Debt Free For Life: The Finish Rich Plan for Financial Freedom

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9780385666251: Debt Free For Life: The Finish Rich Plan for Financial Freedom

The #1 bestselling author presents his most important book since The Automatic Millionaire and gives Canadians the knowledge, the tools, and the mindset to get out of debt — forever.

Whether you are working off student loans or trying to meet the minimum balance on your credit card bill, you are probably worried every time you open your mailbox. With salaries frozen and layoffs looming, how will you ever be able to pay down that debt, let alone retire in peace?

Here, David Bach offers a new philosophy made for our times, a paradigm-shifting approach to finance that teaches you how to pay down your debt and adopt a whole new way of living. If you have debt, you can be rich but still not free. When you pay down your debt, you reach Freedom Day, that glorious moment when you need a lot less money just to live. On that day, you are truly free. You can have a smaller nest egg and still retire, perhaps even earlier than you expected.

With his trademark motivational energy and take-action step by step advice, Bach helps you revolutionize your finances. In these lean times, it's still possible to live your financial dreams. Let David Bach show you how.

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About the Author:

DAVID BACH is the author of the runaway bestseller The Automatic Millionaire and the national bestsellers Go Green, Live Rich, Smart Women Finish Rich, Smart Couples Finish Rich, The Finish Rich Workbook, and the number one bestsellers, Start Late Finish Rich and The Automatic Millionaire Homeowner. His latest book is Fight for Your Money. Bach has appeared several times on The Oprah Winfrey Show to share his strategies for living and finishing rich, and in several episodes of the CNBC special, The Millionaire Inside. His FinishRich® seminars are the leading financial seminars in North America, having been taught by thousands of financial advisors to more than half a million people in more than 2,000 cities. He lives in New York and has a young son, Jack.

Excerpt. Reprinted by permission. All rights reserved.:

INTRODUCTION
 
 
 
GOODBYE, DEBT—HELLO, FREEDOM!
 
 
Early in the winter of 2010, I was sitting in the greenroom preparing to go on the NBC’s Today show to do our weekly “Money 911” segment. The segment had been airing for more than two years. Each week we would take questions from viewers about their money. This week, most of the questions seemed to be about debt. Reading over the questions, it hit me—in just two years, we had gone from being asked mainly about investments to being asked almost entirely about personal debt.
As I thought about this, a friend in the greenroom interrupted me with a question of her own. “David,” she asked, “what’s your take on ‘good debt’ vs. ‘bad debt’?”
Almost automatically, I started giving her the standard answer about how good debts are generally considered to be debts you incur to buy things that can go up in value—like a home or a college education—while bad debts are things like credit card balances, where you’ve borrowed money to buy things that will depreciate or go down in value, like most consumer goods. But then I stopped in mid-answer and looked at her.
“You know something?” I said. “The truth is that this recession has changed everything. Homes are going down in value and people with college degrees are looking for jobs. Forget what I was just telling you. Forget about the idea of ‘good debt’ and ‘bad debt.’ The truth is that when you’re in debt, it doesn’t
matter what you’ve borrowed the money for. The only thing that matters is whether or not you can afford to pay it back. And if you can’t, all debt is bad debt.”
My friend smiled sadly. “Tell me about it,” she said. ”My home is underwater, and my mortgage rate is going up and I can’t refinance because my credit score has dropped.” She shook her head and sighed.
“So what do I do? What’s your advice to people like me?”
 
 
 
THE BEST INVESTMENT YOU CAN MAKE NOW
 
 
This time I stopped and thought before answering. “Here’s what I think,” I finally said, “and this is what I’m going to be telling everyone now. The best investment you can make over the next five years is going to be paying off your debts. So my advice is to pay off what you owe as fast as you can. The faster you pay off your debt, the faster you will achieve financial freedom.”
I went on to tell my friend that at Morgan Stanley, where I had worked as a financial advisor for nearly a decade, the clients of ours who focused on paying off their debt were able to retire an average of ten years earlier than those who didn’t. “So does this mean I should stop putting money into my
401(k) plan and instead use it to pay off my mortgage?” she asked.
I shook my head. “Of course not,” I replied. “You should never stop ‘paying yourself first.’ What you need to do is cut down your spending so you can stop going into debt, and pay off your debt faster. Trust me—getting out of debt has never been more important than it is now. Being debt free for life should be your new financial goal.”
And with that I headed into the studio with Al Roker to answer America’s never-ending questions about managing their money and getting out of debt.
 
