The Secret To Turning Debt Into Wealth

What is the secret to turning debt into wealth? Why don't I have any money to spend and I see other people enjoying life who earn less than me? What is the secret to building wealth instead of increasing debt all the time?

We all want to be rich. Wanting to be rich is not a bad thing. You might want to be rich so you can help others. You might want to be wealthy to support your family in the way you feel they deserve.

Wanting to be rich doesn't  make you a money grabbing greedy person like some of the  people we see portrayed in films like the character Michael Douglas played  as Gordon Gekko in the 1987 film Wall Street.

Wanting more money does not make us greedy. In fact it simply means we are sensible and responsible in wanting to do the best we can for our families.

So, you ask yourself, what is the difference between rich people and me? The answer may be not very much at all. It is more than possible you are just as bright and intelligent. It is likely you are just as attractive. You may not have gone to the best schools or colleges but that doesn't always make the difference we expect. The biggest difference is that they have money and you don't. It is as simple as that.

How did they get their money? There may be many answers to that question but you can be sure they didn't sit on their backsides all day watching TV. Some wealthy people don't know how to relax and they are always working and thinking about how to get richer. A few will have been very lucky and had money fall into their lap but most worked hard to get it and they look after the money they already have.

Wealthy people do not throw their money away. They may spend a lot but you can bet your last dollar they don't spend it all. Can you imagine Warren Buffet ever having said something like, "Oh honey. I spent the last of our money on that flash new car I wanted". No, he would sooner have an old beat up car and money in the bank.

When you get wealthy you can afford to splash out a little but wealthy people know that debt is a killer of dreams. They know that the best way to make money is to lend it to people who want to get into debt. Borrowing money costs you money in interest charges and possibly default charges f you are late paying anytime.

Using debt to finance your lifestyle costs you more than using cash. It costs 10,15 or 20% more depending how much interest you are paying but the bottom line is this. If you want to enjoy the same lifestyle as your neighbor and he uses cash while you use debt, you will need an income of maybe 20% more than him to have the same lifestyle and you will still have no money left at the end of the month.

So, it is clear that living on debt is an expensive way to live and that is the first clue as to what the secret of turning debt into wealth is. We need to find a way to reduce our expensive debts. We also need to find a way to save money so we become wealthy. The secret is in our spending habits.

For most of us spending has become a pastime. We go shopping for fun. Gone are the days when we bought our essentials and went home again. Now shopping has become entertainment and like most entertainment you have to pay for your fun.

The availability of credit cards has meant we are no longer restricted to spending the money we have in our pockets. Now we can spend other peoples money and owe them instead. We pay them later for the fun we had today.

The problem with this brilliant idea is that it means we have even less money to spend tomorrow because we will be paying for the money we borrowed today. Here is another secret to becoming wealthy and getting rid of debt. Stop Spending Money!

We all have things we need to buy and things we have to pay for. Food, shelter, clothing are all vital to life but resisting the temptation to buy a new TV, a smarter car or a new dress on your credit card will not kill you. Spending only the money you have each month will get you back on the straight and narrow and once you clear your debts you will find you have more money to spend or save than you ever had before when you were paying interest on debts.

Reducing the money you spend each month will mean you have more cash available than before. Using this money to reduce your debts will save you money on interest charges and even more spare money in the future.

The difference between wealthy people and us is that wealthy people never spend all their income. Yes they may nave more money available to spend but they never spend it all. They are always building on their savings and they resist the temptation we all have of buying the things they cannot afford.

The secret to turning debt into wealth is to understand how money works either for you or against you. Spending more than you earn will always lead to trouble. Spending less than you earn will lead to you increasing your wealth and building on your savings which will allow you to enjoy a better standard of living in the future and leave you more cash to give your family, your kids, a better life and there is no better reason for getting control of your financial health than that.