Is it possible to join the fastlane while in debt?

[FreshStart87]

I'm in the midst of paying off my debt and am having trouble executing anything because of it. So i try and educate my self as much as I can via books, internet, and teaching myself html and css during the process. Is there anyone out there who has joined the fastlane and used the income on their journey to pay off the debt? I have read MJ's post about choices, and I am trying to repair the damage I have caused.

 

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[Breaking Free]

Yep. There are lots of ways to generate income and start on the fastlane. It's mostly a time investment more than needing money.

 

[BaladOfARichMan]

I'm in the midst of paying off my debt and am having trouble executing anything because of it. So i try and educate my self as much as I can via books, internet, and teaching myself html and css during the process. Is there anyone out there who has joined the fastlane and used the income on their journey to pay off the debt? I have read MJ's post about choices, and I am trying to repair the damage I have caused.

Hi there, I have the same question/problem as FreshStart87. I have a debt to pay (about 6000$) and recently lost my job. So I feel the need of looking for a new job at least until I pay my debt off.
The thing is that in Spain, where I am from, the job situation is so f*cked up right now due to the crisis that it is so hard to find a decent one.
I read books and study new stuff every week, but still dont have the solution for making even a small income through the Internet/business?
Should I keep looking for a job?

 

[maverick]

I'll throw in my 2 cents here.

Please note that I'm talking about debt accumulated due to consumption / stupid decisions; not related to any business enterprise.

I've made some wrong decisions in the past few years and landed myself into some debt. The way I see it there are 2 kinds of debt:
1- high interest (e.g. credit cards, overdrafts): These should be worked away asap. I've worked 2 jobs the past 6 months to pay off these debts. I will cut my expenses to a bare minimum to get rid off these debts.
2- low(er) interest (e.g. student loans): I factor these in as a normal living expense i.e. I don't see a direct need to pay these off. I'll continue working on my fastlane ideas whilst paying off these debts on a monthly basis. If however I run into a windfall of money, I will use this to pay off these debts as well.

Simply said there are 3 phases in your financial life:
(1) Living in debt whilst bound to 9-to-5. At some point you'll realize that having debt is a massive burden on your freedom. (residual income < expenses)
(2) Debt-free but bound to 9-to-5. You've also learnt not to get into debt again. (residual income > expenses)
(3) Financial independence. (passive income > expenses)

Jumping from (1) to (3) is possible however the most gradual path will be to follow (1)-(2)-(3). In my opinion this will also teach you not to get yourself into unnecessary debt again; jumping from (1) to (3) directly might result in the same problem that NFL / rappers etc seem to end up in; give them a massive amount of money and they will simply increase their expenses accordingly i.e. their residual income will either be less than their expenses or they overestimate their future earnings and eventually end up in residual income < expenses.

 

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[FreshStart87]

Thanks for a great answer maverick!

 

[benh]

I'm in the midst of paying off my debt and am having trouble executing anything because of it.

That's just a weak excuse. You said you are learning html and css. The boundary to getting a website online when you are programming it is less than $20. I think you could easily find that cash without feeling any additional financial stress.

The internet has all the information you could ever need for web programming. Really you have all the tools you need to make a change in life. It's all just about taking the time to do it.

I know in my situation I have the ideas, the skills, the resources, I can find the time. I just choose to do other things like play video games and watch videos on youtube. A year ago when I first thought of starting a web business I should have taken action. I don't think I'd be at my current job if I had. Life forms around the actions we take not the ones we plan to make.

"A year from now you will wish you had started today." - Karen Lamb

 

[LightHouse]

Hi there, I have the same question/problem as FreshStart87. I have a debt to pay (about 6000$) and recently lost my job. So I feel the need of looking for a new job at least until I pay my debt off.
The thing is that in Spain, where I am from, the job situation is so f*cked up right now due to the crisis that it is so hard to find a decent one.
I read books and study new stuff every week, but still dont have the solution for making even a small income through the Internet/business?
Should I keep looking for a job?

