eliminate debt 101 book

8/8/2019 Eliminate Debt 101 Book

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E l i m i n a t e

D E B T

1 0 1

Luis Maqueira

Miami, June 2009

Created with Print2PDF. To remove this line, buy a license at: http://ww


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Eliminate

DEBT1 0 1

Luis Maqueira

Miami, September 2009

Editor - Tiberio Faria

Redactor - Pedro Bermdez



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This publication contains the ideas and opinionof its authors, it is intended to offer helpfuland information material on the subjects

addressed in the text. It is sold in theunderstanding that the authors and publisherare not engaged in rendering legal oraccounting of personal professional services inthe book. The reader should consult acompetent professional in these matters

before adapting the suggestions in the book ordrawing inferences from it. The authorsfurthermore specifically disclaim allresponsibilities for any liability, loss or risk,personal or otherwise, that might be incurredas a consequence, directly or indirectly on theuse and application of any of the contents in

the publication or its e-distribution.

Copyright by Luis Maqueira, September 2009

All rights are reserved. No part of thispublication may be reproduced, transmitted,copied or reproduced by any means,electronic, mechanical, including,photocopying, by any information storage andretrieval system, unless is authorized in

writing by the Author.

Authors Luis Maqueira

Editor: Tiberio C Faria

Published by: I-Universe



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EliminateDEBT

101

Smart Guide on the Management

of Personal or Business Debt,

especially those derived from the

Nemesis of this generation: CreditCard Debts



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Luis Maqueira

This book is dedicated to :

Felipe Madrigal, the Networker of

Networkers, ambassador of

community service.

Bert Oliva, a friend and a life

coach.

My wife Arianne, that made this

book possible & makes Our

daughter Erianna Angelinas life &mine a Paradise.



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Table of contents

Preface

Introduction ..

Cancellation of Interest with Cash Flow

Methods

Custom balance sheet.

Credit Card List .

Ask the Bank

Emergency Fund..

Seven Payments.

Schedule your Debt .

Wallet CC labels ...

Snow Ball effect ..

HELOC

Cash Out.

Family and Friends..

Dont play by their Rules.

Financial Hardship and DS.

Last Resort.

Summary



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INTRODUCTION

As we discover that all financial decisions should be based on the cost of interest, amazingly, many of us,our friends and family continue to give our moneyaway to pay interest. Once the true, overall cost of

interest is calculated, everyone can stop letting fundsdie in their savings accounts. Moving cash-flow thisway frees up all of your income to invest in your personal net worth by cancelling interest on debt andpaying it off faster.

This will create more cashflow and reduce debt

expenses much sooner than anticipated. Which is verygood news. There is plenty of information out there; we just need to make sure we choose the best of the best.The mathematical substance behind it does not denyany results.

The best way that each of us has to cancel the

multiple types of interest that we are being charged isthrough our monthly cash-flow. Many of us understandwhat cash-flow means literally, but as we as a team,



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need to analyze what those terms represent in order to

present it so that everyone can understand it and carry itto the next level.

YOU

Cash is self explanatory; it's our take home income,which includes child support, pensions, saving plans,annuities, IRAs. Roth-Iras, etc....

However, Flow is not as clear. It refers to our monthly(hopefully) streams of income which determines theamount of liquid cash we will have at different times.

Everyone in the financing world has always said,from way back when we were doing research at all

levers: "You need to save your money for a rainy day,at least 10%. If you get in debt pay it off with yoursavings, then cut up your credit cards".

This last statement, and all that it implies, needs tobe analyzed. We understand that is absolutely necessaryto seriously take a closer look at our debt. In today's

economy it is necessary to have $ 10,000.00 in order toearn $ 1,250.00 of TAXABLE interest, whichmight leave us with $ 875.00 net R.O.I. (return oninvestment) of those $ 10,000.00 that you have to leavesitting in the bank for a year. Does that make sense???.

The chapters to come will explain exactly how the

concepts of using cash-flow to cancel interest, work.We will also explain in full detail how to increase cash-flow many-fold substantially, using various techniques.



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Then we will be getting into the importance of

why making out a very detailed budget to the very lastpenny is desirable. For every single dollar we deposit inour banks, they (who know how to handle our moneybetter than we do) lend us 12 dollars in loans, for a feeof course, this is called interest.

In other words OUR money is used by the

banks to charge us INTEREST on our debt.

We need to start allowing our cash-flow to workfor us instead of us working for it. Somethingthat stopped making sense (once we finally understoodinterest and stopped paying it) was that it was useless toearn (and here the term "earn" is used loosely) 1 % to5 % taxable interest on our disposable income.

Fortunately this has become a term of the past formost of us. When any on in our team, that has a debt,needs to pay 4% to 32% interest (which is what theCredit Card companies charge anyone), it is crucial touse every cent we can to pay down our debt or, betteryet, to invest in our net worth by getting rid of debt.

In broad terms, this is what this workbook, guide,or manual, is all about:

ELIMINATING DEBT



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Cancellation of Interest with Ca$h Flow

At this time we should define the terms that we aregoing to be using in order to accomplish our task.

Debt = Principal x Interest rate x Time.

Credit Card Company = Bank or large companies thatlend us money to finance purchases.

Principal = quantity of money that the Bank lend us tofinance purchases of any type

Interest = Percentage charged by the Credit CardCompany, for the financial service rendered.

We can not reduce the amount of Principal that wehave borrowed. So in order the decrease Debt, we needto lower the interest Rates and length of time topayback. If we keep on paying by the Banks rules ourdebt always will look like this:

Amount paid to the bank (Debt) = More

debt (principal) x Interest x more Time. =Always to pay more money to our creditors.



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Keep in mind we didnt need to raise the interest

rate to get more money from the banks. All we had todo was: borrow more money & ask for a longer periodof time to pay them back.

