posting this here is to hopefully help some people who are stressing out, or are depressed because of their money situation.

    As a disclaimer, not all of these words are my own, most of it is common sense, some of it is mine, and some of it I learned from Dave Ramsey (www.daveramsey.com)

    There are a lot of misconceptions about money in this country. All of my life I was exposed to debt. Credit card offers. Cheap car loans. 30 year and 0% down mortgages. The lending business is huge. And we Americans consume debt like we consume food, just look at the average credit card debt the average person carries, and look at the bankruptcy rate. It’s just insane.

    Personal finances are actually very easy. Dave can be quoted as saying its 80% behavior and 20% math, or something to that affect, and he’s right. People get too tied up in the way they behave with money, and make bad decisions with it. I certainly have. The same with 99% of the population. If somebody tells you they have never made a mistake with money then they either don’t have any, or are lying.

    Here is a simple guideline when dealing with your money.

    Budget,
    Don’t live beyond your mean
    Save and invest

    Credit Cards

    People have all sorts of excuses for using credit cards. Almost all of it is crap.
    I don’t think you’re stupid if you use them, but it doesn’t fit with me. If you can manage your money properly and still use them. More power to you, but for the average American, they are just too much of a temptation.

    Security: I use credit cards because they are more secure
    Well all I can say is http://news.com.com/Lost+credit+dat..._3-5753557.html

    Same as cash: I take advantage of 0% financing, then it’s the same as cash.

    No it’s not the same as cash. Cash is cash, credit is credit. They are counting on you making mistakes, just like every other human. Then bam they hit you with fee’s and interest.

    Pay it off: I pay it off at the end of the month.

    Then why not use cash?

    Building Credit: I want to build up my credit rating?

    Then I would ask why? So you can get more debt? Buy a house? I don’t want any more debt. And if I want to buy a house, I’ll shop for a mortgage broker that does manual underwriting.


    Housing.

    A lot of people buy a house when they are unprepared to do so. I’m guilty of it and can attest to the stress and depression of doing so. Now I’m a firm believer that owning is always better then renting, however owning something you can’t afford is a curse. Here are some ideas to successfully owning your own home.

    Get out of debt: I can’t stress this one enough. When you have debt, money that can be used for repairs or building equity is tied up someplace else, you need it free.

    Not having cash reserves: not having any money saved up can be very problematic. What happens when you move in realize you need a new fridge? Or a tree falls and damages your roof? Soon you in debt up to your ears and your stress level is rising. May seem far fetched, but it happens more often then you’d think.

    0% down: Don’t do it. Always put down a down payment, as big of one as you can. The house will end up costing you less, and if you put enough down you won’t have to pay for PMI (depending on the lender)

    Living in to much house: Keep your mortgage payment reasonable. A house you can’t afford is not a home, it’s a curse.

    Pay extra: Every extra dollar you put on the principal reduces the amount of interest you pay, and gets you the house quicker.


    Cars

    I learned a long time ago that I hate car payments. So I don’t drive expensive cars, I pay cash for them. I would be ok with financing a car provided that I could budget and pay it off in a year or less. The advantage to this is I can save more money and own outright a nicer car as the years go buy. Cars drive better when you hold the title instead of the bank.

    I see a lot of people around me talking about their car payments, 200, 300, 400 even 500 bucks a month. Why do you need a car that’s expensive like that? To impress people? A buddy of mine who bought a new caddy said it’s for reliability. His payments were 400 bucks a month, or 4800 bucks a year. My truck cost me that much outright, and in the 5 years I’ve had it I haven’t put half of that in it in repairs and maintenance. It’s not worth it, find a good compound interest calculator and see how much that money could be worth if it was properly invested.

    I’m not saying you shouldn’t have a good car, but so many people have cars they can’t afford and are throwing away money. Even if I wanted, and could pay cash for a 05 caddie, I wouldn’t do it, I’d pay cash on the 03 and save a few thousand bucks.

    Don’t even get me started on leasing (as quoted by Dave, fleasing)


    The right track.

    Winning financially isn’t rocket science. As I’ve stated before its more about behavior then it is about math. Dave Ramsey has established what he calls Baby Steps to financial peace (http://www.daveramsey.com/etc/cms/i...tContentID=2867). And it does work. May seem illogical to some, but it does work in the long run.

    The first thing you need to do is sit down with your spouse if your married, or by yourself if your not. Turn off the TV and grab your bills, and get a good picture of what your current situation is. If you’re behind on one of the following get them current NOW.