A job will be a fast way to funds yes, but there are other things you can do to create money in the mean time. There has been a lot posted on here about it. The web is a slower way of income if you are starting out.

Look for things that are aimed at college students to generate money, you will have to put in hard work though. No surprises there.

Sent from my Galaxy Nexus using Tapatalk 4

 

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[MooreMillions]

Yep!

Although there are examples of companies that carry debt free sheets, there are plenty of "successful" businesses/business persons that do.

 

[Nadia]

Absolutely, myself for example. When I lost my first company, my spa-- I was in around £20.000 ($33,000) debt. Took a job, got fired in 60 days which proved to me employment was a waste of time for me, still owned the spa lease which was a nightmare and worked around the clock to set up my spa consultancy (www.the-spapreneur.com) and used that to slowly pull myself out of the debt and live where I could pay the rent and eat normally. All my debt was from my business, no personal liability.

Don't ever let something trivial as debt stop you. I am fully qualified to say it is trivial because I have experienced the pain, sleepless nights and stress it brings. Work your vision and keep moving from there. Find freelance work online because there IS work out there. Sell spare things in the house, use a pawnbroker (been there and done it and I had to because I felt I had no other choice) however stay away from silly things like payday loans etc. That's the devil's child.

Fastlane doesn't look at your debt. It looks at how relentlessly hard you hustle.

 

[TJPB]

...Is there anyone out there who has joined the fastlane and used the income on their journey to pay off the debt?...

"Joining" the Fastlane..but yes.

 

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[Winning]

It'll just make you hustle harder... go get em!

 

[JAJT]

I paid off $20k in debt in less than 1 year with a regular job.

So while I can't tell you I paid off my debt with my business, I do know a thing or two about paying off debt, quickly.

The short version:

1. Calculate all monthly expenses (rent, groceries, parking, cable, internet, cell phone, etc...)
2. Give yourself a REALISTIC but MODEST guilt-free slush fund. Spend this on 'shit' (fast food, booze, clothes, hobbies, etc..)
3. Net income - expenses - minus slush = Debt Repayment Amount.

The magic of this comes from how you do the above though. This is the magic:

1. When you get paid, throw the entirety of the debt repayment amount over to your debt. Don't leave wiggle room or "what if" room or think of worse case scenarios. Just throw it ALL over.
2. Take out your slush fund in cash. Put it in your wallet. Pay for your garbage/hobbies/clothing in this cash. When it is gone, you are poor until next payday. Tell your friends you are staying home, skip the fast food, etc... When it's done, you're done. No excuses. Keep the plastic at home.
3. Use the remaining amount left over to pay for bills as they come up.


The result is you are paying debt first, have a set amount for "fun" that you don't have to think about, and the bills have what they need to be taken care of.

To make this go EVEN FASTER:

1. Consolidate your debt. I had a few 19.99% credit cards. I opened up a 6.5% credit line and paid off every credit card with it. I saved myself 13.5% interest every single month doing this. On $20k that was a savings of $225 PER MONTH that I could now send to debt. Talk to your bank about credit lines, or any lower interest credit options.

2. Reduce:

- Kill your data plan - wifi is everywhere.
- Cut your cable, get netflix. Hook your computer to your tv if you like. $6 beats the hell out of $50+ for cable.
- Learn to cook and prepare meals in advance and save on groceries/fast food. Eggs for breakfast, leftovers for lunch, meat + veg for dinner. Cheap, cheap, cheap.
- Give up/reduce drinking, eating out, or other expensive activities

3. Increase your income.

- Flip items on craigslist/classifieds
- Sell the shit you don't use any more
- Take on extra shifts
- Do paid odd jobs for friends and strangers
- Freelance if you can

If you make debt repayment a fixed cost, and the rest of your life the variable cost, you can make a spreadsheet in two minutes that gives you the exact date you will be debt-free. Shit will come up, your car will break, you'll need a root canal, whatever, so you might actually be a few months out from the date you come up with but you'll know very accurately about when you will be free.