In simple words: We go to the bank and we askthem show me how can I pay you more interest, andthey will help you. And we think we are getting helpfrom them.

So, We will increase over and over the amount to be paid to Banks. Just by increasing the time to pay back or having to borrow more money because wereally were mishandling our ca$h flow, was an eyeopener for many of us and this is the purpose of thispublication, to open your eyes also.

It is important to know that we can use all ourincome, particularly the funds we use for our regularexpenses to cancel our interest on debt. Yes it is true wedo not need to rely on our disposable income alone.Those who do that, will more than likely leave debts forgenerations to come instead of leaving a legacy of

assets which will bring financial security for all lovedones.

We are sure none of us want to be the ones leavingdebt and we all want to leave something of positivevalue behind. The chapters to come will explain exactlyhow the concepts of using cash-flow to cancel interest

work. And it works all the time, no matter what interestyou might be talking about, the mathematical conceptswork.



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In this chapter we will be showing you, our reader,

whom we want to be very successful in handling yourresources, how to increase your cash-flow. Afterwards,we will be showing you the importance of a detailedbudget, to the very last penny. To use a simple examplelets take an average American with least $ 2,000 ofmonthly expenses, with the cash-flow methods, we willbe able to show her or him how to change that numberto $ 1,600 per month ( $400 less per month); or a totalof $ 19,200 in expenses per year as compared to theoriginal $ 24,000.00 per year. We are talking about anaverage savings of $ 4,800 per year.

We hope the last few sentences have defined theimportance of reading, studying, practicing and trulycomprehending and using this book, which will be a

good friend for many months ahead.

Its time to wake up financially, among other ways.Americans are going bankrupt because they need $300more per month or $3,600 per year. For the most partthese bankruptcies may have been avoided, had wedone more homework. Yes, many of us have suffered a

job loss in our household or a drop in salary in thefamily. This only makes it more important to establish adetailed family budget and getting rid of debt as soonas possible.

There are two major habits that need to be developed:

Using cash only when necessary, Leveraging our debt.



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Once we learn this and establish in our minds that in

order to achieve Financial Freedom, we need to use the20 % knowledge and 80 % attitude and discipline,(Les Brown)

This applies to all ages; but in fact, it is much morecritical at retirement age. There is a very significantstory of a lovely couple 72 and 73 yrs old, Lucas andMaria. They have two children, a 38 year old son and adaughter of only 28..

The problem they had before truly understandinginterest, was that they consolidated $20,000.00 in debtinto their refinance. They took out a loan for $163,000with a 15 year term 4 years ago. Now they have 11years left on a mortgage at an age well past retirement

and $ 25,000.00 in credit card debt again (soundfamiliar?).

After finding the best information, they will be debt free in 2 years, withoutrefinancing their loan ormaking more money. This was a difficult task, and ittook a lot of financial embroidery, but the monetary

benefit was well worth it (a total savings of $ 163,982)

Lucas, 72 years old, learned to use his Internetbanking. We would too if We were saving 6 figures in 2years. They consulted a financial expert and changedtheir spending methods, for example after 50 years ofusing cash they started paying everything with credit

cards.



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They also stopped leaving money in the bank. They

had saved 10%, during their whole lives accumulating$ 88,000 Unfortunately, inflation increases at a muchhigher rate than interest rates for savings and loans.Inflation is deducted from future net earningsprojections in order to have an accurate forecast.

If that wasn't enough, our wages will never increaseat the same rate (on average) that the inflation grows,which depends on many outside factors out of ourcontrol.

Let me tell you the best secret of how to become amonetarily healthy person, which is all we need to be, there is no need to call yourself a millionaire, itinspires jealousy and envy. But everyone accepts

healthy

First Step: Be bad debt free, you cant build wealthif instead of passive income, we have fixed financialexpenses (called interest), going out every month. Atridiculous rates from 7% to 32%

This workbook will Focus on Credit Card Debt:

So, lets see what minimum payments means, and cando to our financial health.



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Creditor

Unsecured

DebtBalance

Interest

Rate

Total

Payments Payoff

Chase $1,843.00 17.50% $3,321.00 7.5 Years

Sears $2,550.00 23.88% $20,106.00 32.8 Years

Discover $2,935.00 19.80% $6,233.00 8.9 Years

Optima $3,128.00 23.99% $24,586.00 32.8 Years

First $3,653.00 18.99% $4,452.00 2.1 Years

MBNA $3,964.00 17.65% $5,032.00 2.2 YearsProvidian $11,929.00 19.80% $23,561.00 7.9 Years

Totals $30,010.00 $87,291.00 33 Years

In this example, by making minimum payments it willtake over 33 years to pay off the total unsecured debt of

$30,010 which will cost $87,291.

Unfortunately for you, this is exactly what the creditcard companies want because it makes them moremoney. And by doing nothing, you fall into a terriblefinancial trap that prevents you from ever getting out ofdebt and reaching your financial goals and living your

dreams.

Much has been made about various plans in theworld of personal finance. However, we like thingsbroken down and make it clear, keeping it simple. Wewill go on Step by step method that can be implementedright away to solve this problem.

This is a guide, not a magic wand, meaning that inorder to learn to use it, you need to do it, over and over.And if you need help understanding anything, please



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contact someone in our team to help you. Ask the

person that recommended this book to you.

Even tasks as challenging as getting out of credit

card debt can be boiled down to 14 simple methods.

Notice, we called them simple but that doesntmean they are not detailed and sometimes laborious tofollow through. It will take determination and a lot ofsacrifice to see all those credit card balances go to zero.If you find yourself way in over your head, considerseeking help from a good financial advisor. For thethousands of testimonials we have, we can guarantee itis all well worth it.

