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Why Most Debt Elimination Programs Don't Work

In the recent Money Mastery blog post “How You Can Power Down Your Debt in 10 Years or Less,” we outlined a powerful method for dramatically decreasing the time it takes to get out of ALL debt (including a 30-year mortgage) called Debt Power Down.  It works by having you rank all your debts in one of three ways:

  • Highest to lowest interest rate
  • Shortest to longest maturity
  • Smallest to largest balance

Once you have ranked your debts and run reports (using the My Money Plan software) to see which way will be the shortest way to debt elimination, you work to payoff the first debt on your list. Once this debt is paid in full, you add its payment to the next obligation on your list, increasing the amount available to you to pay off this debt and decreasing the amount of time it will take to eliminate it. You continue this process with each of the debts on your list until all debt is paid in full, reducing the time it will take to pay off all debt to one-third.
This system works for anyone, no matter how bad your debt is, no matter how long you’ve been in it, no matter what. It is mathematically Debtpossible for anyone to become debt-free in 10 years or less if they will just apply the Power Down principle.
“But what about the discipline it will take to stick with this debt elimination program?”
This is a question you might be asking right now. Most people are successful at some sort of orderly approach to paying off debt, and are usually vigilant enough to stick to that system until at least one debt is paid off. But absent a full Money Mastery approach to spending and debt payoff they might think, “Well, I paid off that debt, now I have extra money I can spend.” This is wrong!
Without understanding the full impact that interest has, many people lack the discipline to remain committed to debt elimination for the long-haul and are tempted to spend. Thinking this way will force them to pay as much as three times the amount they actually borrowed! Three times!
Consider the following statement made in 1938 about the relentless nature of compound interest.

Interest never sleeps nor sickens nor dies. Once in debt, interest is your companion every minute of the day and night; you cannot shun it or slip away from it; you cannot dismiss it; it yields neither to entreaties, demands, or orders; and whenever yo get in its way or cross its course or fail to meet its demands, it crushes you.
— J. Reuben Clark, Jr.

The reason the Money Mastery program of debt elimination works is because it keeps the real effect of compounding interest ever most present in your mind. That’s because it requires you to create a Spending Plan where you can see on paper just exactly where your money is going, including the lump sum monthly amount that is going out for debt payments every month.
In addition to this, it helps you create a debt plan where your debts are ranked and a Power Down amount is included and a “Get Out of Debt” report is generated.
This report shows you exactly how long it will take you to reach your goals. This is empowering and motivating! In addition, through the “Real Debt” report (shown below in the example for “Mark and Joyce”) you can again, see the actual amount you will pay, which of course includes all the interest, over the life of all your loans.
This report outlines what you will pay if you choose not to stick with the accelerated Power Down approach. It is because of the systematic spending and debt elimination plans that are part of the Money Mastery program that people are able to stick to an empowering and exciting program and get out of debt so much more quickly than anybody else.
To learn more about debt Power Down techniques, contact us today: (888) 292-1099.

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