Want to be Debt FREE and have Financial Freedom???

This is a long post, but will worth the read!


Dave Ramsey Seminar….Total Money Makeover

Read Proverbs it has 31 chapters and it tells you how to be good stewards of your money.

This is the basic he told us last night…his website is http://www.daveramsey.com/ if you want more info.

Baby Step #1:

$1000 to start an Emergency Fund (time frame 1 to 1 ½ month) put it where you can get it, but not for Pizza! Prioritize!! In a 10 year period everyone will have a financial emergency!

Mutual Funds a one time investment of $1000 from age 25 to 65 at 6% will be $10,285 at 12% will be $93,050 and at 18% will be
$750,378

CUT UP CREDIT CARDS!!!

Open credit cards with a zero balance count against you as well as car pmts when you apply for a mortgage.

You do not need a credit card to rent a car, check into a hotel you can use you debit card!


Stay away from car payments drive reliable used cars. Save and pay cash!

Leasing a car is the most expensive way to finance a vehicle

Baby Step #2

Pay off your debt using the Debt Snowball

Quit borrowing more money!
You must save money!
Prayer really works!
Sell Something!
Part-time job or overtime (temporarily)

List you debts in ascending order with the smallest payoff balance to the largest. Don’t worry about interest rates or terms unless you have two debts that have similar payoffs, then list the higher interest rate first. (I am going to place a copy of this in the break-room if you want a copy)

Baby Step #3

3-6 months of expenses in savings

Emergency fund is insurance not an investment it must be easy to access or liquid. An emergency fund can turn a crisis into an inconvenience.

Money market accounts are easily accessible, often have no penalties for early withdrawals, and often have check writing privileges.

Baby Step #4

Invest 15% of household income into a Roth IRA and pre-tax retirement.

Compound interest is the key!

$100 per month from age 25 to 65 at 12% will be 1,176,477 from 30 to 70 years right at 6 million dollars

Start NOW!!


Diversification means to spread it around and it is a lower risk!

Mutual Funds are long term investments at least 5 years buy and forget it!

Invest:

25% in a growth and income fund
25% in a growth fund
25% in international funds
25% in aggressive growth funds


Baby Step #5

College fund…make sure your kids are fit too!

And Education Savings Account (ESA) or Education IRA, funded in a growth stock mutual fund is the best. $2000/year tax free

Research the cost of attending college.

The average college student graduates with $27,900 in student loan debt.

First rule of college…Pay Cash!

Savings bonds and pre-paid tuition not smart investments---the return rate is low

Baby Step #6

Pay off home early!!

You do not need the tax deduction! If you are debt free you can give to charitable organizations and help others and get the same deductions!

Best option a 15year fixed mortgage

Payments should be no more than 25% of your TAKE HOME PAY!

Written Workout Routine

Must have a cash flow plan.

A budget is when you say “Show Me The Money”

4 to 8 million dollars will flow through our hands by the time we retire!

A good cash flow plan should be a zero based plan. The envelope system is a practical tool. A written plan removes the management by crisis from your finances so the money works harder.

Give a budge 90 days to work for you:

Food
Utilities
House
Transportation
Clothes
Fun

Baby Step #7

Build wealth and give!

Wealth is not an escape Mechanism, it is a tremendous Responsibility!



If you live like no one else, later you can live like no one else!!