List of payments and methods:

You will be faced with two feelings in life: Pain orpleasure. So choose your poison but Do-it. Lets take areality check. Do you have any of the followingsymptoms?

huge house payments

fat car payments sloppy large students loans

one large credit card bill

low interest saving accounts

no budgets

anorexic retirement plans

past due bills

periodically over-drafted checking accounts

trying to keep up with the Jones

money runs out faster than the month



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No 1 - Create Your Own Customized Balancesheet (snapshot of my finances method).

We need to stop doing some bad things before we cando good things. We need to create our Balance Sheet.So lets fill form A-1 bellow This will help you take alook at where you are financially right now and thenconsider where you want to be. Together we will build

the system to help you get there.

Data Sheet

Current Mortgage Balance

Original Loan

Mortgage Interest

Monthly Car payments

Monthly CC payments

Average Monthly Expenses (all the rest)

Average Combined Monthly Household Income

Discretionary Income

Form A 1



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The starting point in having a Debt Eliminationsystem is like having your very own financial coach,someone to give you feed back, hold you accountable,and to encourage your success. The focus is on you andhow you will personally achieve your goals.

We need a Balance sheet as a starting point. But our

goal is to maximize the highest and best use of yourmoney. We will focus on Cash-Flow, how much weneed, and how much is left after all our expenses. It isnot a budget to cut Friday nights expenses so you havemoney to pay your debts. It is a list of what we have towork with. Is not only about doing things, it is aboutdoing things a certain way.

We will be focused on Cash Flow to cancel interest.

this is our secret, learn it, live it.

If at the end of this exercise you are at a positivecashflow balance, great, lets keep going! If your balance of cashflow is still negative, we need to be

more serious about it. As you knew or didnt, you aregoing in the wrong direction and We need to be at leasteven, in equilibrium, balanced. Same amount ofincome going in as expenses going out. If you are not atan even point or positive cash-flow, talk to someone inour team. We will work with you to do what needs tobe done, so you can change that.

Please email us at [email protected] you will get anExcel worksheet Sample you can follow.



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No 2 - Create a list with all your Credit Cards

and other expenses

Step one- Take an inventory of your debt. You willneed to make a list of all of your credit card

accounts. Credit Card Name with the last FOUR digitsof each Card (you can use the names AMEX forAmerican Express, VISA - MC (For Master Card) -Dis for Discovery and the issuing bank for each, aswell as the Department Stores and Gas Cards

This list should include:

the current balance,

interest rate,

minimum payment,

closing date,

credit limit

due date.

Use form A-2. This is a painful step, because most of uswalk around not really knowing exactly how much weowe. We have some idea, but it is usually, significantlyless than the actual number. (Many times, we mighteven not want to know, because finding out the actualamount is kind of like having a bucket of ice waterdumped on your head. And yes, this is what we need inorder to wake up and take control of our finances.



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This is not only a clear picture of your debt; it can

reveal problems or discrepancies which could bar youraccess to further credit or financial freedom.

CCCompany CC #

Int.Rate

ClosingDate

Duedate Balance Limit

Est.paymt

5 %

Burdines 3912 25 6-Apr 1-May $750.00 $1,500.00 $37.50

AmexBlue 5010 15.24 6-Apr 1-May

$3,400.00 $4,200.00 $170.00

Macy's 9560 24 6-Apr 2-May $740.00 $1,000.00 $37.00

Visa 3777 9.24 7-Apr 2-Jan $5,200.00 $7,500.00 $260.00

DeptStore 5255 28 12-Apr 5-May $814.81 $1,000.00 $40.74

Week1 $10,904.81 $545.24

Step two Now we need to have a list of ALL your

expenses, as they are programmed to occur, weekly ormonthly.

House, either mortgage or rental

Car

Car insurance

Gasoline

Food (include here the day of the week whenyou ordinarily go to the market (or markets)

Power/light



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Water/ garbage

Cable TV Home phone

Cell phone

Laundry

Beauty salon/barbershop

Miscellaneous

Other FIXED expenses

This will not only give you a clearer picture of your realsituation, it can reveal problems or discrepancies whichcould bar you from further credit or financial freedom.

Form A-2

Step three -Take an inventory of all your Income.We need to know how much and when you make it. Ifyou make it weekly or bi-weekly. We need the netamount to exactly see what is coming in to be availableto use and when it is coming in.

The inventory should be very precise, to be able to

work on the monthly schedule of income and expenses.

Payment dates, these can be very varied, alldepending to the different the practices of theorganization or of the individual, if the persons are selfemployed, how do they pay themselves.

1

st

day of the month 15th of the month

30th of the month



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what day of the week

which week of the month, month by month commissions, when they are paid.

Step four - Mix & Match. If we realize that we makeall the money on weeks one and two, we cant have allthe Debts and Expenses in week 3. This will not helpour Cashflow, which is our ability to have as much

money as possible to invest into the principal of ourDebt. In the case of the credit cards, you can just callthe lender and ask them to change your closing date. Toarrange the debt according to your weekly cash-flow.

Again if in the first two weeks we make $ 1,500 dollars,we can have expenses for $ 2,000 dollars assigned tothose two weeks. This will make it impossible for us tohave enough money for our obligations.

If you are this far, then you are doing great. You aretaking control. If you dont take responsibility for thesituation, nothing is going to change.



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No 3 - Ask the Bank to give you a lower rate.

Really, just ask method

Because we are going to pay debt, it doesnt meanwe are going to take it as it is. We are not going to paythe high interest rate that they have been charging us all

this time. Take a deep breath, dial the number and walkthrough the verification procedures. This is boring, butnecessary so they know that you are who you say youare. Then explain that you are in the process ofconsolidating cards and would like your accountreviewed for a lower interest rate, that you need them tohelp you so you can keep up with the bills in these

tough times.

