Too much debt can steal your wealth.

Restored from the Empower Network archive (2011–2017), lightly edited to meet our current advertising standards. Views are the original author’s.

Too much debt can steal your wealth.

Using Credit and Taking on Debt

Let’s take a look at consumer debt.  It seems everywhere we look, credit is being offered to make purchases for just about anything we can buy.  Financing is being offered, even for everyday things like furniture and consumables.  Using credit to make purchases for everything can actually work against you and, although you may benefit from lower payments today, using credit can actually be stealing your future wealth.

We’ve all heard about the power of compound interest.  It is indeed a very powerful force.  Even the Albert Einstein has been quoted as saying, “the most powerful force in the universe that I know of is compound interest”.

Using credit needs to be done with care.  And being careless can get you in big trouble very quickly.  Why?  Because the cards are stacked against you.  If you use credit to purchase an item and do not repay the balance on your credit card immediately, that item will cost more than what you intended to pay for it.  It’s that simple.

For the undisciplined, using credit only does one thing.  It makes everything that you buy cost more.  It will cost you the price of the item plus interest.  How can you increase your wealth while you’re paying all this interest?

We are led to believe they using credit will enhance our lifestyle because it allows for lower monthly payments.  But in reality you are actually reducing your lifestyle in the long run.  The balance plus interest which you do not pay today will need to be repaid in the future.

Take for example, two people, earning the same income.  One of the two uses credit for everything and the other pays for everything using cash only.  The person using credit may well appear to be living in much more luxurious lifestyle, but in reality his net worth will be less than the person the only uses cash.  Th person paying cash only will makes purchases based on what his income is.  Using credit to make all your purchases can only diminish your lifestyle.  It may appear to enhance your lifestyle but it soon becomes a ball and chain that can destroy your financial future.  It is very similar to the tortoise vs the hare race.

Credit card companies rely on the fact that you’re illusioned into believing that you’re getting ahead, making the low monthly payments for what you want.  But you’re actually falling behind with every passing day.  Over-using credit isn’t about gaining, it’s about losing.  Or more precisely, it’s about your creditors gaining and you losing.

In the long run it all boils down to wealth and how we should define it.  There are many categories of wealth.  Since this article deals with financial wealth we’ll only talk about financial or monetary wealth.  The best and most accurate way of defining monetary wealth is owning a valuable assets.  Notice that I said owning a valuable assets and not driving valuable assets or wearing valuable assets or living in a valuable assets.

If you have a debt on every asset that you own, you are only earning money to pay back of those debts plus interest.  With time and if you don’t reel in your debt, you’ll only be to working to try and keep ahead of of the interest.  And that often turns out to be a losing battle with for many.

So how do you get out of debt?

The only way to eliminate that is to first tabulate all of your debts and decide once and for all to pay them off one by one.  Committing to getting out of and staying out of debt is a big part of the battle.  Get your spouse on board with you and commit.  Once you’ve decided which debt you want to eliminate first, make only the minimum payments to every other debt and concentrate all your efforts contributing as much available cash on paying back the the first debt to be eliminated.

Once paid off, cancel the credit card or line of credit and which came with a debt.  Then move on to the next credit card which you’ve decided to eliminate.

Keep in mind that this may take a few years.  But it is the only way to get rid of all your debts.  Also, try not to accrue any other debts when you free up a little bit of credit.  It may be all too tempting to get comfortable and start making purchases on credit which you cannot afford.  Understand that making purchases on credit is what got you deep into debt in the first place.

For more tips on How to Reduce Debt, check out the site:http://hometipsandideas.wordpress.com/2012/08/07/how-to-reduce-debt/

Earning more income.

In order to pay off your debt more quickly, you may decide that it would be a good idea to earn more income.  This is probably a good idea.  There are many ways of earning more income to pay off your debts at the end of the month.  You may decide to take on the another job, advertise your services for hire part time or you may wish to look into earning money online.  A fantastic way of earning more money is to open a merchant account online and start earning commission through online marketing.  But this is a lot easier said than done.

By now, you may realize some that the page you are on has a fantastic opportunity advertised on it.  This is not a coincidence, as many individuals have found a way to increase their monthly income quite dramatically through the Empower Network.  With a little bit of effort, the Empower Network opportunity and can earn you enough income to not only eliminate your debt, but to also change your financial future for the better.

For more information on how to get started with the Empower Network, click the big yellow “Join Now” button above or to the right of this column.  You will certainly not be disappointed with the income potential.