|
Totally Debt-Free Lifestyle
Your Transition in Having a Better Financial Situation!
Summarize your debts
Do you realize
that if you owe $5,600 on a credit card with a 18% interest
rate, and you only make $100 payment each month that you will
owe on this account for 124 months and pay a total of
$6,708.54 in principle and and paying % 54.5031 of interest
for the payment?
Real examples are usually the
best tool to demonstrate a theory. Let’s take few examples:
You have 3 debts:
-
Home Loan
-
Credit Card
-
Car Loan
Home loan has an amount of
$36.000 with %14 of interest rate, $3500 for the credit card
with %18 of interest and $21.000 for the car loan with %10 of
interest.
Most people unfortunately, do
not summarize their debts correctly. They simply follow the debt
period/time and payoff their debts without having a clear status
of what is really happening behind the scene.
This e-book is not written to
simply explain theories; you will learn how to calculate your
debts and how to recreate a payment plan to avoid huge interest
rates and hence cutting down your debts and/or becoming debt
free.
As an advice, take your
calculator, have a paper and do at the same time these examples
and you will notice how drastically you can cut down your
interests and save time and money!
Let’s summarize these debts:
|
|
Home Loan |
Credit Card |
Car
Loan |
|
Amount: |
$36,000 |
$3,500 |
$21,000 |
|
Interest: |
14% |
18% |
10% |
|
Monthly |
$500 |
$100 |
$250 |
Summary for your current debts:
-
$60.500 is the total amount of the debts we have. ($36.000 +
$3500 + $21.000)
-
12.8% is the interest rate we are paying. (Weighted average for
14%, 18% and 10%)
-
$850 is your current monthly payment. ($500 + $100 + $250)
-
$647.50 is the amount of interest you are paying each month.
($60.500 x 12.842% / 12)
-
76.1% is the percent of your monthly payments on all your
debts.
If you continue
to make the current minimum payments on all your debts, you will
be in debt for:
13 years and 2 months
During this time
you will pay a total of $59,766.10 in interest which is 98.7% of
your current debt!
Can you imagine
this huge number! 98.7% of interest!!!
This is the
current debt status; this is the nightmare if you do not follow
a debt free plan. Shocking numbers!
|
Name |
Amount |
Interest |
Payment |
Interest Paid |
%
of interest |
|
Home
Loan |
$36,000 |
%14 |
$500 |
$42,996.48 |
119% |
|
Credit
Card |
$3,500 |
%18 |
$100 |
$1500.05 |
43% |
|
Car
Loan |
$21,000 |
%10 |
$250 |
$15,269.57 |
73% |
● Your Home loan needs 13 years
and 2 months to be paid off
● Your Car loan needs 12 years
and 2 months to be paid off.
● Your Credit card needs 4
years and 3 months to be paid off.
Total: $60.500
Interest: $59.766.10
Can you imagine paying interest
approximately the same amount of owe? Unbelievable!
You will be paying for this
$120.266, by simply recreating a repayment plan (following steps
of Chapter 5), you will save this money! And save time too! And
make life easier and let the dream come true!
If you were to pay off your
debts by paying either the minimum amount or the payment amount
of a 15 year amortization, you would have to pay a total of
$59,766.10 in interest and would not pay off your debts for 13
years and 2 months.
>>> Table
of Contents |