If they decline, ask to speak to a supervisor andrepeat your pitch. If they decline, thank them and hangup. Resist the temptation to close the account at thispoint, no matter how angry they make you by refusingto lower your interest rate. You might be calling back

to cancel the credit card soon enough. But at the timeyou will have a 0 balance.

The Rule you have to follow is: If your currentlender is charging very high interests, or even not sohigh rates, it's time to renegotiate. We have used thistactic to get points knocked-off their interest rates, winyears of freedom from repayments, and save countlessdollars in interest payments.



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According to a survey conducted by the U.S. Public

Interest Research Group, more than half of the study'sparticipants who called their credit card company weresuccessful in reducing their annual interest rates.

And what a difference one phone call can make:Eric Warren, one of the 50 consumers who participatedin the survey, was able to cut down his interest almostin half, from 15.9% to 8.65%. Working with a balanceof $4,474 and making the minimum payments of 2%,Eric saved himself $324 in just the first year and $5,031over the life of the debt. Because of his lower rate, hewill also pay off his debt almost 10 years earlier.

Why does this tactic work? One reason is that thelending industry is filled with competition. The market

is saturated with credit card offers, as you might havenoticed. Your lender would rather keep you as a payingcustomer -- albeit at a lower interest rate -- than shellout anywhere from $75 to $250 to acquire a newcustomer.

Use your leverage and get your lender to lower your

interest rate. And choose the right closing date whileyou're at it.

This tactic works best for those with decent creditratings, a history with their current credit cardcompany, a low unpaid balance compared to their creditlimit, and no late payments in the past year. Still, even

if you have a few bumps on your record, it's clearlyworth a try.



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If they won't negotiate with you -- even after a few

minutes of hearing you sobbing into the receiver -- it'stime to move on and try to find a better offer on anotherCredit Card Company or Bank

Make every point matter.

In this instance, we will show you that the numbersspeak for themselvers. So here are details of what it willtake to pay down $ 8,000.00 at four different interestrates, if you pay just the minimum balance each month.

Starting

Balance

Interest

Rate

Time to Pay

Off

Total Interest

Paid

$8,000 18% 30 years $11,615.32

$8,000 12%20 years, 1

month$5,180.13

$8,000 9%18 years, 2

months$3,334.52

$8,000 5.9%16 years, 1

month$1,907.18



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Calculations are based on making minimum monthly

payments of 2.5% of the balance.

Just to state the obvious, it appears that the interestrate plays a somewhat significant role in your debt load.If you currently carry a high balance, it behooves you tomake sure you're paying as little interest as possible.We dont need a part-time job to pay more; we need to

do this job to be charged less. We all know that carringdebt is hurting us. But because we dont cuantify thethe full amount to be paid back. We only see that we dosmall payments every month, which we consider to be just, because we dont know any better. By beingaccountable for our use of money we will make sure weput it to work for us. Not for the bank.



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No 4 - Emergency Fund, Im not and

alcoholic, drug addict

NO MORE - BASTA - NO MAS

To think I will not measure up to the situation is aninsult (Marshall Sylver).

Myth: Cut all your credit cards and set aside 3 to 6months of your monthly expenses.

Its pitiful to see people that make decent moneygiving this advice. I will ask them to show me how toget the money if I cant get to the end of the month, soshow me how Im going to save 6 months in advance.

And if I cut my credit cards, how do I put gas to go towork next week? Credit cards are OPM (other peoplesmoney), they are one of the best financial leverageelements we can have. Because a few people think:"buy what you want and don't need. And pay whenever you want." That doesn't mean we should stop usingcredit cards. Let's just learn how to use them to ouradvantage.

Use them to borrow time of money, your cashmoney will be invested in the principal of your otherdebts so you will pay less interest. And better yet youwill not pay interest on top of interest. What is knownas the compound effect.

An emergency budget is very much a great utopiain these days. Dont get me wrong. We believe in it, butin order to build it, if you want to have it, invest it in



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your credit cards debt and in your line of credit. You

will not lose the liquidity and you will save hundreds ofdollars in interest. Compare this to the interest we willget on a saving account.

Look at what we normally do, we put our money insafe low interest rate accounts under 2%, and we go andborrow from the same banking system our own moneyat 6%, 9%, and even 25 % or more. And then wecomplain we dont make enough money.

Is not about the money we make is about the moneywe keep, so we can invest it.

If you put $5,000 in a good savings account, aftertax you may get a ridiculous 2 %, or $100 a year. But,

when you have a $5,000 credit card at 20 % it will costyou $1,000 a year. And you will have a minimumpayment of $150 a month ($1,800 a year). So, lets usecash-flow sense. I rather have $1,800 a year to invest inmy other debts than to have $5,000 dead on a Depositin a Bank.

CD for us stands for Certificate of Death.

With these preliminary steps, you are now readyfor the next ones. You will learn to do wonders to yourcash-flow and decrease your debt and the interest youare paying.



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No 5 -The 7 Payment of Cash-Flow

Myth: I should pay off my credit card every month; 12payments a year. I should put as much available cash-flow as I receive, toward my balance every month.

Truth: You should use the billing cycle of the cards inyour favor to pay them every 50 to 55 days on average.

This will give you only 7 payments a year instead of 12(365 divided by an average of 50 = 7). This will put thegreatest amount of days between monthly bills, thusincreasing your cash-flow collection and decreasingyour cash flow disbursement.

To follow this method we need to learn the basicsof how we are being charged, how to read the billingstatements, and how to interpret the elements.

Elements: Due date, Interest Rate, Credit Limit,Balance, Closing Date, Grace Period and Billing Cycle.

We will go over the ones that 95 % of the peopledont know how to use. Each of these terms applies

separately to EACH of the Credit Cards.

