CHAPTER 1

How to Avoid Credit Card Debt

People use credit cards to buy groceries, goshopping, and do many other things. They use creditcards like candy. When people get their credit cardbills, they pay the minimum amount due becausethey become scared and afraid that they will spendmore than they have. These obsessive-compulsivespenders spend money for absolutely no reason.

Most credit card companies give consumerscredit card offers because they know that consumerswill accept them, especially around Easter,Thanksgiving, and Christmas. Up to 75 percent ofpeople who pay the minimum amount due havedebt on credit cards. Paying the minimum amounton a $1,000 balance can lead to more than $500in finance charges. Credit card companies charge14-30 percent in interest. Having more than $5,000in credit card debt could end up costing more than$10,000.

Do you really want to pay almost double theamount of your bill in finance fees? Many peoplewho have credit cards apply for other credit cards.They use multiple credit cards and think they aredoing the right thing. Using multiple credit cards allthe time and only paying the minimum can lead toexceeding the credit limit. If you can't keep up withthe fees, you will soon be filing for bankruptcy.

When people file for bankruptcy, credit cardcompanies love to give them credit. If they go intodebt, they can't file for bankruptcy again for elevenyears unless the court approves it. Once someone filesfor bankruptcy, he or she can't file again for elevenyears, so spend your money wisely and carefully.

Five Ways to Avoid CreditCard Debt

1. Transfer balances. If you have an outstandingbalance with a high interest rate (over 18percent), try to transfer it to another creditcard with a lower interest rate.

2. Pay on time. Pay your credit card balancein full.

3. Use only in emergencies. Only use your creditcard for emergencies.

4. Get help. If you have a spendthrift personalityand spend unnecessarily, get credit counseling.

5. Budget. Set a monthly budget for credit cardspending.

How to Save Money and AchieveFinancial Freedom

When I talk about saving money with my clientsand friends, I always ask them what they would doif they had extra money. They all say they wouldspend it. That is the reason why they are in debtright now.

The economy is down, and social security is inlimbo. How certain are you that there will be socialsecurity when you reach retirement age? I encouragemy readers to save 5-20 percent of their monthlyearnings. Set the money aside—and let it grow.

It's up to us to determine our retirement; don'tdepend on the government. Investing 5-20 percentof your earnings or setting it aside in a special savingsaccount can make you financially secure.

Robert Kiyosaki says, "If you want to besuccessful, get educated."

What Is the Meaning of aCredit Card?

Credit cards should be used only for emergencies.I have seen people use credit cards for all types ofpurchases. That is how people get into debt. Theeconomy has been struggling because many peopleabuse credit cards. Eventually, they file for bankruptcy.

I don't understand why people blame ourgovernment. They don't realize that they got intodebt by themselves—no one forced them to spend.It's a choice. Take responsibility for your bills.

What causes you to have fear?

Job loss?

Divorce?

Insecurity?

Low self-esteem?

I would love to talk about job loss first because,these days, people lose their jobs more frequentlythan in the past. People these days experiencefear in all areas of their lives, including social andwork-related fears.

The biggest fear that people have right nowis losing their jobs, and they are afraid of moneyloss. This creates fear, and once this fear becomesa reality and they must start looking for jobs, hopewill be lost because, then, they are afraid of gettingthe jobs.

About the current economy, things are stillin limbo because people don't want to take thechance and jump in. People have fear. Thereare opportunities out there. Why don't you takethe chance? How do you know if there are stillopportunities if you don't take the chance?

It's always easy to blame others for your ownmistakes and actions. People blame previous andcurrent presidents, but what can you do if you don'ttake action?

Another common cause of fear is rejection by alove interest. Rejection will cause low self-esteem.

Another fear that people have is being alone.This relates to elderly people who want company allthe time, so they spend time shopping, socializing,and so on.

Another major fear occurs when you avoid adifficult question and try to change it.

What Is Fear?

Emotions play an important part in our dailylives. Fear is one such emotion that is preprogrammedinto all animals and people as an instinctual responseto potential danger. When you feel anxiety, it causesfear. Panic is another common cause of fear.

Fear is an emotional state that can lead to severedepression and hopelessness, and it may cause lowself-esteem.

Guilt and fear run side by side. When someonefeels guilty, this will cause fear.

Symptoms of fear include rapid heart rate,increased blood pressure, tightening of muscles,sharpened or redirected senses, dilation of the pupils(to let in more light), and increased sweating.

