How to “Cashflow” Your Way Out of Bad Debt in 5 Simple Steps…

The age old question reins… What is the fastest most efficient way to pay off debt? Which accounts do you pay off first? If you don’t have any debt to pay off this article isn’t for you. If have a few outstanding loans, read on and I will help you avoid some pitfalls so many people fall into.

Eager to chisel away their debt, people make critical mistakes that slow them down.

By following the 5 step process I will outline below you can polish off your debt in the fastest, safest and most efficient way possible.

is debt a problem?

With total US consumer debt at all time highs it is no question this is an issue. Currently it is over $13 trillion!

Total student loan debt sits at $1.48 trillion. Auto loan debt has grown to $1.3 trillion. Credit card debts reached an all time high in 2017, coming in at $1 trillion dollars…

In case that isn’t obvious enough, Americans are floating on a sea of debt.

At this point in time the average American household carries $137,063 in total debt.

Why is this of any concern to me?

If you are like most people, you will take on some sort of debt in your lifetime.

If you can focus and pay off your debt in the right way it will have amazing effects on your financial security, cashflow and wealth building capabilities.

I often get asked about my budget. I say what budget… For me budgets are about restricting, choking and holding back. I would rather focus on being more efficient on the income side and reducing debts more effectively.

The methods I will show you below will allow you to enjoy your life while servicing your debts and ultimately eliminating them.

step #1 – build up the cash

My recommendation is to have at least 3-6 months of income in liquid cash available to cover yourself. Without cash you are stressed out and can’t function in a comfortable fashion.

Without reserves one unexpected bill can put you in a serious crunch. So before starting on your debts build up the cash first.

step #2 – increase cashflow by shaving monthly expenses

There are a ton of ways to do this but one little known technique is to raise your deductibles on all your insurance policies to bring down the monthly premiums.

This little technique alone could net you a few hundred dollars a month which can be used to knock out your debt even faster.

Many people will have a super low deductible as they think cheaper is better but what they don’t realize is that you can save some decent coin by taking the road less travelled.

step #3 – knock out those loan payments with this formula

How would you like to be a little better off every month without putting in any more effort?

The strategy is called the cash flow index.

This will literally let you pay off your debts 2-3X faster then doing this willy nilly like most people do.

Usually you just grab the highest interest loan and start chiseling away. Not here.

Step #4 – use the cashflow index on your assets to turn idle assets into new cashflow

I’ll go over this in another post in the near future but this basically takes non performing assets and turns them into found money that may be better utilized paying off debt.

step #5 – Loan consolidation

The last step is to make your existing loans more efficient and therefore increase your cashflow. Assuming you have decent credit and some equity on your balance sheet this can help a ton. Just make sure you don’t end up running up your credit cards after paying them off with a consolidation loan.

what now?

Start by immediately saving a percentage of your income to build the kitty. Keep at it until you have at least 3 months of living expenses saved.

Be sure to read my next few articles as I will go into detail on a few of these strategies.

Now all that is left is to take ACTION!


Checkout my article here about one of the oldest ways to make money online…

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