Thread: RICH DAD'S The ABC's of Getting Out of Debt ?

Has anyone read this book:

http://www.richdad.com/store/productdetail.aspx?id=129

Please let me know as I'm thinking about buying it.

I'm just concerned as the secret said not to focus on debt, instead just set up a payment plan and forget about it, which is what I have been doing.

I want to settle my bad consumer debt in order to improve my Net monthly cashflow. I'm also keen to invest in cashflow producing assets and get out of the ratrace. I felt that this book may teach me how to do both. (I've also been playing the cashflow101 e-game everyday for the last month, and have just got started on 202)

Whilst we are on the subject - I'm interested to hear your responses to this question... If you had £12k of bad consumer debt which costs £255 per month and had £12k cash on hand, What would you do? Settle the debt to free up the money every month or invest that £12k into a cashflow producing asset?

let me know thanks

Fastlane version:

- negotiate the debt down as far as possible without negatively affecting credit scores
- refinance the debt with a lower interest rate (and new repayments to structure your cash flow better)
- create an asset and use the cash flow from it to pay the debt.
- incur no further consumer debt.

In summary, you reduce your debt by negotiation, reduce the interest component of each payment by refinancing (and give yourself some cash if needed to help create an asset), and create a new asset which pays the debt (or contributes to the payment).

In anticipation of a question about this: you negotiate the debt down as far as possible by calling the creditor and asking for a good discount if you pay the debt out. This works especially well on the day before the last business day of the month, especially for old debt which has been given to debt collection agencies (I used to work for one). They have targets to meet, usually by the end of each month. If you offer to deposit cash into their bank account the day before the last business day, it helps them reach their targets and they are very willing to listen to offers, as most of them have a discretionary percentage they can discount debt to get it paid.

A more advanced version of the above exists, but that's extra-fastlane, and I won't go into it here (I'm a tease, aren't I?). It involves changing one type of expense to another... see if you can work it out :-)

Daniel.

Disclaimer - written between customers (I'm in my store covering for my store manager today), may not be coherent! ;-)