Billing Cycle: we get charged for our purchases inperiods of 30 days.

Closing Date: the date that ends the Billing Cycle.

Grace Period: an average of 20 to 25 days after theClosing Date. We have 20 to 25 days to pay after the



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closing date established in the statements from the

Credit Card Company

Payment Cycle- So if we add the 30 days of the billingcycle to the 25 days of the grace period we have up to55 days to use the banks money without paying anyinterest to the bank. Its time to get back at them!

Cashflow is time of money

The banks let you borrow money for free if you paythem back within an average of 55 days. So lets makeit happen. If you have 5 fewer payments per year, thatis giving you a lot of extra cash-flow. Payments will bespread out in 55 days. During this period of almost twomonths, you will have more paychecks coming in,

which will help to establish thesnow ball system.

While you are learning what 95 % of Americansdont know, dont use, and will never know, youshould, In financial matters, the majority rule is that Itsnot that we dons see the solutions. Its that we dontsee the problems.

Steps:

From Step No 2, use the list ofALL credit cardsfrom: Credit Card Name and last FOUR digits of eachcard number, as well as the issuing Bank and the namesAMEX for American Express VISA - MC (For

Master Card) - Dis for Discovery, as well as theDepartment Stores and Gas Cards



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Interest Rate,

Closing Date, Due Date,

Balance,

Credit Limit

Estimated Payment.

Write this information, preferably on an Excel

worksheet. One of the most important things we need toknow is the Closing Date.

Lets say the closing date is July 3rd. If I use$500.00 during the first days after the closing date. Iwill not be charged for that purchase until August 3rd,when the Credit Card Company will close the statement

and mail it to me, starting on that date, they and giveme 25 days of a "Grace Period" to pay for it.Therefore, my Due Date will be August 28th. That is

more than 50 days of using banks money, otherpeople's money.

7/3/09 8/3/09 8/28/09

30 days cycle 25 days



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So what will my money be doing for me?

Since I didnt have to pay the $500.00 until August28th, .I will use my money to pay down principal onother credit cards during this time. This in turn willlower the balance accordingly, thus paying less interest

even if I carry an open balance. Keep this concept payless interest, we are being able to achieve this withoutmaking extra money, without cutting on our expenses.All we are doing is being smart on the use of ourmoney.

From a creditor's standpoint, your actions aredevastating. Your billing cycle becomes less and lessprofitable to them and provides you with the maximumleverage. Every month your balance drops and in turnthey will charge you less interest. With our system, you begin your path to financial freedom by aggressively paying down principal and avoiding finance chargesand interest. Dont play the banks game by payingmostly interest, which is what the banking financial

system wants you to do.

Do not pay by the Rules; play by your own Rules.

Luis M.

Now that you have a picture on how to handleyour debt, lets get serious about using the cash-flow

method to pay for your expenses. The following stepwill change the way you handle and pay bills for therest of your life.



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No 6 - Schedule your debt to have cash-flow

money to make your Credit Card payments.

FEAR: False Expectations Appearing Real. LesBrown.

We believe this method is very simple but we don'tuse it because of our Fears. Fear of not having enough

money to pay bills, in case of an emergency, or justliving life. Every week we have to consider thefollowing: minimum payments on credit cards andweekly expenses to be paid with our checking accountor credit cards.

Steps:

1 - List all your expenses for the following week thatyou can pay with Credit Cards, for example cable,phone, food, gas etc. totaling $ 631

2 - List all the Credit Cards minimum payments youhave for next week. For example $355 (minimumpayment)

Monday Tuesday Wednesday Thursday Friday

Cable Gasoline SuperMarket Phones -Cell Dinner-wife

$ 99.00 $ 52.00 $ 220.00 $ 150.00 $ 110.00

Total $ 631.00



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Visa

Master

Card Amex

$ 137.00 $98.00 $ 120.00 $ 355.00

3 - Pay these Credit Cards in advance with the $631.Then you don't need to Fear you dont have money tomake the minimum payments; they are already paid.And you will have the money available to use it againnext week.This will do two things: clear your mind for better

things and your cashflow (money) will be invested inyour principal for that period. So you will be chargedless interest next month. This savings of interest willpay your credit cards much faster.

4 - We will pay $231 to the first card, $200 to the nextand $200 to the other one. It should be clear for you

that you have $631 available on your credit cards touse. Even if they were close to maxed out balances.



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Visa Master Card Amex

$

137.00 $98.00

$

120.00 $ 355.00

Payments

$

231.00 $ 200.00

$

200.00 $ 631.00

We just did a very smart cashflow method operation.We didnt have to pay $ 355 to the credit cards. And wedidnt pay from our checking account $631 dollars.Totaling $986, we only paid $631 to our credit card andhad that money available on the credit card to pay ourbills. We had and extra $ 355 dollars to be invested inour debt so we are charged less interest.

5 - You should put as much money you as you can inthe credit card principal during the month. All thatmoney you pay will count as a payment till the duedate. And when you use it you will be billed for thisexpense next month. You will have the chance to havemore income flowing in during this period.



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No 7 - The wallet Credit Card sticker-label

closing-date

This method supports method #5. By now weknow the basics of how we are being charged, how toread the billing statements, and how each one of the

elements listed, work.

Elements: Due Date, Interest Rate, Credit Limit,Balance, Closing Date, Grace Period & Billing Cycle.

Review: Closing date is the date that ends the billingcycle. Grace period in average is 20 to 25 days after the

closing date. So if we add the 30 days of billing cycleand the 25 days of the grace period we have up to 55days to use the banks money without paying absolutelyany interest to the bank.

Step 1- Using the list in method #2. We will put asticker on each credit card with its closing date.

Step 2- To apply method #5 all we have to do whenusing our credit card is to reach for the wallet and pickup the credit card with the closing date that just passed.The closing date should be as close as possible totodays date.

