Our unique and proprietary financial planning system, The 4×4 Financial Independence Plan sm is comprised of 4 essential elements and 4 sequential steps as follows:
The 4 Essential Elements
The 4 Sequential Steps
The focus of this posted is on Step #2 of this process, “Eliminating Debt“, in particular bad debt which we call “Reductive Debt“. Reductive debt is debt that people obtain to acquire things we either consume or that lose value. A good example of this would be a car loan used to purchase a car.
Conversely, good debt which we refer to as “Productive Debt” is debt used to acquire assets that appreciate in value and/or provide income. A good example of Productive Debt would be a mortgage used to acquire income producing real estate.
To assist us in completing he 2nd step of our The 4×4 Financial Independence Plan sm and, eliminating our clients’ Reductive Debt, we generally will implement a very simple process called “The Debt Snowball“. The concept behind The Debt Snowball is simple.
- Create a simple Plan
- Stick with it
Our plan is to determine how much of one’s monthly income can be consistently committed to eliminating their Reductive Debt. Then, we focus that excess money on the smallest debt first. This focus on paying off that debt provides us with even more money to pay off the next debt, snowballing the payments on then next smallest debt until it is paid off as well. As our available cash to payoff Reductive debt continues to grow and snowball even more we are able to crush all the outstanding debts until they are completely gone…forever.
Click on the link below to watch a quick video I’ve created to illustrate this process:
Then, do 3 things.
- If you have Reductive Debt, follow our plan to eliminate if from your life forever.
- Celebrate your “wins” as you crush your debt.
- Pass the link to this post along to everyone you know so that they can enjoy the same benefits and financial freedom that others have experienced as well.