As a general principle, debt is bad unless
It’s an investment debt, examples of which are,
education loans a mortgage,
a loan to purchase a house or real estate,
for which at least you have a real asset to sell off later,
it can be viewed as a form of saving at the least;
you may be able to build equity over time, and thereby
to increase your net assets position; or
an asset that will produce returns
greater than the cost of servicing the debt,
i.e. your earnings on the asset is greater than interest paid on it;
for example, a business or some form of an investment instrument
that produces an additional and an ongoing stream of income.
Long Term Loans,
credit cards, education loans, business loans, mortgage loans etc.
even for ‘good investment loans’ (debt) have one trap:
the ‘Minimum Monthly Payments’ trap.
‘Minimum Monthly Payment,’
is the amount you are required to pay on your outstanding balance
at regular periods (usually monthly, but also quarterly, yearly, etc.)
over the life of the loan;
meant to at least cover the interest on the loan.
But it may not cover your total monthly interest,
which means the amount you owe could be increasing
even while you are making regular payments!
When you take out a loan, your loan balance
which is your total debt on the loan,
continues to earn interest,
by the day, month, etc. depending on the loan details; it may also
increase when you fail to make a payment
because you get charged a penalty for late or non-payment,
which is then added to your loan balance!
If your minimum payments do not cover the interest,
in each period,
the unpaid interest is usually added to your outstanding balance
(this is called ‘capitalization’ of the interest)
that is, it’s like you took a larger loan in the first place;
future interest payments may be calculated on
the unpaid interest plus the original balance (‘principal’);
which is now the new and higher ‘principal’,
therefore your debt is growing, even as you are making
regular payments towards it!
Example
at 15% annual interest rate computed on each month’s balance, you must pay
$3750 per year in interest (25,000 x 0.15) or
$308 – $312 per month (3750 /365 * 30 days; or $3750 /12 months) or
$500 per month if the minimum payment required is 2%
If you miss one minimum payment,
the $500 may be added to your balance of $25,000
at the end of the period
to become $25,500.
Your annual interest at 15% is now
$3825 per year (25,500 * 0.15) or
$314 – $318 per month (3825 /365 * 30 days; or $3825/12 months) or
$510 per month if the minimum payment required is 2%
Additional fees (penalties) may also be added to your loan balance.
If on the other hand
you are in financial difficulty and ask for reduced payment
that is less than your interest payments,
say you want to make a $100 payment,
instead of the minimum payment of $500
you will be paying less than the interest payment
(of $308 – $312 per month);
your outstanding interest may be capitalized
i.e. added to the initial balance of $25,000:
which is $208 – $212: the difference
between your monthly interest
($308 – $312) and
the $100 you paid
will be added to your balance;
other ‘late penalty’ or ‘non-payment’ fees
may also be added to your balance
other ‘finance’ or ‘financing’ charges
may be added to your balance and
the total loan balance will increase.
Then what looks like a relief (less than the minimum payment)
turns out to be bad for you in the long run
There’s more. Check back tomorrow! Follow me on Twitter , Facebook , and (soon) on YouTube ;
Email me at reach4himwdray@gmail.com
In order to have a meaningful and successful Life after Defeat, Step 1 is to separate Who YOU ARE from WHAT HAPPENED (the event). Now the next steps:
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Take Time to Reflect
Avoid far reaching decisions while you are ‘feeling blue.’
Choices under such conditions are likely to be
emotion driven,
ill advised, and
wrong.
Learn from the experience.
Who to trust
What to do
A better way
Keep Things in Perspective
The Time Perspective
There may be other opportunities.
Take the long view.
How will this look one, two, five, or ten years from now?
How will this look from the other side of eternity?
You may have gone through this in the past,
remember how you made it through then?
The ‘Others’ Perspective
In the past your ‘win’ meant others lost!
Your experience may not be the best,
but it is not the worst either.
Others have survived such things
The ‘God’ Perspective
He lives, he sees, he knows, he understands, and
He is in control
He does not make mistakes
All Things Are Possible with him
Consider Alternatives
Do it again!