 

[wwstewart]

I paid off $20k in debt in less than 1 year with a regular job.

So while I can't tell you I paid off my debt with my business, I do know a thing or two about paying off debt, quickly.

The short version:

1. Calculate all monthly expenses (rent, groceries, parking, cable, internet, cell phone, etc...)
2. Give yourself a REALISTIC but MODEST guilt-free slush fund. Spend this on 'shit' (fast food, booze, clothes, hobbies, etc..)
3. Net income - expenses - minus slush = Debt Repayment Amount.

The magic of this comes from how you do the above though. This is the magic:

1. When you get paid, throw the entirety of the debt repayment amount over to your debt. Don't leave wiggle room or "what if" room or think of worse case scenarios. Just throw it ALL over.
2. Take out your slush fund in cash. Put it in your wallet. Pay for your garbage/hobbies/clothing in this cash. When it is gone, you are poor until next payday. Tell your friends you are staying home, skip the fast food, etc... When it's done, you're done. No excuses. Keep the plastic at home.
3. Use the remaining amount left over to pay for bills as they come up.


The result is you are paying debt first, have a set amount for "fun" that you don't have to think about, and the bills have what they need to be taken care of.

To make this go EVEN FASTER:

1. Consolidate your debt. I had a few 19.99% credit cards. I opened up a 6.5% credit line and paid off every credit card with it. I saved myself 13.5% interest every single month doing this. On $20k that was a savings of $225 PER MONTH that I could now send to debt. Talk to your bank about credit lines, or any lower interest credit options.

2. Reduce:

- Kill your data plan - wifi is everywhere.
- Cut your cable, get netflix. Hook your computer to your tv if you like. $6 beats the hell out of $50+ for cable.
- Learn to cook and prepare meals in advance and save on groceries/fast food. Eggs for breakfast, leftovers for lunch, meat + veg for dinner. Cheap, cheap, cheap.
- Give up/reduce drinking, eating out, or other expensive activities

3. Increase your income.

- Flip items on craigslist/classifieds
- Sell the shit you don't use any more
- Take on extra shifts
- Do paid odd jobs for friends and strangers
- Freelance if you can

If you make debt repayment a fixed cost, and the rest of your life the variable cost, you can make a spreadsheet in two minutes that gives you the exact date you will be debt-free. Shit will come up, your car will break, you'll need a root canal, whatever, so you might actually be a few months out from the date you come up with but you'll know very accurately about when you will be free.

This is brilliant advice! Frankly, people should do this regardless of whether they start a business or not.

 

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[D11FYY]

Warren Buffett

On Spending : "If you buy things you do not need, soon you will have to sell things you need".

On Savings : "Do not save what is left after spending, but spend what is left after saving".

Pretty much what @JAJT has said. Hes given you a plan to follow, stick to it and you will soon find your self in a better position!

 

[Nadia]

@JAJT made an important point about debt consolidation. I used that to get out of it all, stopped eating out etc. If it wasn't necessary, I didn't do it. You need to work out HOW and WHY you got into the debt. For me, it was purely my first business didn't have enough cashflow and I had to close to avoid forced bankruptcy. I dissolved the company and along with that around $10,000 additional debt. Nothing makes you work quicker than knowing you have to get back to 0 and build from there.

 

[McNandez]

There's a TON of good advice in this thread - I hope the OP updates us on his or her progress!

 

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[FreshStart87]

Progress update
As of today I owe 26,691.39 I could of far reduced this debt and I was failing to take action. I started by saving $1000.00 emergency fund. As of this year I dumped my whole tax return in to it. I made a strict budget my wife and I follow closely. Sometimes I slip up on my budget but for the most part I stick to it. I recently decided to pay off 2 loans that we're draining me $223.00 per month. I am using Dave Ramsey's method to snowball this. I will continue to give you guys monthly progress on how I am doing. Feel free to ask me anything.

 

[LightHouse]

I don't know if it will help you but consider this snippet from a non relevant article @jason R posted.

