Six Essential (and EASY) Steps to Eliminating Your Debt and Getting Richer by Robert Kiyosaki

How to Get Out of Debt and Get Richer in 2019

Getting out of debt and getting richer is easier than you think…but it takes a plan

Welcome to 2019. I hope you, your family, and your loved ones had a great holiday. If you’re like me and you read a lot of financial advice, some good and some really bad, you’ve probably noticed a trend. Everywhere you turn there seems to be an article about how to save more money in 2019.

If you’re a regular Rich Dad reader, you know how I feel about savers. Savers are losers, not personally but financially. The way the economy is built is not to favor savors but rather to favor those who use debt to get rich.

Of course, when I say use debt, I mean good debt, not bad debt. There is a huge difference. Simply put, good debt is debt that can be used to put money in your pocket, such as a loan for an investment property where the income pays for the debt service. Bad debt is debt that takes money out of your pocket—like credit card debt.

Resolved to get out of debt?

Nearly half of households in the US carry some kind of credit card debt, and the average amount of that debt is nearly $10,000. For a lot of people that seems nearly insurmountable, but the good news is it’s not.

Not surprisingly, many people make New Year’s resolutions to get out of credit card debt, but the big problem is they do not have a good plan on how to get out of debt. And even worse they don’t have a high enough financial intelligence to know what to do with the money they save from paying off the debt. Eventually bad habits come back and before they know it, they’re back in credit card debt again.

So it’s important not just to get out of bad credit card debt, but to also have a plan for that money to help you get richer. Here’s the Rich Dad six-point plan to both get out of debt and get richer in 2019.

Tip #1: If you have credit cards with outstanding balances, keep only one or two credit cards in your wallet.

Have you ever seen someone in line whose card is rejected only to fish into the wallet or purse for one more that might work? You don’t want to be that person anymore, and the easiest way to stop being that person is to remove the temptation.

Don’t carry around multiple cards. Keep your other cards out of sight, preferably in a safe or a safety-deposit box. Any new charges you add to the one or two cards you now have must be paid off every month. Do not incur any further long-term bad debt.

Tip #2: Come up with $150 to $200 extra per month.

When Kim and I were in our toughest times financially, we learned how to hustle. We worked odd jobs here and there, all while working on building our own business on the weekends. It wasn’t hard to earn a little extra money here and there. We simply had to keep our mind open to the possibilities around us. If you cannot generate an additional $150 to $200 per month, then your chances for achieving financial freedom may only be a pipe dream.

For many people this can be as simple as mapping out your monthly expenses and seeing where you can stop spending on liabilities. Eating out more than you should? Buying more clothes than you really need? Paying for online services you hardly ever use? The opportunity is all around.

But if you really want to stretch yourself and increase your financial intelligence, look for ways to actually make an extra $150 to $200 a month. It’s easy to cut expenses, but learning how to make money will pay bigger dividends down the road.

Tip #3: Apply the additional $150 to $200 to your monthly payment of ONLY ONE of your credit cards.

Find the lowest balance card you have and pay the minimum plus the $150 to $200 on that one credit card. Why? Because the goal of the game is to limit your monthly payments on bad debt. You most likely have a lower balance card that when paid off will free up a good chunk of money each month.

After paying your lowest balance card plus the $150 to $200, pay only the minimum amount due on all other credit cards. Often people try to pay a little extra each month on all their cards, but those cards surprisingly never get paid off.

Tip #4: Once the first card is paid off, apply the total amount you were paying each month on that card to your next credit card.

Pay the minimum amount due on the second card PLUS the total monthly payment you were paying on your first credit card (this includes that card’s minimum payment plus the $150 to $200 you were paying).

Continue this process with all your credit cards and other consumer credit such as store charges. With each debt you pay off, add the full amount you were paying on that paid-off debt to the minimum payment of your next debt. As you pay off each debt, the monthly amount you are paying on the next debt will increase.

Tip #5: Once all your credit cards are paid off, continue the procedure with your car and house payments.

If you follow this procedure, you will be amazed at the shortened amount of time it takes for you to be completely debt-free. Most people can be debt-free within five to seven years.

Tip #6: Now that you are completely debt-free, take the monthly amount you were paying on your last debt and put that money toward investments.

This is the get rich part. The reality is that the more bad debt you pay off, the richer you are — that is less money is going out of your pocket to pad the pockets of big banks and creditors. But the real magic of this plan comes in taking the money you were using to pay your debts and putting it toward investments that cash flow each month. Suddenly the money you were losing each month makes you money instead. And that’s life changing.

The good news is you don’t have to do this alone!

When Kim and I were getting out of debt and on the path to making millions, we had friends and advisors every step of the way. We believe so strongly in the power of a community, that we’ve spent our lives building a company that provides for countless others the same help and encouragement we had.

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