Paying off your debt or getting out of debt is an incredible accomplishment. I have heard insane stories of people paying off tens of thousands of dollars in debt by extreme frugal sacrifices and money management practices in a matter of months. I mean really incredible stuff. You should definitely congratulate yourself if you are one of these individuals. The problem is that this is only the first phase. You are now just only at square one. You’re back to even.
You haven’t crossed the finish line, you’re essentially back at the starting line. I’m not trying to downplay your achievement, but to give you perspective on the financial journey. Now, you must continue your habits and implementations and start saving money and developing assets.
Removing debt and getting free of paying interest to others is the first step. Now it’s time to build some net worth for yourself and start getting others to pay you interest. This might be in several forms:
- Interest bearing savings
- Dividend yielding stocks
- Cash flowing real estate
My suggestion is that you start to strategize and move towards putting money into some or all of the above areas of earning a return on your money (and the other areas I haven’t listed). A diversified portfolio of cash flowing assets is a great way to significant wealth.
Therefore, I encourage you to keep on with your extreme frugality and savings. Instead of paying the extra money to a credit card company, you can pay yourself and invest in assets. Give yourself a pat on the back for getting out of debt, now re-focus and re-energize yourself to move towards the real finish line of your financial journey!
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