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Debt to Dollars © The Money Professors (TM) www.TheMoneyProfessors.com 2013 Career and Technical Education Summer Conference Len Rhodes M.B.A. C.P.F.M.

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Presentation on theme: "Debt to Dollars © The Money Professors (TM) www.TheMoneyProfessors.com 2013 Career and Technical Education Summer Conference Len Rhodes M.B.A. C.P.F.M."— Presentation transcript:

1 Debt to Dollars © The Money Professors (TM) Career and Technical Education Summer Conference Len Rhodes M.B.A. C.P.F.M. Mark C. Weitzel M.B.A. C.P.F.M. July 25, 2013

2 Debt to Dollars  My First Credit Card  $1500 Balance, $25 Minimum Payment  18.99% Interest Rate © The Money Professors (TM)

3 Debt to Dollars  My First Credit Card  $1500 Balance, $25 Minimum Payment  18.99% Interest Rate  16 Years to Pay Off © The Money Professors (TM)

4 Debt to Dollars  My First Credit Card  $1500 Balance, $25 Minimum Payment  18.99% Interest Rate  16 Years to Pay Off  It Gets Worse  $25 X 12 X 16 = $4800 © The Money Professors (TM)

5 Debt to Dollars  My First Credit Card  $1500 Balance, $25 Minimum Payment  18.99% Interest Rate  16 Years to Pay Off  It Gets Worse(er)  $25 X 12 X 16 = $4800  $25 PMT at 9.6% APR for 16 Years = $11,300 © The Money Professors (TM)

6 Debt to Dollars  My First Car Loan $291 PMT5 Years12.25% APR=$13, PMTMasterCard PMT $266 PMT5 Years13.65% APR=11,522 COST$ 1,478 © The Money Professors (TM)

7 Debt to Dollars  My First Car Loan $291 PMT5 Years12.25% APR=$13, PMTMasterCard PMT $266 PMT5 Years13.65% APR=11,522 COST$ 1,478 © The Money Professors (TM)

8 Debt to Dollars  My First Car Loan $291 PMT5 Years12.25% APR=$13, PMTMasterCard PMT $266 PMT5 Years13.65% APR=11,522 COST$ 1,478 © The Money Professors (TM)

9 Debt to Dollars  My First Car Loan $291 PMT5 Years12.25% APR=$13, PMTMasterCard PMT $266 PMT5 Years13.65% APR=11,522 COST$ 1,478 © The Money Professors (TM)

10 Debt to Dollars  My First Mortgage $1,200 PMT30 Years6.25% APR=$194, PMTCar PMT - 75 PMTMasterCard PMT $ 859 PMT30 Years6.75% APR=132,440 COST$62,455 © The Money Professors (TM)

11 Debt to Dollars  My First Mortgage $1,200 PMT30 Years6.25% APR=$194, PMTCar PMT - 75 PMTMasterCard PMT $ 859 PMT30 Years6.75% APR=132,440 COST$62,455 © The Money Professors (TM)

12 Debt to Dollars  My First Mortgage $1,200 PMT30 Years6.25% APR=$194, PMTCar PMT - 75 PMTMasterCard PMT $ 859 PMT30 Years6.75% APR=132,440 COST$62,455 © The Money Professors (TM)

13 Debt to Dollars  My First Mortgage $1,200 PMT30 Years6.25% APR=$194, PMTCar PMT - 75 PMTMasterCard PMT $ 859 PMT30 Years6.75% APR=132,440 COST$62,455 © The Money Professors (TM)

14 Debt to Dollars  My First Mortgage $1,200 PMT30 Years6.25% APR=$194, PMTCar PMT - 75 PMTMasterCard PMT $ 859 PMT30 Years6.75% APR=132,440 COST$62,455 © The Money Professors (TM)

15 Debt Takes Away Our Choices © The Money Professors (TM)

16 Why Do We Borrow? © The Money Professors (TM)

17 Why Do We Borrow? © The Money Professors (TM) We don’t control our spending

18 Why Do We Borrow? © The Money Professors (TM) Consolidating is NOT paying off.

19 Why Do We Borrow? © The Money Professors (TM) Consolidating is NOT paying off. DEBT

20 Approval Affordability © The Money Professors (TM) Why Do We Borrow?

21 Why Do We Borrow? Reasons for Indebtedness  Keeping up with the Joneses  The use of money to punish.  Need for instant gratification.  The expectation of instant comfort among young couples who overuse the installment plan.

22 Why Do We Borrow? Reasons for Indebtedness  Lack of communication among family members.  The amount of finance charges is too high.  We are mentally trained to spend.  Overindulgence of children.

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24 Defeating Debt  You are never in too deep to lose hope!  You can pay off $10,000 of debt in less than 2 years with just a part time job! © The Money Professors (TM)

25 Defeating Debt  You are never in too deep to lose hope!  You can pay off $10,000 of debt in less than 2 years with just a part time job!  Common strategies:  Pick up a part time job (taxes)  Sell stuff on eBay or Craig's list  Become a smarter consumer  Above all else… stop borrowing! © The Money Professors (TM)

26 Defeating Debt © The Money Professors (TM)

27 Defeating Debt  Assess your current debts (list or work in Excel)  Who do you owe?  How much do you owe?  What is the interest rate?  What is your monthly payment? © The Money Professors (TM)

28 Defeating Debt  Contact your credit card company(ies)  Ask for rate reduction  Ask to speak to a manager or customer retention specialist  Move money to a lower rate card  Beware of transfer fees © The Money Professors (TM)

29 – Start with the smallest debt (easiest way) – Start with the highest interest rate (financial) Defeating Debt  There are 3 ways to eliminate debt  Just pay them off naturally (most expensive) © The Money Professors (TM)

30 Defeating Debt  Pay off your first debt faster  Now you can add the previous payment to the next debt  Don’t get discouraged…look for the tipping point © The Money Professors (TM)

31 Defeating Debt What happens when we add extra money onto the minimum payment. The Tipping Point The key is to focus on one debt at a time like a laser. © The Money Professors (TM)

32 Defeating Debt The 50% Solution Aggressively pay off debt while giving yourself a break After each debt is paid off, enjoy 50% of the extra and use the other 50% towards your Debtor-ADE © The Money Professors (TM)

33 Defeating Debt Control Spending  Envelope System (cash-based)  Create one envelope per category to track  Put monthly amount in at the beginning of the month (if possible) or with each paycheck  Only pull money out of the envelope for that category – when its gone, you’re done! Simple! © The Money Professors (TM)

34 Debt to Dollars Go home today and list your debts Start tracking your total balances each month on paper Use at least one of the Debtor-ADE strategies Raise cash to retire debt Add to the minimum Highest interest rate Lowest Balance 50% solution © The Money Professors (TM)

35 Debt to Dollars © The Money Professors (TM) Career and Technical Education Summer Conference Len Rhodes M.B.A. C.P.F.M. Mark C. Weitzel M.B.A. C.P.F.M. July 25, 2013


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