So if I have Credit Cards with stickers closing dates11th and other one 22nd, and today is the 15th, I shoulduse the credit card with sticker 11th. Thus I will not bebilled till the 11th next month and then I will also take



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advantage of the 25 day grace period to pay, after the

11

th

of the month.

Put your kids to work. They will love to help you;make them do the sticker for you in different colors and proudly put them in your credit cards. And any timeyou feel lazy to think about which one to use, keep inmind who is going to pay for the college of the kids youhave at home. That will give you the energy to do itright.

There is no energy in logic. We need to get excited;we need to take seriously this game-mission of gettingout of debt. The next method is what you need to startexperiencing results that will really help you to keepgoing.



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No - 8 The Snow Ball Payment

The snowball technique can help you attack yourcredit card debt and repay your high interest balancesmuch faster than you could by just using a random payment arrangement. For many of us, during manyyears, this arrangement usually was to pay whatever Ican whenever I can.

The goal of taking control of your financial life isto increase your cashflow each month. The more excesscash you have, the more you have to reduce debts orspend on improving your lifestyle. Each debt has aminimum monthly payment. This to you is a financialcost.

You cant say I have $400 left at the end of the

month after paying all my expenses. If you have debtyou already pre-borrow that money and you are payinginterest for using it.

We will pay all the lowest balance credit card first.Imagine start getting credit card balances with big 0balance and 0 interest payments. You may even get a

phone call from the bank saying are you OK? Whyarent you paying me interest? Here take and other

credit card, do a balance transfer . Just do somethingso I can make money on you.

By paying off the lowest balance credit cardaccount first, you remove an entire fixed payment,

instantly making your existing cashflow stretch further.You will have more money at the end of the month, nomore month at the end of your money.



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You take this money and pay the next credit card

with the lowest balance and repeat this process until theone with the highest balance is paid off. This is knownas snowballing in the financial planning industry because the money you send in to each paymentgradually grows as each debt is reduced until you sendlarger payments to attack your biggest and last debt.

Someone who had balances of $8,000 with aDiscover credit card; $3,000 with a Visa credit card,and $1,500 with a Chase credit card, $1200 with aMaster credit Card .. Send in all the extra money to the$1,200 Master credit card till the balance is $0 and thento the Chase credit card again till the balance is $0.Once each debt credit card balance is paid off, moremoney is available to pay the next higher balance card.

Visa $3,000.00 18% $120.00

Capital One $3,800.00 25% $152.00

Chase $1,500.00 24% $ 60.00

Amex $4,500.00 22% $180.00

Discover $8,000.00 19% $320.00

Master

$1,200.00 26% $ 48.00



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When you dont have any balance on the Master

and Chase credit card. You would have created an extra$108 cashflow to invest in your others debts.

This is one of the steps that emotionally are goingto help you the most, because you will see statementswith a BIG ZERO balance.

Rule is 20 percent Knowledge and 80 percentgood Knock them dead Financial Habits.

Getting debt free is the result of doing many thingsin a certain way, in the search for one goal.

Lets build and control Cash-flow to cancelinterest.



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No 9- Get a Home Equity Loan HELOC or a

Personal Loan

Do you own your home and have accumulatedequity through the years as you are paying off themortgage? Have you ever checked the return onEquity? Its $0. Again we put our money in very lowrate return on investments. So if you have equity now

is the time to consider a home equity loan (HELOC), aline of credit for the maximum amount possible.

The use of the cashflow on the equity on myhouse is a big Zero. A HELOC provides two ways ofcreating cashflow:

First, by using the equity loan to pay down your debt,you trade something like an 18% interest for a 7% to8% interest. Second, you will be able to put your salaryto earn interest before you have to spend it paying bills.

Lets say you have a credit card bill for $1,000 but youhave only $700 in your Checking account, so you willhave to carry a balance for next month and you will becharged interest on that amount 20% . If you borrow$300 dollars you will pay $0. interest on that creditcard. And yes, you will be charged daily interest onthe $300 balance from the line of credit. But as soon asyou get a salary payment you will deposit this amountin the line of credit thus you will be charged very littleinterest comparedto the 20% or more on the credit card

for a full month.



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Also if you itemize deductions on your income tax

returns, HELOC interest is a deductible item undermost circumstances. In a 25% marginal tax bracket, the6% loan really has an effective rate of 4.50%, and that's probably the cheapest interest rate you'll see onpersonal indebtedness.

If there is not enough equity in the house we canstill get a personal line of credit. The advantage on theinterest works the same. Only that on a personal line ofcredit we dont get the tax benefits.

Yes, We know there are a lot of smart people thatwill say you dont pay unsecure debt (credit Card) withsecure debt (line of credit against my house). We agreewith them in the concept, but we are on a mission to be

out of debt so we will use every resource possible.



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No 10 -Cash out your saving account

You could cash out your savings and investmentsand use the proceeds toward debt repayment. Right, noone wants to do that. But sometimes it's just wrong notto do so.

Lets find the cheapest Interest Money to invest-paythe highest Interest Money Freddy Reyes.

Even when debt interest is at 12%, yourinvestments would have to yield more than 18% beforefederal and state taxes, to equal that outflow of dollars.

We doubt the dollars in your banks account are earninganywhere near the 18% rate of interest. Pay off thedebt, and it's the same as getting that 18% returnwithout any risk on your part.

The thought behind this is that You dont paydebt, you invest into debt. The higher the interest rate

on your debt, the more attractive repayment versusinvestment becomes. You are not spending yoursavings, you are: REPEAT: investing into your debtto pay less interest.

This guaranties principal and interest returns andit is all income tax free. And what should make youvery happy is that you didnt pay to a financial advisor$250 an hour to create this great investment.



