As I continue the topic of “How to achieve your financial goals in 2021”, I want to specifically talk about the journey from Debt to Financial Independence.

And before one can start this journey, you must decide that you want to be debt free. This important at the start of the journey, as it is a way of committing yourself to the journey and pursuing the goal of becoming debt free.

I personally feel that everyone should desire this, because if your income is not growing at the rate of inflation, then you are becoming poorer and poorer. So, the journey towards financial success starts with deciding that you want to be debt free and financially independent or financially free, then empowering yourself on how to achieve this.

In this economic climate everyone needs to work on new and additional income streams, as well as work towards financial independence. You should be working your job or business, not because you must, but because you want to.

And you know it’s ok if you’re not where you want to be today, because you can start again. Today in fact my husband and I were talking about where we are financially today and where we want to be and how many times in our own journeys, we’ve had to start again a few times. Don’t compare yourself to anyone or envy them. The bible even warns us against envy in James 3:16: For where you have envy and selfish ambition, there you find disorder and every evil practice.”

So, what is “good debt”, this is when you leverage debt to buy income generating assets, e.g., when you buy a rental property, and it generates profit income for you every month.

Some of you may know that a lot of what I know today, as far as financial education is concerned is what I have learnt through Rich Dad Education. I also had the privilege and opportunity to be one of their Speakers in South Africa through Legacy Education from 2016 to 2019.

Robert Kiyosaki definitions of Good Debt vs Bad Debt, is this:

Bad Debt is used for consumption, takes money out of your pockets, and makes you poor. On the other hand, Good Debt is used to buy assets, puts money into your pockets and makes you rich.

So, as you plan your way forward, you need to learn to manage your debts, or they will manage you. Decide that if you cannot buy certain items cash, that you sacrifice and don’t buy them at all, until you in a position to do so. Don’t go to places if you know that you will be tempted into buying things that you don’t need. And sometimes leave all your store cards, etc. at home, because if it’s not with you, then you can’t buy unnecessary. I am remembering a few years ago when I started renewing my mind in finances and starting my journey towards financial success, I decided to reduce my visits to shopping malls and in some cases I even avoided certain shopping malls. I did this because this way I didn’t want to spend money on things that I did not need or be tempted into buying thing that I did not need. I was managing my behaviour towards debt, until I was able to unlearn this bad behaviour. And where I am today is that if I do not have the cash to buy it, I don’t. Today I don’t have any store accounts. I personally don’t believe in store accounts anymore, because if you don’t have the cash to buy it, then you shouldn’t.

If you are using debt to pay off debt, then you have ugly debt and you need to do your best to cut down on your expense so that you can get out of this situation as soon as possible.

Many of us when we start out in business find ourselves moving from bad debt to ugly debt and not necessarily because we want to, but because circumstances force us into this situation. And if you are finding yourself here, I want to encourage you that your financial life is not dead unless you decide that it is! And if you find yourself here, you need to ensure that you empower yourself with the right type of financial education and use vehicles such as property and MLM or network marketing to help you achieve financial independence and put in place new and additional income streams.

In my next article I want to write on the Understanding the Cost of Debt, to make better financial decisions.

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