" Think about it like this, poor people stay poor because their natural response is to try and save money. Their idea of trying to have more money is to spend less on other things. It’s an oppressive scarcity type of mindset.

Rich people on the other hand default to think “how can I make more.” It’s an abundance mindset and its the little secret that keeps the rich richer."


I'm terms of your debt reduction, I know 2 people that were in a similar situation with the same of not greater amounts of debt.

Both of them got out of debt, neither by saving money on their current income level.

One got a second job and worked every available day, and the other created a side income. Both were out in under two years.

If you want to move slow and be comfortable, save money and pay it off.

If you want to move fast, kick a$$, and take names. Go out and make that money, and don't stop till that debt is gone.

Which is it going to be?

 

[MJ DeMarco]

Once you get control over spending, the problem is not a saving issue, but an income issue.

When I see people fretting over $20K in debt, it means they still have a scarcity mindset. I make more than that in one month. When I owned a company, I earned nearly 10X more. Now coming from that perspective, an income one, would $20K in debt be a big problem? Nope. It'd be paid in a month or two. In fact, my credit card bill, which I pay off every month, was greater than $10K. Do I let it roll? NOPE. I pay it all off. How? Because I'm not focused on skimping lattes and cutting cable channels, I'm focused on INCOME.

EXPLODING INCOME is offense and its how you swim to victory.
EXPENSE CUTTING is defense and its how you tread water and stay afloat in a pool of mediocrity.

To give a fitness analogy, expense cutting is like going to the gym. It makes you feel good. It can be done relatively easy with a snap decision. (I'm not going to eat out!)

Exploding income is like eating correctly, carb cutting, and sugar eliminating. It's difficult. It's the process. It requires not a daily, or a weekly commitment, but an HOURLY one. You constantly have to work at it to make it work, and yet, it's where the real meat of the results are found.

To be in the best shape of your life is about 75% what goes in your mouth, 25% gym.

With debt/wealth, 75% of it is income. 25% is expense discipline, or saving.

As for getting in the Fastlane with debt, consumers don't care about your debt situation if you have something they want.

If my house springs a huge water leak and you are selling the plug, I don't care about your personal situation or circumstances. Let me buy the damn plug.

 

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[FreshStart87]

Wow thanks for the advice. I am looking at it from a whole new perspective. I guess we are not taught in school that a career will lead to an income problem. I should have the freedom to spend as much as I NEED to on my family as well as myself without worries. When I meet people and at work and we all talk about how we make 100k a year everyone say thatS enough "WE MAKE GOOD MONEY". That social programming has really sunken in, I am fortunate to have this thread reverse it. Thank you all for helping on this thread.

 

[FionaS]

I paid off $20k in debt in less than 1 year with a regular job.

That's just about our minimum payment in our debt per year, sadly. Almost $2k/month. Those student loans are killer. :/ Should be paid off within 3 years, though.

Starting a business is definitely possible while in debt, though if you're facing high interest rates, I'd really suggest trying to get rid of the debt as quickly as possible. Our highest interest rate is 5%, so we are okay with using some money that would go towards loans otherwise towards business. In a way, it's a good thing - it's forcing me to be more objective about spending money, and I'm working a lot leaner because of that. Our lifestyle definitely doesn't have much fluff in it, though, and the little fluff there is is for the kids.

So, TL;DR: Yes, it's possible. But you need to figure out your true priorities and plan accordingly.

 

[Deleted25642]

I'll throw in my 2 cents here.

Please note that I'm talking about debt accumulated due to consumption / stupid decisions; not related to any business enterprise.

I've made some wrong decisions in the past few years and landed myself into some debt. The way I see it there are 2 kinds of debt:
1- high interest (e.g. credit cards, overdrafts): These should be worked away asap. I've worked 2 jobs the past 6 months to pay off these debts. I will cut my expenses to a bare minimum to get rid off these debts.
2- low(er) interest (e.g. student loans): I factor these in as a normal living expense i.e. I don't see a direct need to pay these off. I'll continue working on my fastlane ideas whilst paying off these debts on a monthly basis. If however I run into a windfall of money, I will use this to pay off these debts as well.

