There is a way to lock in a high rate of return that is 100% guaranteed. If you have a credit card, store revolving account, or finance company account that charges high interest, you can “invest” in this account and receive a guaranteed high rate of return. If you are paying 18% interest, you are being hurt and are experiencing a return of – 18% (negative 18%). Your hole, that you are digging, is getting 1 ½% (18% divided by 12) deeper every month.
When you pay extra amounts that reverse this damage by reducing the principle, you are gaining at the same rate of return. If you have an account that charges 22%, you can get a guaranteed rate of return of 22% by paying extra amounts into it. The only way to kill the Debt Dragon is to feed it to death. You stuff it with the junk food it enjoys until you manage to force that last Ding Dong into its mouth and it explodes. Give your self a guaranteed high rate of return by investing in the destruction of your debt.
In fact, the return, if you look at it a certain way, can be even higher than the stated interest charged. If I have an account with a stated rate of 22.9% and I owe just $1830 and I pay an average of $122 a month, I pay 12 X $122 = $1464 a year. $1464 divided by $1830 = 80%. If I paid $1830 to pay off this balance, I would have 80% of that amount a year in extra money to spend or invest. If I can find a way to destroy this debt quickly in a few months, the money I put into its demise will give me a “return” of 80%. (I know I’ll get letters about this. Come on, guys. We’re just having some fun.)
If I have an account with a stated rate of 23% and payments that will average $160 a month and I owe $6880, the “return” for the extra money I put into attacking it is actually 27.9%. (12 X $160 = $1920 divided by $6880 = .279) I am benefited at this rate for every extra dollar I put into eliminating this debt.
http://EzineArticles.com?expert=David_Unger Articles on building wealth and destroying debt.
When you pay extra amounts that reverse this damage by reducing the principle, you are gaining at the same rate of return. If you have an account that charges 22%, you can get a guaranteed rate of return of 22% by paying extra amounts into it. The only way to kill the Debt Dragon is to feed it to death. You stuff it with the junk food it enjoys until you manage to force that last Ding Dong into its mouth and it explodes. Give your self a guaranteed high rate of return by investing in the destruction of your debt.
In fact, the return, if you look at it a certain way, can be even higher than the stated interest charged. If I have an account with a stated rate of 22.9% and I owe just $1830 and I pay an average of $122 a month, I pay 12 X $122 = $1464 a year. $1464 divided by $1830 = 80%. If I paid $1830 to pay off this balance, I would have 80% of that amount a year in extra money to spend or invest. If I can find a way to destroy this debt quickly in a few months, the money I put into its demise will give me a “return” of 80%. (I know I’ll get letters about this. Come on, guys. We’re just having some fun.)
If I have an account with a stated rate of 23% and payments that will average $160 a month and I owe $6880, the “return” for the extra money I put into attacking it is actually 27.9%. (12 X $160 = $1920 divided by $6880 = .279) I am benefited at this rate for every extra dollar I put into eliminating this debt.
http://EzineArticles.com?expert=David_Unger Articles on building wealth and destroying debt.
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