Eliminate Debt - No Loan Required

In order to have a real opportunity to retire early, you must eliminate debt and you must start working on it now.

While you may be so loaded up with debt today that the thought of being debt free seems impossible, you really need to begin changing that mindset.

You need to accept the idea that it's definitely possible to pay off your credit card, student loans, and even your mortgage without needing to secure yet another loan in the process.

Instead of paying only the minimum payment required on each debt, you can implement a strategy that works wonders for eliminating debt.

Here's what you do... begin making a list of all your current debts... even your mortgage.

After each name, write down your balances, minimum payments required and interest rates. Then write down any amount you usually pay over and above what each company wants as a minimum payment. If you normally send in $500 for a car payment that is really only $450, then you would write down $50.

If you do this on more than one debt, add up the total so you know how much you're currently spending over and above your minimum required payments.

This number is your "acceleration amount" and it will help you on your way to debt freedom. For example, if all your minimum payments add up to $650, but you usually send a total of $1000, then your acceleration amount comes out to $350.

Now, if your stuck right now only paying the minimum amounts, you're going to have to dig in and find a way to free up at least $25 that you can use as an acceleration amount. This is imperative.

You're ready to use the Debt Stacking Method now that you have your acceleration amount identified.

Since you're going to start paying off the debt with the smallest balance first, you now need to re-arrange your list of debts. Start with the smallest debt and list them all until you end up with the debt possessing the highest current balance.

You will now change your habits a bit by applying your entire acceleration amount to that first debt only. This means that you'll pay the minimum required payment to all your other debts during this process.

You continue making your payments in this manner until that first small debt is finally paid off completely. Next, you will take the entire payment that you were making to this eliminated debt and add it to the second debt on your list. The entire amount!

You must stay disciplined here. If you fall into the trap of now using that money to spend on other things, you might as well accept a life of debt enslavement. Begin applying it to debt #2 immediately. Once debt #2 is gone, you then apply that entire payment to debt #3, etc.

Here's an example:

• Credit Card #1 has a balance of $3500 with a minimum payment of $85
• Credit Card #2 = $5000, Minimum Payment = $135
• Credit Card #3 = $6500, Minimum Payment = $170
• Credit Card #4 = $8000, Minimum Payment = $200
• Car Loan = $15,000, Payment = $550

Let's assume you have budgeted $200 as your acceleration amount to help you eliminate debt. You'll start by paying credit card #1 $285 each month (the minimum of $85 plus $200 acceleration amount) and then pay only the minimums on the next four debts.

When card #1 is paid off, you now add that $285 to the $135 minimum that credit card #2 wants. This means you'll now pay card #2 $420 each month. By the time you get to your car loan, you're paying your entire $1,340 debt budget to your car loan!

Now, this method requires some patience on your part as you get it started. It's going to take a while to pay off the first 2 or 3 debts.

However, do you see the amazing power you gain as each debt is knocked off? How fast will it take you to pay off that car loan once $1,340 is going toward it each month? Now, what would happen to your mortgage if you applied that extra money to it once the car loan is handled? Pretty cool, huh?

If you truly want to eliminate debt on the way to realizing your early retirement dreams, use debt stacking and get it done.