Money Meltdown: How To Destroy Your Wealth In Six Easy Steps And How To Avoid It! by Archie Dove

Author:Archie Dove [Неизв.]
Language: eng
Format: epub
Published: 2015-11-02T05:00:00+00:00

CHAPTER TEN

Glacial Recovery

Buddy—So how are you going to recover from all of this?

Archie—Slowly, Buddy, slowly. What else can I do? I think it’s like turning a ship around. Do you know how you stop a ship from running into an iceberg? You don’t just slam on the breaks like you do with a car, you have to slam the ship into reverse just to get it to stop because of the forward motion of the ship on the water—you know that, don’t you, Buddy?

Buddy—I hadn’t thought about it really, but now that you mention it, I suppose it makes sense.

Archie—The moment you realize what a fool you’ve been is a little like that. Things don’t just stop. Interest keeps on accruing on your loans, you still need to pay the bills, and, in my case at least, the vampires still keep calling. In short, it gets worse before it gets better.

Reversing the Ship While Trying Not To Sink It

Now I’ve already spoken a little about how if you get a job, which you have to do to get back on your feet, there may be disappointingly little left after taxes with which to pay your loans back. That’s the catastrophe. It’s so quick to run up massive debts, but it’s so very slow to pay them off when things go wrong.

Remember, if you have €5k left after taxes to pay off your debts, you’re doing better than the vast majority of the population. You can run up €100k of debts in a day. It would then take 20 years worth of savings to pay them off—a quarter of a lifetime—and I haven’t even considered the interest on the loan.

The best way to pay off a loan, the very best way on this Earth, is not to incur it in the first place. Now I know you are probably thinking I’ve just cheated again, and I suppose I have, but just a little. I am going to talk about a little thing called life-cycle theory in the the next chapter and why I think it is flawed, not totally flawed but a little flawed, so let’s park the argument for the moment.

For the sake of this topic, let’s just say that you have a plethora of debts for whatever reason and you don’t know where to begin paying them off.

I don’t need to explain too much about this because it is extremely well-covered on the internet. It is called the “snowball method.” If you have got yourself into horrendous debt from multiple sources, then look it up, plug in your details in any of the multiple websites, stick to the plan, and do not incur any more debt under any circumstances. A quick rundown of the two methods advocated is as follows:

ONE—Highest Interest First

This is where you strive as much as you possibly can to pay down the loan with the highest interest first before beginning on the others (of course, you need to pay any minimum payments on all your loans to avoid getting into trouble first, and this you must do).

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