The Debt Reversal Plan is what I titled my method of completely eliminating debt AND becoming wealthy in the process.
It’s about financial freedom and winning instead of losing.
You can scroll down for the process, but first I need to explain how I came about this method.
It’s quite simple.
I screwed up royally when I was in my early thirties. I was impulsive with my spending and I made a lot of stupid mistakes. I ended up deeply in debt and eventually had to declare personal bankruptcy.
Declaring bankruptcy turned out to be the positive turning point in my life.
You’re saying WHAT?!
How Could Bankruptcy Be A Good Thing?
I know it sounds ridiculous.
Personal bankruptcy can be a good thing!
At the time it was horrible of course – I thought it was the end of the world. I even contemplated suicide – that’s how bad it got.
What I didn’t know at the time was that this horrible event would be the catalyst for a complete reversal of my personal finances.
When I had no credit it forced me to live within my means.
I didn’t need to spend money on “stuff” to be happy.
My life was simpler and more expansive.
I had to entertain myself with activities that didn’t cost a dime – things like taking a walk in the park, reading, taking a drive for the sake of people watching and just getting out (albeit my car wasn’t exactly inspiring at the time).
Not being able to spend money on credit made me realize how much I had been missing in life.
I even started reading self help books – learning about myself and what I had done in the past that caused my money problems.
Because I had no credit for seven years it gave me plenty of time to contemplate a different lifestyle, with a different set of priorities.
It forced me to come up with a new way of living – a way that stopped frivolous spending and helped create wealth.
It took me three years of soul searching but I finally came up with an idea on what to do.
After three years studying my spending patterns (and fixed income) I came up with a plan to change my life for the better, and help the people around me.
The plan was quite simple in theory.
Not so simple in practice.
Quit spending money on my hobbies and passions, and start MAKING money with that time.
Some guys spend money:
- drinking with friends
- playing sports
- building cars
My passion was playing music.
I spent crazy amounts of time AND my hard earned money recording, buying gear, traveling, hanging out in clubs, and hiring other players (not to mention drinking and smoking pot).
I decided to give up music and find a passion that would earn a second income instead of costing our family money. The results were astounding.
Think about it – instead of spending $100 in the bar or on some gear, you make $100 dollars with your new hobby. You are up $200.
The most important thing about my debt reversal idea was FINDING a money making hobby that I would really enjoy. If you don’t get this decision right it won’t likely work for you. You have to thoroughly enjoy what ever activity you choose to make money with.
In my case it was blogging.
I Never Imagined Financial Freedom
Once I decided on what my new passion was going to be I dove head first into the deep end.
I bought books, read countless websites, went to seminars, signed up for forums on the subject, and made personal relationships with existing bloggers who made a profit.
At one point my family thought I was falling into my OCD abyss again because I was sometimes on the computer for 15 – 18 hours a day.
It was a long learning curve because yours truly isn’t the sharpest stick in the shed.
When I finally started to earn just a tiny amount of income online I was over the moon with excitement.
My first check was for $10 from a sort of pyramid scheme. It was silly but it proved you could make money with that “series of tubes“.
This was back in the 1990’s so everything I was dreaming of was still in it’s infancy.
I could tell my friends and family thought I was crazy but my first $10 dollars told me I wasn’t. My theory at the time was obvious – if I can make $10 dollars I can make $100,000.
Just last night my wife I figured out how much we’ve profited from the Internet in the last 12 years. We were surprised to find out that we’ve profited (after expenses) just north of $2,000,000 dollars.
Yep. That’s six glorious zeros. But we didn’t start out making much at all. In fact we went into more debt temporarily.
Two million dollars sounds like a wild amount of money but if you consider 12 years equals 144 months that’s an average of $14000 dollars a month. So not that amazing for a small business really. It feels amazing though when you come from a worker bee background like my wife and I did.
I started making $10 a day, then $20, then $50.
I’ll never forget the $50 dollar a day goal because it was the dead of winter and I was up north working in a very cold aircraft hangar.
There were no iPhones yet so I would check online commissions as often as I could from the tool room computer terminal. I remember calling my wife telling her we hit $50 in one day.
I was so excited to be alive.
Once again – I figured if I could make $1500 month why couldn’t I make $15000 a month. Why not!
And we did.
My wife started helping me with our online business and three years after the initial dream of working from home on a computer I quit my job.
Two years later my wife quit her job. These were REALLY exciting times.
And the best part is my debt was under control.
A few years later my credit rating reset and I had credit again!
I got a credit card again, but I rarely used it – I was so busy working on our business I didn’t care about spending money. I used the credit card for online services, hotels, and that’s about it.
