Month End: October Snapshot

At the end of this month, I was able to pay off another one of my credit cards. Slowly and consistently throughout this year my debt has reduced at a faster rate than the last time I was getting out of debt, and even faster than when I began blogging about Debt Free Me in 2015. Why is there such a difference this year versus previous years and attempts? Honestly, I can attribute it to two factors: My wife’s willingness to let me focus on paying my debt and removing distractions from paying my debt. The extra $350 a month that I’m committing toward my debt vs using it toward our budget is a key factor. Also, I’ve cut back on letting my time and energy be pulled in different directions. I’ve said no to situations, and don’t focus on income opportunities. No is a complete sentence. Am I sacrificing opportunities by not building my asset class? Yes, and I’m completely content saying no. This year has been a year of restoration for me. I’m thankful to my wife for her love and support, finally achieving the salary I’ve wanted, and the consistency of continuing to pay down my debt.

If you notice the amount above is the amount that is being paid toward the principal and doesn’t include the accrued interest. If you’re going to work toward being debt free, then pay more than just the minimum payment or the accrued interest. If you’ve practiced the self-lending principle, you can see how much interest compounding daily can be for your benefit on an income side, but also how much it takes away from the expense side. A good personal goal as you’re paying down debt is to set aside income. Saving money will create a margin and give you the ability to handle unforeseen events. I recommend saving three months’ worth of income as a long-term goal, and one month’s worth of income as a short-term goal. Saving can be challenging at times, so find someone you trust to help you stay committed to achieving this step. If you’re using a credit card, then continue to pay it off monthly. Personally, I have one credit card that I use and pay off monthly. Why? Because debit cards can become compromised, and if a debit card gets compromised then your banking account is compromised. Yes, you could carry cash, but if you have the discipline, use a credit card and pay it off monthly. Find a credit card that offers some form of reward incentive either points or cash back. Personally, I like a cash back rewards, and my wife prefers to use points, so she can use it toward discounted store purchases. Next month is Thanksgiving and I have a lot to be thankful for.

If you want to learn more about how I’m increasing my income while reducing debt, or if you want to have someone to discuss your debt reduction strategy with, or if you need a financial check-up, contact me.

Also, learn more about how I use the self-lending principle through Mustard Seed in the mustard seed section.

This month’s video is THE CURE TO LAZINESS (This could change your life) from the Mulligan Brothers YouTube channel.

“The LORD will send rain at the proper time from his rich treasury in the heavens and will bless all the work you do. You will lend to many nations, but you will never need to borrow from them.”

Deuteronomy 28:12 NLT‬‬

I believe in your journey to….

A Debt Free Me


October 5, 2016

Before you hire an outside party to distribute your product, think twice — they might be unnecessarily costing your business an arm and a leg. That’s the lesson Max Kater, CEO of Murchison-Hume, learned on this week’s episode of CNBC’s “The Profit.” Over the past few years, Kater had been using a convoluted process to get her fleet of upscale, nontoxic cleaning products — ranging from glass cleaners to dish soaps — from the factory floor to consumers’ hands. The business had been creating the product in Skokie, Illinois and then sending the product to a third-party logistics center in Dallas, Texas. This distance was costing the business an extra 50 cents per unit. Even though this amount seems insignificant; in the wholesale business it will add up. “Murchison-Hume, like any wholesaler, sells to retailers at twice its cost, meaning that the 50 cents turns into $1 by the time it gets to the retailer,” Lemonis explained. The retailer then marks up the product, so that $1 becomes $2 in the eyes of a customer. As a result, the price of Murchison-Hume’s product becomes $9. A price that will cause customers to pass on the product. To solve the problem, Lemonis suggested Kater work with a partner that manufactures, packages and distributes products all under one roof, streamlining the process and saving Kater an extra 50 cents on the cost of goods sold. This change creates a 22% savings to the customer which means a more affordable product. It’s important in business to not just price your product, but to properly price your product. It’s important to understand logistics and figure out how to improve processes. Ultimately it’s about how to properly manage working capital and more importantly manage human capital.

There’s a reason we are comfortable sacrificing it all to make our businesses a reality: We assume we’ll get a break tomorrow. To paraphrase Orphan Annie, tomorrow is always a day away–but meanwhile we could end up being useless to the very people we say we are sacrificing everything for. Consultant Alan Weiss calls this the Oxygen Mask Principle. If you’re in an emergency situation on an airplane, you are told to put your oxygen mask on first before assisting a less competent companion. He breaks it down in his podcast, The Way I See It:

You can’t help the client or your family, you can’t do pro bono work, you can’t help others in the profession, you can’t help anyone unless you yourself are comfortable. You need a healthy selfishness.

Rest is extremely important. If the human body was intended to work 24-7, then you wouldn’t see people with health issues or in some cases, die from exhaustion. Personally, I’ve taken on the habit of engaging in work 6 days a week, but I also take one day of rest. Rest for me may be going to church, sleeping, or doing some form of relaxing. I encourage you to make sure that you take the time to rest so that you can recharge and be more effective. Mr. Brown’s tactics to putting on his Oxygen Mask is to build in minimum viable days, create blank spaces in his schedule, and say “no” early and
often. Honoring the principle of rest will allow you to enjoy life more, and you’ll find that you’re still productive even with the rest.

If you’re in need of a financial checkup you can reach me in the contact me section.

For this week, I’ve included The Profit Principles with Marcus Lemonis from CNBC Prime YouTube channel.

“If you think you know it all, you’re a fool for sure; real survivors learn wisdom from others.” Proverbs