Crush Your Debt. A Masterclass Breakdown (Part 3)

Debt Payoff Calculator: https://www.iwillteachyoutoberich.com/debt-payoff-calculator/

Transcript:

I am $15,000 in debt.

What's the interest rate?

I think it's 20%.

Is that high or low?

I don't think that that's great.

That's really high.

Yeah.

Isn't it amazing how we get comfortable living with debt? Maybe it's credit card debt. Starts off at $500, built to $10,000. $25,000.

I had kind of what I thought to be reasonable credit card debt.

How much was that?

I think maybe I was at like $7,000 between two cards.

How did you feel about that?

You know, hearing friends be like, I'm $20,000 in debt. Cool, I'm not doing too bad.

I left my nine to five, started a floral business, and then put some money onto the credit card again when we moved into a new place. Just like little things. And somehow it just racked up.

Maybe it's student loans. We don't really look at the numbers. It just gets paid. But we know it's a lot of money.

How about debt?

Student loans, $56,000 in change. The student loans is the only thing that I'll pay until I die, it feels like.

Got it.

We learn to live with debt. Debt gives us so many negative feelings. Feelings of guilt. Why did I do that? Should I have done that? Of shame, I can't talk about this with anyone else. What would people say if they knew I had this kind of debt? And ultimately, this quiet feeling of hopelessness. How am I ever gonna get out of this?

When your relationship with debt contaminates your entire relationship with money, you don't wanna deal with any of it. And that's exactly what this class is about. It's about shining a light on the things that are so taboo, we don't talk about them with anybody else.

In this episode, we're gonna get specific about debt. When you finally shine a light and you see the numbers in black and white, you are gonna feel so much more in control than hiding from debt.

If you walked into a Vegas casino, do you think you could beat the casino? Obviously not, none of us could. They're way smarter than any of us. But most of us don't realize that debt actually works the same way. We're just oblivious to it. If you wanna get clear on your debt, you need a couple pieces of information and they are pretty easy to get. The first off is the balance on your debt. How much do you owe? Most people's debt is a mortgage, maybe student loans, et cetera. The second is the interest rate. What is the interest rate on that debt? For example, for student loans, it might be five, six, seven, eight percent. For credit card debt, it's probably something like 25, 27%. Now, if you don't know what those numbers are, no problem. Call up your lender, whether it's a credit card company or a student loan company. The reality is most of us have no idea what those numbers mean and how they impact us financially. Most of us buy a car and the only thing we think about is the monthly payment. Please stop talking about monthly payments. Anyone who's savvy with money does not talk about monthly payments. They talk about something called TCO, total cost of ownership. So a car that costs $40,000 on the sticker price might actually end up costing you 60, $65,000 depending on a variety of different factors. This is why understanding debt is so important, because your debt costs you way more than the monthly payment alone.

I'm gonna give you a tool to find out exactly how much debt you have and the exact month and year that you're gonna be debt-free. Trust me, this feels amazing.

All right, let's take a look at this tool. There's a debt calculator in your class resources if you wanna follow along. We have your total balance, how much you owe.

All right, I'm going to use my debt payoff calculator and we're gonna plug in some of your numbers. All right, how much is the student loan debt?

57,000.

We have your interest rate. What is the interest rate on the debt?

Standard student loan. 7.1%.

We have how much you are paying towards that debt every single month. Some people pay the minimum, some people pay a lot more. How much are you paying towards it every month right now?

I'm paying about 430 in interest and like 20 to the principal, it's really.

Huh? Now we have the debt payoff date. This is so awesome, we get to see exactly when you will be debt-free.

Okay, so you wanna guess how long it's gonna take you to pay it off? You'll pay it off in 19 years, just a little over 19 years. And then finally, just for a little kick, for a little fun, you know I have a twisted sense of humor, I thought why not throw in the total amount of interest you're gonna pay and you will pay almost $50,000 in interest.

Full transcript available here: https://github.com/no-pay-wall/docs/blob/main/Crush%20Your%20Debt%20-%20Transcript.pdf