Success sometimes (often) comes only after several tries
‘Third time is the charm’ Believe!
Adjust Your Line of Attack (approach)
More and better preparation
Note the ‘signs’ along the way and make adjustments
Change Direction
You may not be a fighter pilot but
you will be able to design the planes they fly in
You may not qualify or be approved to be a doctor
but you will be an excellent nurse practitioner or
a medical technician, or a surgical nurse, etc.
You may not qualify to become an engineer
but you will be an excellent and successful mechanic!
You get the idea!
You can Do this – Let’s Do this!
Contact: reach4himwdray@gmail.com
Step One – Clarify Your Life Goal
Write it down in one or two sentences Separate out the means to the goal from the goal itself
A friend said to me that if an Angel gave her one wish,
she would ask for ‘Money’!
“What will you do with it?” I asked.
“I will open and orphanage,
something I have always wanted to do!” “That’s your life goal, money is only the means to it!”
Step Two – Find Out All You Can About Your Life Goal
List everything you know about it Ask people about it
Talk to those who are already in the industry/occupation/career etc.
Learn as much as you can from those who are already in the activity
Do an internship
Get a coach if possible
Read about it
The internet is your friend – you can find a lot of things there
Take notes
Take courses if they are available
Step Three – Identify Resources Required and Available to Reach Your Life Goal
Time, Skills, Funds, People, Information Sources, Effort (Sweat Equity)
Step Four – Break Up Your Life Goal into Smaller Objectives
Immediate Objectives
Today, tomorrow, and for the next one month!
Intermediate Objectives
One to six months of activities
One semester of school
One season: Summer, Fall, Winter, or Spring (Dry Season or Rainy Season)
Medium Term Objectives
Annual Objectives leading towards your goal
One-to-two-to-three-year plans
Long Term Goal – Your Life Goal
Step Five – Take the First/Next Step
Start each day with these reminders:
“What little thing will I do today towards my Life Goal?” “A Journey of a thousand miles starts with one step” “The only thing we have to fear is fear itself” “I have not failed. I’ve just found 10,000 ways that won’t work.” “Only those who dare to fail greatly can ever achieve greatly.” “But one thing I do: forgetting what lies behind and straining forward to what lies ahead”
St. Paul (Philippians 3.13)
“Take care of the details, but also keep the big picture in mind” ‘The future is now!’
Public Domain (Movie, Albums, etc.)!
You Can Do It! Let’s Do This!!
Email me at gmail at reach4himwdray@gmail.com
Follow me on twitter , facebook , Reach Ministries: @reach4himwdray
Imagine you had a visit from an Angel and he says to you,
“I give you One Wish , one request,
When I was growing up, reading fairy tales where this happens
(sometimes the main character gets one/two/three wishes),
I would twist myself into knots trying to figure out,
“If that was me what will I choose, what will I ask?”
Will I ask for money, Power, looks, fame, friends, mom’s health…?
The question is still valid for adults; your answer will reveal
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Your priorities
Your greatest limitation
Your greatest obstacle
Your greatest desire
Your character
Where you want to be
Your dream life,
something that relates to your Life Goal!
So take the time and try to answer that question:
What is your single most important (above all else) wish right now?
Write down your answer.
Then start planning your life around that answer.
Fairy tales are just that: Tales!
But God working through you can make your dreams come true
Two types of ‘miracles’!
Explosive , one of kind, and all at once miracle!
(these are statistically very rare).
The more likely one is,
Slow, over time, underlying energy, focus, invincible, invisible,
unrelenting divine guidance;
unplanned and unexpected favor, opportunities, contacts,
as you seemingly move by your own planning, and resourcefulness
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Contact me at reach4himwdray@gmail.com if you have a question or for more personal encouragement, guidance, and prayer. Place your name on my prayer list.
Follow me on twitter , and facebook @reach4himwdray; A YouTube Channel is also on the way. Feel free to share this post. Thank You.
So Let’s Do this! You can Do it!!
We are Designed by God to Reach out to Him and to Others; To Reach Out for Love and Towards our Dreams!
