Turn Bad Debt into Good Debt

I just got the approval email from Richdad. Now I can put up Richdad products ads and recommend them. In this way, others can use the same system that I've used to achieve the freedom that I have now.

Look at the attractive banner at the top right hand side of this page, that is the one I chose which relates most to the theme of this blog - getting rid of bad debt. The ad even goes further to say that you can turn "Bad Debt" into "Good Debt" and guide to becoming rich!

I highly recommend Richdad books and audio - I have several of his books and some audio CDs.

Begin with an End in Mind

Let's start with being debt-free. Unlike most people, I do not need debt help or refinancing or switch credit cards or worrying about my home mortgage. To me, this is freedom, I do not have to "work" for the banks or the finance companies. I do not have to tell myself I cannot do this because I have to repay this loan or that mortgage every month. Am I living in prehistoric age!

However, I heard that it is better to have good debt - debt that pays you! I read about this concept in Robert Kiyosaki books.

Financial Achievement - Being Debt Free

Woke up this morning and realised this simple truth. I asked my wife, "what is our greatest financial achievement?".

Yes, being debt-free!

We have not needed debt help, refinancing and have no mortgage and credit card debt. We live in a fully paid for apartment that is worth S$250,000 (US$150,000). And we do not have a car, having a car in Singapore means massive auto loan. This is the second biggest debt most people have after their home mortgage loan. So we are free from the two biggest debts that most people have.

How did we became debt-free?

It took time and discipline.

The biggest debt in my life started when I bought my first home in my late twenties to stay with my aging parents and siblings. It was my dream apartment in one of the popular residential location at that time - less than 15 minutes walk to the beach and nature reserve park.

BUT, I was strapped with a 20-year mortgage loan. And I realised that I was like so many people who finance their lifestyle with the help of bad debt. To cut the story short, I realised after three years of good living in a big apartment that I was merely paying for the interest of the loan and the principal had not been reduced that much. And I also realised that as long as I have to repay this loan, I have to be enslaved to a salaried job. Not that I did not like my job, I wanted freedom to do I want.

I decided when I was 28 to be debt-free by 33. It actually took longer that I wanted. I was 35 when I cleared all my loans - I had more than just home mortgage loan and I used to spend more than I made with the help of credit card debt!