Later we paid off our mortgage, SUV, and RV.
Today we have zero debt and $350,000 in savings. We both work from home or wherever there is an Internet connection.
I know it’s bragging and that’s not supposed to be nice, but how else is someone going to get inspired to reverse their debtor lifestyle, unless they hear stories like mine.
Our example proves it can be done and below I’ll tell you about Andrea in Lansing MI who used the same idea.
What The Skeptics Will Say
Sceptics will say,
“Your so-called debt reversal plan might have worked for you but that doesn’t mean it will work for others. And by the way….you sir are a braggart and a douchebag.”
And I would respond with,
“You’re wrong on the first part and sort of right on the last part.”
1.) Nope. Anybody can do the same thing. All they have to do is discover something they enjoy doing that makea money. As long as it’s a realistic amount of income – capable of replacing and/or surpassing their day job earnings.
2.) Yep. Guilty as charged – I get so excited when I talk about our financial turnaround it seems to others like I’m bragging. Maybe I sound like another douchebag who can’t wait to tell people how great his life is.
The truth is that I rarely EVER talk about our finances with friends, family, or acquaintances.
It doesn’t go over well.
Pretty soon they want to puke or punch me in the face.
Or they get dollar signs in their eyes and they won’t leave me alone.
The funny thing is that we’re really not rich in the grand scheme of things. It’s just a relative comparison to what my background.
I come from a family of worker bee employees and there was never a lot of extras to be had.
People who come from wealthy backgrounds would laugh at what we make.
Debt Reversal In Lansing Michigan
So I want to head over to Lansing Michigan where Andrea changed her life forever.
She was a single mom with three children trying to make it but she failed miserably. She was only 17 when she had her first kid, and by the time she was 23 years old she had three mouths to feed and two different fathers – both of which left her to raise the children on her own.
Luckily for Andrea her mom helped her with babysitting so she had at least a chance of pursuing a different lifestyle.
What she did was amazing.
I introduced her to the idea of reversing her debtor lifestyle. I suggested she get rid of all her credit cards except for one and start negotiating with her creditors to deal with her debt. Then I suggested she think long and hard about an activity she enjoys – one that could make money.
At the time Andrea was living on social assistance and her debt was overwhelming. She was stressed out of her mind and very unhappy so I asked her if there was any mundane chores that she actually enjoyed doing. She said she liked cutting the grass.
She said for some weird reason she loved cutting the grass. She liked the fresh air, exercise, the smell of grass clippings, and seeing the finished lawn.
I get it! For some reason I like washing dishes. I get my hands in the warm soapy water and I find it to be a relaxing chore.
You guessed it. I suggested she start asking her neighbors if they were willing to pay her to cut their grass for them. Lo and behold she found two neighbours that did.
Then It Took Off
Over next two summer seasons Andrea really pumped up the volume. She had 16 clients and she was paying her sister to help manage her growing small business. Five years later she had 120 clients and a staff of 8 working for her. Her debt was long gone by then.
Some of those clients were commercial too and she now used rider mowers for some yards.
She had to rent some space to run her growing business of course, and she was now taking on HEALTHY debt. Not a lot of debt – just enough so she could buy more equipment and advertising. She didn’t take much debt relative to her cash flow and she was writing off ALL OF IT on her taxes.
Andrea was amazed to find out how much her life had changed for the better. No longer did she wake up in the morning in a fog of anxiety. She leapt out of bed, got her kids ready for school, got herself ready for work and ran out the door. She was now THRIVING and her bank balance grew as a by-product of passion.
Being Debt Free Is A By-Product Of Passion
Nothing in this world changes lives more than passion – in good and bad ways (Hitler was a passion prick for sure) but when you can be passionate about something positive that earns money you’ve already “made it”.
You don’t need to be rich to “make it” either. If you’re free doing something you love then there is no higher place you can be. All the money in the world won’t make you happier.
True happiness is freedom.
When someone is 100% debt free it’s because they won a lottery, inherited it, earned it, or stole it. Only a lottery doesn’t involve passion and that’s why it’s the least satisfying way to come into wealth. Even thieves are passionate about their dirty deeds – it’s pretty hard to be proud of just winning a lottery.
Most of the time being debt free and/or wealthy is simply a by-product of somebody’s passion. If you are born into wealth someone in your family was extremely passionate about their work.
If a wealthy person’s only passion is to become rich they often end up drowning in an empty pool. The best way to get rich is by working at some kind of activity you really enjoy. Find that thing yourself and you will never be a bad debtor again.
Brent Truitt is a full time Internet marketer and part time blogger who lives in Canada and the United States. You can connect with him on Twitter @IAmBrentTruitt