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No 11 - Ask your Family and Friends

Perhaps your family or friends could lend you aloan. Who else knows, trusts, and loves you like theydo? Unless you're really the black sheep of the flock,chances are you'll get a very favorable interest rate.

They may even tolerate a late payment or two.

But if you want to maintain the relationship, it'sbest to keep things on the straight and narrow by usinga written agreement. You should clearly establish theinterest and repayment schedule in writing to avoidmisunderstandings and hard feelings.

You should put a collateral to guaranteerepayment. Your friends and family are getting lessthan 2% on this money.

Paying them 6% to 9 % will still be much lessthan 20 % on a credit card. Check chart on #3 and you

will see the gains. It is a simple win-win situation forboth parties. Cashflow money is what we said we need,and we will try all resources available.

The reward is fantastic. So we should achieve it assoon as possible. And you must be very good whith therepaymnet of this loan, follow the payment schedule.Otherwise, you can forget the family reunions andbirthday presents. And you have to live up to the trustthey gave you.



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No 12 Dont pay by their Rules, play the

game by your own rules

Always pay more than the minimum amountrequired. A lot more. We don't pay according to thelending industry's standard rules. Revolving credit cardsrequire minimum payments as low as 1.5% to 2.5% ofyour outstanding balance each month - a calculation

cleverly designed to prevent you from paying off yourbalance before your great-grand-children celebrate their18th birthdays.

Seriously. if you pay by your lenders' rules, it'lltake you 44 years and one month to pay down a balanceof $ 4,500, even if you don't put another penny on the

Credit Card once you reach that limit.

And how much will that $4,500 end up costing?About $17,000.

You just learned about the snowball technique forreducing your credit card debt so now it's time todiscuss the Snowflake technique. The premise is

simple: Every time you get more than a few dollars inyour hand, send it into your debts to reduce youroutstanding balance.

To make it clear: We're literally talking about$7.12 payments, or $3.54 payments. If you just leave itin the bank, you're going to spend it. There is nothingwrong with that, is just human nature. But lets repeat itso you dont just forget it.



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If all you are able to find is an extra $2.74 per day,

that's $1,000 per year, taken off your credit cardbalance!

People often ignore the power of small amounts.As with everything in life, there is a compoundingeffect that goes to work. It's the same principle behindthe story of the ant that was able to move an entire

mountain, one grain of sand and piece of dirt at a time.

Your small efforts may not look like they're evendenting your credit card debt. In the aggregate, overseveral years, the results will be nothing short ofspectacular. It's the nature of the universe. We justsometimes forget about it.

But we should always remember what the white hairedJew said (Dr Albert Einstein)

Those who understand interest, will

earn it, those who dont, will pay it

Cashflow Financial Map

Is up to you to create your new financial Map.

We guarantee you that If you apply the abovementioned methods. You will change the rest of your

life. For you and your love ones. Is not option is aMUST DO situation.



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Beliefs = I can get debt Free

This will make you take decisions

Decisions= will follow the methods of eliminatedebt 101 work book

This will make you take action

Make it happen= I will do the methods, will act up onthem.

This will give you results

Results= Zero debt, more cashflow, more money toimprove my self and my love ones.

This will change, affirm, and re-affirm my beliefs

New Belief= I am a debt free person and I will make

everybody I know a debt free person.



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No 13 - When financial Hardship is there, one

Choice is Debt Settlement.

Debt Settlement is the process in which a group ofprofessional debt negotiators work with your creditorsto reduce your debt to a fraction of what you owe(Typically about 40% to 50%). Your debts are settled inan orderly manner as agreements are reached with each

of your creditors. Creditors sometimes acknowledgethis commitment by not only reducing your interestrates, but by also reducing your other fees and penalties

Debt settlement is one of the most effectivesolutions for the consumers who are in astressed financial situation and are seriously

interested in paying off debts.

It is a process which leads consumers in aneffective way so that they feel fewer burdensand less pressure from creditors.

Settlement is the best alternative to bankruptcy.

Settlement law also allows creditors to wipe offextra charges in the form of late paymentpenalties and annual fees.

This will help consumers in extracting actualdebts.

When a good portion of debt get reduced theconsumers feel easier to manage monthlypayments as they are lower.

How can I know if I qualify to this program?



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Everyone that has unsecured debt with 2 or or

more creditors, such as credit card or personal debt,totaling at least $10,000, is automatically qualified.

Unsecured Debt includes:

Credit Card Debt / Medical/Hospital Bills/Department Store Credit Cards/

Oil/Gas Credit Cards/Personal Loans(unsecured)/Overdue Rent/Autos (Repos)/

Local Merchants/ Past Due Utility Bills.

Questions &Answers

Will Debt Settlement affect my Credit Rating?

Answer #1 Debt settlement will not hurt your creditin the long run, because you will get yourself out ofdebt and be able to move forward with your credit.You do, however, need to be intelligent about howyou go about debt dispute and should have expert

advice through the process.

Answer #2 Debt Settlement will only hurt yourcredit if you are irresponsible with your debtrepayment plan. Too many people pay off creditcards and loans, then they turn around and run uptheir credit debt again. Then, they end up in a worse

situation than before they negotiated.



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Answer #3 The simple answer to the question is

that no, debt negotiations will not hurt your credit inthe long run. It is a method encouraged by creditorsto help you get your finances under control andmove towards a better credit rating. They wouldrather get something than nothing.

So there you have it, the top three answers tothe question, Will Debt Settlement Hurt My Credit?There are many people asking this question and65% of Americans in over their heads. You are notalone. If you are considering debt elimination, thenyou should be talking to us.

Federal Laws that govern credit card companies,

banks and debt collectors

Fair Credit Billing Act

Fair Debt Collection Practices Act

Fair Credit Reporting Act

Truth In Lending Act

All these are consumer protection laws that youshould review to know your rights as a consumerwhen you are in a financial stress situation.