    Your home, your utilities, your car. And keep them current always.

    After that’s done, you need to list your debts smallest to largest. Except your mortgage (I’ll explain latter)

    And you need to come up with a tight written budget. Every buck you make should have a name on it. Even if that name is savings. Your balance at the end of the budget should be 0.00 not 0.01 or -0.01. This budget should be prioritized properly. Food should be first, then utilities then your house. Not master card first, not visa. And once you have this budget, follow it. It may take a few months to get it right, but you have to know ahead of time where your money is going.

    Make sure you budget to get 1000 bucks in savings as quickly as you possibly can. This will be the start of your emergency fund.

    After you get your 1000 bucks in savings its time to get out of debt. Take your list of debts and work on the smallest to largest. Get really insane about getting out of debt. Reduce luxuries and put the savings on the debt. Pick up part time jobs, and put every cent on the debts smallest to largest. If you can sell something do it. Find anything you can to get the debts gone. Some people disagree with this approach, and the reason it works for me is mental. I see the debts getting paid off and it pumps me up to get even more aggressive. You’d be surprised how quickly you can get your debts paid off. And once they are gone, don’t let them come back. This will be hard, you will be tired, you will want to quite, but one your debt free, it feels so good to see your money do what you want it to and not just go to creditors.

    After you are debt free except your home its time to go back to that 1000 bucks. Look at your budget and see what your expenses are and add them up. Build that 1000 up to 3-6 times your expenses. That way if you lose your job, you can live. This money should be kept in something like a money market account with check writing privileges. This money is not for buying groceries, or going to the movies. This money is to be used ONLY for unbudgeted Emergency’s.

    Once that’s build up, start investing for retirement, work on paying your home off early. And start building wealth and have some fun with your money.

    Credit ,and many thanks to (Dave Steel) for providing this to the asylum

    There are many paths that different people follow that lead to the same highway of financial stability.This is what worked for me...

    1. Share what you have with the poor, (just being on-line is proof of that we have more then most.)

    2. If you use a charge card, have the resources to pay the balance at the end of the month. Use a rewards card and get stuff for free.
    http://www.google.com/search?client...=UTF-8&oe=UTF-8


    3. Have an emergency fund that represents about 8 months net pay.

    4. Have excellent credit so when you borrow money you get the lowest rate. (I just got a new Subaru through cars.com, I had the auto loan in 5 minutes at the lowest rate out-there.)

    If a person is just starting out on their own, live cheaply, buy used stuff. I now a guy that said..."It's not how much you make, it's how much you save". Save for a major down-payment on a home, or rent and invest the difference otherwise inflation will own you. Frugality has many rewards.

    Hope this will help.
     
    Last edited: Jul 26, 2005
  2. Darketernal

    Darketernal Watch: Aria The Origination =)

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    Post your critics :wavey:
     
  3. coma

    coma New Member

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    Law 2 "twist every penny 3 times." Never heard of that and WTF does it mean?
     
  4. Nightshade

    Nightshade New Member

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    nice post!!

    I like it!! :big grin:
     
  5. Darketernal

    Darketernal Watch: Aria The Origination =)

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    Care,for all is like a bonsai tree
    twisting a penny means making a penny count 3 times its value, and thinking 3 times before you waste your money on something.

    tnx nightshade.
     
  6. dave steel

    dave steel My Kung Fu is the best.

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    Darketernal, thanks for putting this up. This is a topic for every generation. There are many paths that different people follow that lead to the same highway of financial stability. I have gone down the wrong road several times, but I eventually made it to the main highway. So I think this topic is somewhat subjective, in that we all have our own way that leads to financial stability. So this is what worked for me...
    1. Share what you have with the poor, (just being on-line is proof of that we have more then most.)

    2. If you use a charge card, have the resources to pay the balance at the end of the month. Use a rewards card and get stuff for free.
    http://www.google.com/search?client=safari&rls=en-us&q=mbna+rewards+card&ie=UTF-8&oe=UTF-8


    3. Have an emergency fund that represents about 8 months net pay.

    4. Have excellent credit so when you borrow money you get the lowest rate. (I just got a new Subaru through cars.com, I had the auto loan in 5 minutes at the lowest rate out-there.)

    If a person is just starting out on their own, live cheaply, buy used stuff. I now a guy that said..."It's not how much you make, it's how much you save". Save for a major down-payment on a home, or rent and invest the difference otherwise inflation will own you. Frugality has many rewards.
     

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