Tag Archives: planning

The Minimum Monthly Payment Trap!!

As a general principle, debt is bad unless

  • It’s an investment debt, examples of which are,
    • education loans in an area and, in an amount that makes economic sense
    • 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.

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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, say you hold a balance of $25,000 on a credit card/loan
    • 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%
        • ($25,000 * 0.15)
    • 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!

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Email me at reach4himwdray@gmail.com

Life After Defeat?… Yes! (2)

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?
          • You can do it again!
    • 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
        • so can you!
    • The ‘God’ Perspective
      • He lives, he sees, he knows, he understands, and
        • he loves YOU!
      • 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

The Next Steps Towards Your Life Goal!

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!”
            • I said.

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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)

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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?”
      • That’s mine
    • “A Journey of a thousand miles starts with one step”
      • Lao Tzu
    • “The only thing we have to fear is fear itself”
      • Franklin D. Roosevelt
    • “I have not failed. I’ve just found 10,000 ways that won’t work.”
      •  Thomas A. Edison
    • “Only those who dare to fail greatly can ever achieve greatly.” 
      • Robert F. Kennedy
    • “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”
      • That’s mine also 
    • ‘The future is now!’
      • Public Domain (Movie, Albums, etc.)!

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You Can Do It!  Let’s Do This!!

Email me at gmail at reach4himwdray@gmail.com

Follow me on twitter, facebook, Reach Ministries:  @reach4himwdray

How to Determine Your Life Goal!

Imagine you had a visit from an Angel and he says to you,

  • “I give you One Wish, one request,
    • and it WILL be granted!
    • Ask whatever you will, but
    • there are no do-overs,
      • you only get one chance at it!”
    • What will you ask for?

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      Photo by icon0.com on Pexels.com

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
      • towards your Goal.

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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!!