Simply said there are 3 phases in your financial life:
(1) Living in debt whilst bound to 9-to-5. At some point you'll realize that having debt is a massive burden on your freedom. (residual income < expenses)
(2) Debt-free but bound to 9-to-5. You've also learnt not to get into debt again. (residual income > expenses)
(3) Financial independence. (passive income > expenses)

Jumping from (1) to (3) is possible however the most gradual path will be to follow (1)-(2)-(3). In my opinion this will also teach you not to get yourself into unnecessary debt again; jumping from (1) to (3) directly might result in the same problem that NFL / rappers etc seem to end up in; give them a massive amount of money and they will simply increase their expenses accordingly i.e. their residual income will either be less than their expenses or they overestimate their future earnings and eventually end up in residual income < expenses.

Simple yet awesome. I've been reading about so many different ways of doing this and that to make money yet... Not gaining ground.

I do have a 9-5 that will give me overtime yet I've been chasing passive income instead of simply doing the overtime and crushing that debt to a pulp, so I'm rid of that burden.

Time to knuckle down with what I have available in front of me and with the time left over... Explore

 

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[Coalission]

Is there anyone out there who has joined the fastlane and used the income on their journey to pay off the debt?

Yes, just paid off like $60k in debt in the past two months, after just sending them the minimum for the past year or so while I used whatever money I brought in to grow the business. Finally decided to just be done with it, and the only thing left is about $7k in CC debt that's on a 0% promotion. I scheduled the correct amount needed to be paid automatically for all of those cards to pay them off before the interest kicks in.

My opinion on the whole thing, is that if the debt is manageable, just pay it down only enough to give yourself some extra money to invest in yourself, and work on making more money, while cutting unnecessary costs in the meantime. If the debt is not manageable and you feel like you're drowning, file bankruptcy with your head held high. That's what it's there for. Treat yourself like a corporation, if it makes financial sense then pull the trigger. It isn't financial suicide, I filed Chapter 7 back in 2010, my FICO is now back over 700 and my biggest CC is at a 30k limit, and I run over $50k in charges on it monthly (at 2x miles per dollar, weeee), but don't carry a balance and make big payments on it every couple days or so.

Disclaimer: This is not financial advice. I see nothing wrong with racking up debt the way businesses do and risking it to make more money and hit financial freedom, then if it doesn't work out they file Chapter 7 and start all over. If the debt actually weighs on you and affects your emotions, despite knowing that if you can't pay it you'll be nothing more than a write-off to them while you're home starving yourself to make payments, then by all means do everything you can do to pay it down and maybe leave the hunt for The Fastlane for later.

 

[Deleted25642]

Absolutely, myself for example. When I lost my first company, my spa-- I was in around £20.000 ($33,000) debt. Took a job, got fired in 60 days which proved to me employment was a waste of time for me, still owned the spa lease which was a nightmare and worked around the clock to set up my spa consultancy (www.the-spapreneur.com) and used that to slowly pull myself out of the debt and live where I could pay the rent and eat normally. All my debt was from my business, no personal liability.

Don't ever let something trivial as debt stop you. I am fully qualified to say it is trivial because I have experienced the pain, sleepless nights and stress it brings. Work your vision and keep moving from there. Find freelance work online because there IS work out there. Sell spare things in the house, use a pawnbroker (been there and done it and I had to because I felt I had no other choice) however stay away from silly things like payday loans etc. That's the devil's child.

Fastlane doesn't look at your debt. It looks at how relentlessly hard you hustle.

Nadia, Im going to read all your posts. Your past situation is exactly where I am now after buying out of my gym lease.

I'm glad you shared your story. I funded my startup on my personal LOC and CC so that's what I'm working off now with a 9-5 until I can replace it with a more fastlane option.

 

[Nadia]

@RaymondB Thank you! Just seen this now It's a horrible place to be in, but I promise you, it will be over and you will have learned so many business skills after it!

 

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