Transforming debt into wealth is actually very simple theoretically – stop spending more and start earning more. If only it was that simple right. Most articles you find in hard copy, or online, point out all the “excepted” ways to successfully transfer debt into wealth. I’m not a financial expert, so I will write only of my own financial transformation – from carrying big debt to growing moderate wealth. But first, I want to start with the internal thought process that changed my debt building habits into wealth building habits.
Advertisment: Jeffrey Ringold’s debt to wealth ebook is now ready for download. Jeffrey know what he is talking about when it comes to creating wealth from nothing. Click here to read about his ground breaking ebook. (charges 60 bucks & change I think)
I was living, working, and spending, like most North American consumers. I made a fixed net income of $2700 working for a big company. I was a mechanic, and my education was (and still is) nothing more than a highschool diploma level. I was never worried about earning more money because I never imagined I could do so. Creating wealth was not in my DNA.
Our household income was never enough to afford saving money for a rainy day, mutual funds, or retirement. After the mortgage, utilities, car payment, food, hobbies, entertainment, and speeding tickets (had a lead foot back then), we rarely made more money than we spent. I spent alot of time, energy, and money, working on my hobby which was making music. Someone once joked that if had the same passion for creating wealth as I did for creating music, I’d be rich. Interesting idea considering I was on the verge of personal bankruptcy.
Transforming My Attitude And Habits – Wealth Building Verus Debt Building
Soon after, I succumbed to my debts and declared personal bankruptcy. This is when the transformation took place. From that day forward I vowed to make money with my spare time instead of spending money in my spare time. I vowed never to have debts that were unmanageable again.
The False Business Startups
My 2nd wife and I started a picture framing business and it failed. I started a recording studio and it failed. I started a mastering business and it failed. Unluckily (and luckily) fate played it’s hand and I was laid off from my job. I then began looking at the Internet business. This led to many false starts as well, and I go into more detail on that journey in this article. What kept me going during the hard times (as I stumbled blindly along with my fledgling Internet business) was a fierce passion to be free.
Transforming My Employee Mentality To An Entrepreneur’s Mentality
It was fine that I decided to make my passion wealth building instead of debt building, but that’s not the main reason why I succeeded. The reason I made it was due to an almost life or death attitude. I was determined to live a poor man’s lifestyle until I succeeded. I was determined to NEVER work for someone else again. I was determined to never live the life of an employee. I was determined to be financially free for the rest of my days on this earth. I was resolute in my resolve to wake up each morning when I felt like it, and never take orders from a boss again. I may have to return to a lifestle like that again if my Internet business flops for some reason, but I will simply cut back my lifestyle in such a way that I can begin creating personal wealth again. I won’t go back to working for a company ever again. I will move into low rent accomodations, sell my new car, stop taking holidays every two weeks, stop golfing, stop buying expensive toys, and stop being a consumate consumer. I’ll only be a seller until such a time that I can spend money again without dipping into a penny of bad debt.
Transforming Yourself From A Consumer To A Seller
Before I transformed my spending habits I was 0% a seller and 100% a buyer (consumer). I always knew that the vast majority of people who create lasting wealth were selling something. That could be real estate, natural resources, consumer products, etc. The old saying is true — you’ll never get rich working for someone else. You may invest your money wisely and take the Wealthy Barber approach (trickling savings into mutual funds over time), but that still won’t afford you true financial freedom while your young.
Of course it’s impossible to stop being a consumer of some sort. We all need clothing (well most of us), shelter, and food. We need to spend money in order to maintain some level of dignity in a modern society, but we don’t have to spend large sums of money in order to survive and be happy. I’m lucky in that I came from modest beginnings. I always lived in a clean home, had responsible parents, and lived in dignified middle class neighbourhoods. Simply put, a working class family. I know how to be happy and live a full life without spending large sums of money on wants instead of needs.
When times are tight and you truly desire wealth, you need to be vigilant regarding your spending habits. This is why so many wealthy people have extremely frugal spending habits. This is why Jimmy Pattison still checks the coin return slots when he walks past pay phone booths. They’ve never forgotten how tight things were when they started, and they have no intention of going back to that lifestyle again. They focus their time on creating wealth and raging against bad debt. Yes — we all know there such a thing as good debt. Sometimes we need to invest in our businesses, our homes, our health, our future, and our transportation.
When I started to turn the tables and transform from being a debtor to a wealth builder, the change in our bank balance was astounding. I ended up bieng 70% a seller and 30% a buyer. In my case it was all due to my Internet business, but that’s only one method of online income. You can use eBay to your advantage and create great wealth selling products in online auctions. You can start a standard bricks and mortar company, maybe buy a good franchise, or perhaps invent a product (and get the patent). Whatever our wealth creation method is, we need to change from being the consumer to the merchant.
Technorati Tags: Debt To Wealth, Transforming Debt To Wealth