 
 
ARE YOU TIRED OF BEING IN DEBT? DO YOU WANT A NEW WAY OUT?
 
 
If you’re like most people, you’re probably familiar with the idea of “good debt” and “bad debt.” Millions of Americans believe in this idea. In fact, millions of Americans have based their lives on it. At the heart of this belief is the notion that good debt makes you rich and bad debt keeps you poor. You only borrow to buy assets, and you shouldn’t borrow to buy things that drop in value. It makes sense; it seems logical.
I, too, used to believe it. But you know what? I no longer do. And neither should you. Why? Because the idea that there’s such a thing as good debt and bad debt is a myth.
The truth is we’ve been misled.
 
 
· We’ve been misled by billions of dollars’ worth of advertising that gets us to buy things we don’t really need.
 
 
· We’ve been misled by a multibillion-dollar credit card industry that tells us the good life can be ours for the taking when we use their credit cards.
 
 
· We’ve been misled by the banks that loaned us money for homes they knew millions of us couldn’t really afford.
 
· We’ve been misled by the subprime lenders who promoted the idea that we were “silly” to keep equity in our homes when we could “cash it out” to pay off our credit cards.
  
· We’ve been misled by a tax system that promotes heavy borrowing by offering tax deductions.
 
 
· We were sold a bill of goods—or, more accurately, a bill of loans (trillions of dollars of them). And now this bill has come due, and our debt has become our personal financial prison.
 
 
Are you tired of being in debt? Are you tired of waking up each morning to face an ever larger pile of bills? Like my friend in the greenroom, do you find yourself working harder than ever to pay for things you no longer care about—or even want to own?
If so, you are not alone. Millions of people feel the same way—and like you, they are ready for a life free from debt. A life where you own your life—rather than lease it.
The good news is that there is a way out of this nightmare. There is a better way to live—starting today—a way that will allow you to be debt free for life!
 
 
 
THE MIRACLE OF COMPOUND INTEREST— IN REVERSE!
 
 
Here’s the truth: DEBT IS DEBT. Probably the most important lesson of the great recession we’ve just lived through is that there’s no such thing as a good debt if you can’t afford to pay it off. When you can’t make the payments, the only difference between “good” debts and “bad” debts is that the bad variety can destroy your financial life much more quickly.
Now, don’t get me wrong. We need to be able to borrow
money. Without a lending industry and the ability to borrow, we could not function as a society. Borrowing to build assets can make sense—if you have a real plan to repay your debt. But if you don’t have a plan, look out! Debt is all about basic math. It is the miracle of compound interest in reverse, which is to say that if you don’t stay on top of it, it will mushroom faster than you can imagine—and crush you before you know what’s happening.
This is one big reason why I wrote this book: to give you the plan you need to pay off your debts faster then you ever would have thought possible.
 
 
 
DEBT FREE FOR LIFE:
A NEW APPROACH AND A NEW ATTITUDE
 
 
It is time for us to rethink entirely the way we manage our money and our debt. If the great recession has taught us any- thing, it is that the less debt we have, the better off we are. With this in mind, I am now on a mission to inspire America to shed its debt. I believe it is time for us to buy back our freedom, and I know that together we can do it. This is another reason why I have written Debt Free For Life—and why I hope you will read it and act on its advice starting today.
Debt Free For Life is my twelfth book. It is very possible that you have read (or at least heard of) one of my previous titles. As I write this, there are more than 7 million copies of my FinishRich books in print around the world. I am known for my honest, simple, and “take action” advice about finances, and I’ve been privileged to inspire millions around the world to be smarter with their money and truly live a rich life. Per- haps you have seen me on television on NBC’s Today show,
“Money 911” segments, or on Oprah’s “Debt Diet” series, or on CNBC’s “The Millionaire Inside” series. Then again, maybe this is our first visit together—and if it is, welcome! In either case, I want to say, THANK YOU. Thank you for your time and your trust that I may have a plan for you—a plan that will make you DEBT FREE FOR LIFE!
 
 
 
ELIMINATE YOUR DEBT—
AND BUY BACK YOUR FREEDOM!
 
 
So why did I pick this moment to write a book on getting out of debt—and why should youspend a few hours reading it? Why is it time to buy back our freedom and focus on our ownper- sonal economy?
The answer is simple:
 
In our new economy, getting out of debt fast is the most important financial move you and your family can make.
 