A common way that people avoid fear is by usingantidepressant medications. That's the easy way out.Antidepressant pills have major side effects that may,themselves, cause fear.

One of my favorite visionaries, Dr. JohnDemartini, explains all about fear:

Fear is the assumption that in thenear or far future you are going toexperience through your passive sensesor imagination, more pain than pleasure,more negatives than positives, more lossesthan gains, more challenge than supportfrom self or other(s).

Job vs. Work

These days, when people look into startinga business, the biggest challenge they face is theword fear. There are a lot of people who have theknowledge and want to start businesses, and oftentheir biggest fear is of not making money, so they tryto find other work to bring in a salary.

For example, if you are looking for a job for overa year and then you finally get a job in the meantime,you are desperate because you are paying rent (or amortgage) and bills. Then you are finally making $10per hour. In this state of mind, you will accept theoffer of $10 per hour.

People don't realize that you are paying tax onthis "$10 per hour," which means you are actuallymaking $8. Do you think you can live on $10 perhour? Do you think you are worth the amountyour boss is paying you? Do you want to make youremployer wealthier?

When your employer or your manager givesyou your paycheck, he or she is not really excited.Employers always give their employees excuses. Thisagain leads to your biggest challenge: fear.

Most people know how important their valuesare, but they don't know that the most important fearis of whether or not their boss is happy with them orif they think their boss is happy. This is the biggestchallenge you may face.

There is a difference between the term job andthe term work.

The term job—"just over broke"—refers tohow you are getting taxed over your salary whileyour values are diminishing. Remember what I saidearlier: Do you think you are worth the amount yourboss is paying you? Your values are more likely thatyou think the amount of money you want to earn isunlimited.

When I listen to others whose cases are similarto what my own was like—who want to leave theircurrent jobs and start their own businesses—theyusually have a problem, even a family problem. Theydo the research on the Internet, getting the bestmarketing plan for their potential business, and theyfear that there will be multiple distributors selling thesame product as theirs. This, again, causes the biggestchallenge in business: fear.

The quickest and most honest way to do businesson this matter is to

• get the best location to start a business (location,location, location is the most important—youneed to open where there is good foot traffic);

• have a financial backer, like someone you reallytrust; and

• develop a product that is unique and that youenjoy and love.

Eight percent of businesses survive the first twoyears. If your business survives the first two years,you will make it in the current market.

The most important rule in business is to havethe best customer service and staff possible. Don'tbe intimidated if multiple venues of the productyou are selling can be found in several places on theInternet. It is a challenge to get the best productout there in the marketplace. If you have the bestcustomer service, you'll be fine.

If you hear someone saying "I have work to do,"he or she usually is a self-contractor. In this case, heor she is called an entrepreneur.

Education

When does someone decide to become anentrepreneur?

Entrepreneurship usually starts forming at ayoung age. I started getting the entrepreneurshipbug at the age of sixteen. I was going to communitycollege while I was still in high school. I studied andlearned how people going to work worry about theirjob statuses.

Then, while I was doing that, I said that I wouldgo to college, get my degree, and start being anentrepreneur. One of my other books, Finding YourOwn Way towards Success, explains how I started myjourney to become an inspired entrepreneur. Don'tlet anyone stop you with your vision and purpose inyour path to success.

The key to being a successful entrepreneur is toknow what you want and to get educated.

Ethics

Another important issue in business is businessethics in order to get the best customer service andsupport.

For example, is amassing financial debt a properway to do business? This is the worst ethics; inmy opinion, credit cards should be used only foremergency use.

In my book Financial Freedom, I explained howpeople abuse this system. I wrote about credit carddebt and how paying only the minimum paymentswill lead to financial hardship when your credit cardgets an outstanding balance and you can't catch upwith your bills. This will lead to fear on how youwill be able to pay your bills. A reason why peoplemay not become entrepreneurs is because their creditis so poor.

When someone tells you not to take actionand start a business, even if you have vision andpurpose in your life, this will create fear and maystop you from doing what you imagine. With thecurrent economy still in limbo, certainly, this willalso create fear and a stoppage on starting any kindof business.

But if you have a unique product that you wantto share in the market, my best suggestion is to stopfacing the biggest challenge—fear—and start actingon your vision. If you don't try it, you'll never knowif you can be successful at it.