Chain of Wealth

Almost every person on Earth will have debt in one way or another.

Today I’m going to show you something really special that is going to change your life:

This guide is for people looking to master debt and free up their finances.

Before we dive into it, I’d like to tell you a story.

My girlfriend Katie is on her journey to becoming debt free using the steps below and she’s going to pay back over $30,000 in the next 12 months.

Pretty cool right?

The unfortunately truth today: many people hear the word debt and have a very sour taste in their mouth.

Debt doesn’t always need to have such a negative connotation and in fact, in some cases it can actually help you!

Today I’m going to teach you how to use debt to your advantage and even profit off it.

This guide is broken down into bite size pieces or chapters to teach you everything you need to know to get out of debt in the fastest time possible.

Chapter 1: The Mindset

Before diving into any kind of techniques and methods – if your mindset is not there to become debt free; it simply won’t happen.

You need to be dedicated and motivated to get out of debt and cut back on expenses if you want to do it quickly.

You have no idea how many people are so far in debt they don’t even open up their statements.

Imagine this:
Waking up a few months or years from now completely debt free.

The first step to any action is a plan and a positive mindset.

Sounds incredible right?

Well it’s completely doable and it starts with TODAY.

It might be important to start making some lifestyle changes to become wealthy, so start changing your mindset today.

If you’re looking for inspiration check out my personal finance podcast where I interview inspirational people twice a week.

Over the next few chapter I’m going to teach you everything you need to know and do to become debt free.

Chapter 2: The Worst Case Scenario

This for a lot of people is the toughest step.

You need to collect all debts you have in one place. I’m not talking about balance transfers or anything like that, but rather open up a spreadsheet and write down all your debts.

Include important details and arrange them with the following headers:
Debt Name; Balance Outstanding; Interest Rate; Monthly Payment; Months currently left

The first four you can get straight from your statements and will have a positive balance except for the monthly repayment.

The last one you might be unsure of – fear not there’s an easy formula you can use to see how many months you currently have left.

=NPER(rate, pmt, pv)

The rate is your interest rate divided by 12.

Pmt is your monthly payment including interest (or the actual amount you pay).

Pv is the balance outstanding on the loan.

Once you hit enter it will calculate the number of months you have left to pay off the current balance outstanding.

Once you’ve got all your debts written down total up the balance column to see how much debt you currently hold.

Now make yourself a promise – that number is going to go down dramatically every month.

If you feel like all hope is lost, I’d recommend considering if bankruptcy is right for you. However – I would STRONGLY URGE AGAINST THIS unless doing so is completely unavoidable.

There are loads of stories about people paying back huge amounts of debt, so do your research before picking the “easy” way out as declaring bankruptcy can have a devastating effect on your credit.

In Chapter 3 and onwards I’m going to show you how you can structure your debt repayments to pay back debt in the fastest way possible.

Chapter 3: Categorizing your Debt

There are two types of debt – secured and unsecured.

Secured debt means that there is an asset backing the debt, as an example a house is an asset that backs your mortgage, whereas a student loan is not asset backed.

Categorize the list you created above in chapter 2 into these different categories.

Now that they’re in two categories, look at the difference in the interest rates for the two categories. You will find that secured debt should as a whole carry a much lower interest rate opposed to unsecured debt.

Here’s a quick lesson on how debt works:

The interest rate is the cost of having debt, so a higher interest rate means that you are paying more for that respective line of credit.

Loans that have higher interest rates and larger balances are where you are wasting the most amount of your money. By making smaller payments you are paying more for them each month because of the higher interest rate.

Every month when you make a payment there are two components to the payment – interest and capital.

The interest amount you pay each month will be based on your total capital balance or outstanding balance.

So if you only pay the minimum payment each month your capital balance will reduce much slower and therefore over a long period of time you’ll end up spending a fortune on interest repayments- and that is not good.

Chapter 4: Am I Really Getting the Best Rate?

What many people don’t know is even if they have existing debt lines their interest rate doesn’t have to be what it is.

Say you have a student loan of $35,000.

You got that loan when you were 17 years old and did not have an established credit history and therefore you had a bad credit score.

Let’s say you borrowed that debt at 8% – yikes!

Well, a few years down the line you’re 27. You’ve been working for a few years after graduating college and now your credit score has significantly improved.

Why are you still paying 8% on your student loan if you’re seen as a much lower risk by the financial institutions?

The simple answer: because nobody has told you that you’re a better borrower and the financial institution that is earning 8% is making some very easy money off you.

If you were to approach ABC Bank and said to them you have $35,000 worth of debt and will they refinance your loan.

ABC Bank will look at your debt and the fact that you have a much better credit score and there’s a very good chance they’ll refinance you at a lower interest rate, let’s say in this case they offer you 4.25%.

ABC Bank will pay your old financial institution and buy you out of the loan because they would rather earn 4.25% from you than nothing. After all this is how banks make money!

That lower interest rate means that every month you will need to pay less interest to the bank, meaning that you can pay back more capital.

Therefore, when the next month comes around you are paying back even less interest than before!

The point of the above is you need to do your homework with each line of credit you have.

Check if you’ve got the best rate and shop around.

This might take a knock on your credit score, but it’s one of the lowest ranking factors and as such it’s not as big of a deal.

Chapter 5: Planning Your Repayments

Now that you’ve negotiated better rates on your debt, your goal is to pay back your debt with the highest interest rates first.

The first thing you should do is consider if you can downsize any of your secured debt.

If you have assets that are bad – say a house that is losing value, or a car with negative equity it might be a good idea to get rid of these assets quickly so your total debt to income ratio decreases.

Sure, you still need somewhere to sleep and a way to get to work, but is that massive house or luxury car really what you need or is it what you want?

Don’t waste your money on assets that are over the top unless there is a huge upside – e.g. the housing market went up 20% in one year.
Rather scale back until you’re debt free.

Getting a roommate can often really help out, so look into other income streams.

One amazing method of doing this is to become an Airbnb Host, Katie did this and earned over $500 every month as a side hustle.

Start making bigger payments into your debts with higher balances and interest rates.

Chapter 6: Reevaluate

Nobody’s position stays the same. Over time your finances will change – you might have a huge medical bill because you unexpectantly got sick.

Life happens and it’s completely normal.

However, when anything major changes, fire up that computer with your spreadsheet and edit the details.

Maybe you got a better rate or managed to sell the house – document it.

You should setup time every month to review your plan and make sure you’re on track.

Once you’re done repeat steps 2 to 6.

Chapter 7: Patience.

Rome wasn’t built in a day.

Paying back debt takes time and patience.

Always remember it’s a marathon and NOT a sprint. The real secret to making sure you do become debt free is coming up with a plan and constantly reviewing and tweaking it.

You might find that you were harsh on yourself and your plan was too ambitious when you set it up, and that’s completely ok!

Revise your plan and try again the next month making sure that your debt repayments take priority over expenses that are more luxurious.

With the right attitude you can do it and become debt free.

I’d love to hear your comments below and your story.


The race to becoming debt free isn’t a sprint, it’s a marathon.

You need to prepare yourself and become equipped with a solid plan and strategy if you’re serious about becoming debt free.

I’d love to hear your debt story.

Have you paid back all your debt or if you’re still on your journey?

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