 
There are three reasons for this:
 
 
First,  I believe that our debt is out of control.
 
Every day I get tons of questions from my readers—maybe you’re one of them—and most of them are related to debt. You email me at www.finishrich.com, you post at my community at www.facebook.com/davidbach, and you call in to the various shows I do. What I hear from you is scary. You’ve got credit card balances you can’t pay off, mortgage loans and home equity lines that are crushing you, student loans, car loans, medical debt—you name it. “David,” I hear over and over again, “I’m drowning—what in the world can I do?” Or: “David, I have had enough—I want to retire someday and
 
 
not be worried about money—how can I get out of debt once and for all?” The fact is that we’ve lost control of our debt both individually and as a nation—and this has to change. We have come to a point in history where personally, nationally, and even globally the devastating effect of debt is beginning not only to crush the human spirit, but also our ability to be free and ultimately secure.
 
 
Second, I believe the world is waking up to the problem of debt.
 
National economies around the globe have been shaken to their core because of debt loads. Europe fears more economic collapses—and many experts worry that the United States it- self is on the brink of bankruptcy. (I’m not there yet, but I am concerned—and you should be, too.) What I know for sure is that the debt we have the best chance of controlling is our own. There are dozens of books today about “whose fault it is.” But I’m not interested in playing the blame game. We can debate who’s to blame for America’s trillion-dollar deficits— or we can focus on our own families’ “deficits” and get our personal finances together. This book is about SOLUTIONS— what you can do to fix your situation! It’s about youyour finances—your debt! The faster you are debt free, the faster you will be protected from things you can’t control, like our national budget deficits.
 
 
Third, I am convinced that
MILLIONS ARE READY TO TAKE ACTION.
 
There is a movement in this country right now to pay down debt and save money. As I write this in the summer of 2010, savings rates are up to 6%, the highest in two decades, and debt levels are falling. Millions of people, including you, are ready to be debt free. We’ve had enough of the burden and worry that debt creates. You are ready to take action—smart action—that will help you become financially free and secure. Many of you have written to me, sharing that you are tired of working so hard for so long—and winding up with so little. You are ready to get off of the treadmill of going to work, making money, spending money, going to work, making money, spending money. You are ready to be FREE! You are ready for new ideas and new tools that will help you become smarter about your money and your debt. You are ready to be DEBT FREE FOR LIFE!
My previous books contained great tools for debt reduction. But in this new, challenging economy, I realized I needed to create a new, updated plan with the latest and greatest systems to help you get out of debt TODAY. So welcome! Let’s spend a few hours together—and get going on a new plan that will lead you to a debt-free world of true financial security. It may not be as easy to get out of debt as it was to get in, but trust me—the benefits that will come from this journey you’re about to begin will be more than worth the effort.
 
Do you believe as I do? Do these three beliefs of mine make sense to you at a gut level? If they do, then please keep reading. Together, we can turn back this tide of debt and buy back our futures. It is time for a better way of life—one free from debt.
 
  
 
MY GIFT TO YOU
 
 AT WWW.FINISHRICH.COM
 
I always love to give my readers a free gift. So if you are al- ready feeling inspired to live a debt-free life, I want to encourage you (right now!) to go online to my website at www. finishrich.com and join our FinishRich Community. Register and I will send you my Debt Free For Life Challenge video series for free—and also give you access to an amazing array of tools we’ve designed to help you stay motivated to get out of debt.
Through our website, you can access “The David Bach Debt Free Challenge” site, an online community where you can interact with like-minded people committed to becoming debt free. Our goal is to inspire one million people to join us on this challenge. On the website, you’ll find videos, audios, and interviews with me and other experts to help you live debt free for life. You’ll also find contests you can enter to win prizes.
This book also comes with another gift: a free trial of an amazing new debt-reduction system called Debt Wise (www.debtwise.com) that I’ll talk more about later. This revolutionary online tool will help you reduce your debt by creating a FAST-PAY PLAN to pay off your loans years early and save you thousands of dollars in interest charges. It is powered by Equifax, the nation’s leading credit bureau—and as part of the package, you’ll also get access to an Equifax credit score.
 

 
THE DEBT FREE FOR LIFE CHALLENGE VIDEO SERIES
 
 

 
 
SHARE YOUR SUCCESS STORIES—
AND YOUR QUESTIONS
 
 
As always, I want to hear from you about how this book affected your life. This book includes real success stories from real people who have achieved the results you m...

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