Nobody, listen to ME Nobody can disrespect you,harass you, threat you, call you at work, call you onocuard times to early to late, If anybody doest itthey are violating your rights and the LAW.



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No 14 - As Last Resource, File for Bankruptcy

So, what to do you do if you can't pay down yourdebt using any of the methods listed above? Whatshould you do? The absolute last resort is bankruptcy.We firmly believe everyone has a moral obligation torepay their debts to the utmost of their ability. There aretimes, though, when repayment may be impossible or

the process or trying will hurt us more than not doing it.In those cases, bankruptcy may be the only availableoption.

We need to be aware of the significant drawbacks.

Your credit record will contain this informationfor 10 years, thus ensuring you will have a tough timeobtaining credit you can afford during that period.Additionally, as odd as it seems, it costs money to filefor bankruptcy. Attorney and court filing fees cost inthe thousands of dollars, and they must be paid. Also, bankruptcy laws have gotten a lot tougher in recentyears, so you may not qualify for complete relief.

Bankruptcy is a legally declared inability orimpairment of ability of an individual or organization to pay its creditors. Creditors may file a bankruptcy petition against a debtor ("involuntary bankruptcy") inan effort to recoup a portion of what they are owed orinitiate a restructuring.

In the majority of cases, however, bankruptcy isinitiated by the debtor (a "voluntary bankruptcy" that is



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filed by the insolvent individual or organization).

Wikipedia,

There are two types of personal bankruptcy relief:Chapter 7 and Chapter 13. Chapter 7 is straight bankruptcy that allows the discharge of almost alldebts.

Those that aren't discharged are alimony, childsupport, taxes, loans obtained through filing falsefinancial statements, loans not listed in the bankruptcy petition, legal judgments against the petitioner, andstudent loans.

Chapter 7 of the Title 11 of the United StatesCode (Bankruptcy Code) governs the process of

liquidation under the bankruptcy laws of the UnitedStates. (In contrast, Chapters 11 and 13 govern the process ofreorganization of a debtor in bankruptcy).Chapter 7 is the most common form of bankruptcy inthe United States. Wikipedia

While Chapter 7 - relieves you of the

responsibility of repaying most creditors, you may haveto surrender much of your property to help satisfy thedebt. However, different states have different laws thatgrant you exemptions on certain types of property, suchas a certain amount of equity in your home, a low-valuevehicle, small amounts of jewelry and other personal property, and tools you use in your trade or business.

These exemptions usually aren't huge, but they do meanyou won't have to start over with absolutely nothing.



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Chapter 13 bankruptcy filing is a way for

individuals in the United States to undergo a financialreorganization supervised by a federal bankruptcycourt. The Bankruptcy Code anticipates the goal ofChapter 13 as enabling income-receiving debtors adebtor rehabilitation provided they fulfill a court-approved plan. Compare the goal of Chapter 13 withthe relief contemplated in Chapter 7 that offersimmediate, complete relief of many oppressivedebt(s). Wikipedia

Chapter 13, sometimes called the "wage-earner plan," is different. You keep your property butsurrender control of your finances to the bankruptcycourt. The court approves a repayment plan based onyour financial resources that provides for repayment of

all or part of your debt over a three-to-five-year period.

During that time, your creditors are not allowed toharass you for repayment. You also incur no interestcharges on the indebtedness during the repaymentperiod. When all conditions of the court-approved planhave been fulfilled, you emerge debt-free from the

bankruptcy.



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Summary

Stop, Get the Credit Card Debt out of your Head, do

something about it and keep going with your life.

Are you or not ready to accept responsibility foryour own financial life and take control over their creditcard debt?

Simple if you still blame, the economy, the bankssystem, political system, your work, or anyone oranything rather than YOU. Honestly, You are laying toyourself. Change starts with you, not by buying a magicbook that will do it for me.

Theres something you need to hear:

Get it Over with .

You are not a stupid person. You are not a badperson. You just made some no so good choices. It hadnothing to do with your salary or expenses. Every time

you used your credit cards, you made a willing and abledecision.

The very first time the credit card bill came andyou couldnt pay off the entire credit card balance infull, that time you had exceeded your income.



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Thats the moment you got in cashflow trouble.

By following the above methods you will not fall inagain. And when and while you are getting out of debt.

Our team will be there for you to guide you all the way.www.yesdoral.com

Create you own Declaration of Independence

framed, and put it in place you can see it every

morning before you get out to the world.

Im willing to live, to demand from me NOW,

like no one else, so I can live later like no one else.I will do what ever I want, with whom ever I want,

for as long as I wantbyLuis Maqueira.



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If you are like most of us, you have probably

been accumulating debt for years, but now it is timeto stop. Draw a line, and vow to never cross it again.It is time to start living the rest of your life debt

free. Living without debt reminds me of the story of aman in bicycle pedaling his bicycle like crazy to climbthat tall hill.

And when you think you cant spin the pedalanother turn you see the top of the hill. You get to thetop of the hill in complete exhaustion and then begin todescend to the other side, wind blowing in your face,the sun is not there but the rainbow between the cloudsis, you look up and smile.

That for me is the feeling of living debt free, and

I cant wait to go down hill again soon. What aboutyou? And have no fear achieving it. Life will alwaysput some challenges on our way just to keep us awake.



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Work assignments:

Fill out Financial Worksheet

List all your Credit Cards on the Excelworksheet.

Apply all the methods. You can always ask forfree help from one in our team.

If you dont know some one, ask the person thatrecommended this book, he will know some onein our team.

Use the 90 days period on the MortgageFreedom System Software. You will learn somuch about cashflow rules and how to cancelInterest.

eliminate debt 101 book

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