Debt Elimination: Step 0 - Stop All Retirement Investing

So, right now you might be saying, "Let me get this straight... You want me to stop ALL retirement investing?!"

Yes, that’s right I want you to stop investing for now. "But why?”, you might be asking. 

Because, if you’ve decided you’re sick of your debt and that it has to go, the only way to do it successfully and for all time is with seriously focused intensity. 

That focused intensity in this process is going to boil down 8 steps that you MUST work in order and one-at-a-time. 

Look, you’re likely reading this because:

1. You REALLY want to address your financial situation and ultimately get out of debt.
2. You're looking to do it in the shortest amount of time with the least amount of suffering.

Does that sound accurate?

The hard cold truth is that process of getting out of debt is difficult and many people give up. I see it all the time as a coach and it makes me really sad.

I desperately don’t want you to give up. That’s why I want you to focus on one step at a time and give every ounce of energy to the step you’re on.

So, to give you some context, here are those 8 steps in order.

The 8 Steps To Erase Debt

1. Stop All Retirement Investing (Until Step 4)
2. Build A Budget
3. Starter Emergency Fund of $1000
4. Eliminate Debts Smallest To Largest (a.k.a The Debt Snowball)
5. Full Emergency Fund of 3-6+ Months’ Expenses
6. Invest A Minimum of 15% Income Into Retirement Accounts (and increase savings rate to 50%+ if possible)
7. College Funding (if applicable)
8. Pay Off The Home Mortgage
9. Build Wealth, Serve and Be Ridiculously Generous

The 'Company Match' Argument

"But, I get a 6% match from my company! Do you really want for me to give that up?”

Yes, I do. For a short period of time  (hopefully).

The bottom line is that you’re wasting energy if you’re trying to save for retirement AND eliminate debt at the same time. 

Think about it for a moment. The interest you’re earning is being eaten alive by the interest you’re paying on your debt. And yes, I’ve heard the argument about the“company match”a million times. 

I eliminated $43k of debt in 2.5 years and have helped thousands of people do the same over the past decade plus.

If you’re dead set against temporarily giving up your company match, the questions you have to ask are: 

1. Do you really want to get out of debt?
2. How fast do you want to get out of debt?"

The best results we’ve seen from clients is when the answers to those questions are “desperately, yes” and “desperately fast”!

The Truth

You’re never going to be able to build even the slightest level of financial momentum while your attention is divided and while your debt is literally stealing from you.

Yes you read that right, your debt is a thief and it’s stealing from you every single day you allow it to linger in your life. 

Who cares if you’re earning 7% on your 401k when the 8-18% credit card or loan or HELOC (Home Equity Line of Credit) interest is eating your lunch.

Believe me when I tell you, if you want to win you're going to have to dig into this thing.

What If You Could Surrender To The Process

Surrender to the process and you’ll be able to build wealth MUCH more quickly once you’ve sacked your thieving debt monster.

And please, don’t take my word for it. Take the time to sit down and actually do the numbers. Add up how much you’re paying in interest versus what you’re getting in your company match. 

Every time we do this with clients, they’re amazed. That cash you’re “investing” needs to be redirected for a time being to get you out of this debt mess. THEN, we can get back to investing with focus and gusto!

Don’t worry about the (hopefully) short amount of times you’re sidelined from contributing to your retirement. The whole point is to get you out of debt asap, so that you can start sending shovel loads of cash into your retirement accounts.

We want you to arrive at retirement with zero debt and truckloads of cash!

Go Ahead And Make The Call To Your 401k Provider 

So, the challenge for today is to call your company’s 401k provider or to go online and stop your contributions (for now).

Once that’s done, we can repurpose those dollars either toward these steps:

1. Build A Budget
2. Starter Emergency Fund of $1000
3. Eliminate Debts Smallest To Largest (a.k.a The Debt Snowball)
4. Full Emergency Fund of 3-6+ Months’ Expenses

Once you’re past, step 4:

5. Invest A Minimum of 15% Income Into Retirement Accounts (and increase savings rate to 50%+ if possible)
6. College Funding (if applicable)
7. Pay Off The Home Mortgage
8. Build Wealth, Serve and Be Ridiculously Generous

So, are you in? Let me know in the comments what was the hardest part about making this decision.

Now, let's take a closer look at our flagship free resource to help you organize, budget, pay off debt and move you toward financial freedom.

The 8 Steps To Obliterate Your Debt

 

This is the blog post that outlines the 8 steps I followed to eliminated $43,000 in debt in 2.5 years.

 

 

And whether this is your first or thousandth time on the blog, I want to make sure you have this “8 Steps” framework that ALL of our content is centered around. 

 

These are the steps I personally followed to obliterate $43,000+ of debt in 2.5 years. 

 

Maybe your number is bigger, maybe it’s smaller. Either way the principles are the same and I want you to have them.

 

0. Stop All Retirement Investing (Until Step 4)

1. Build A Budget

2. Starter Emergency Fund of $1000

3. Eliminate Debts Smallest To Largest (a.k.a The Debt Snowball)

4. Full Emergency Fund of 3-6+ Months’ Expenses

5. Invest A Minimum of 15% Income Into Retirement Accounts (and increase savings rate to 50%+ if possible)

6. College Funding (if applicable)

7. Pay Off The Home Mortgage

8. Build Wealth, Serve, Be Ridiculously Generous And Go FI (Financial Independence)!

 

I’ve created a simple, easy to follow guide that you can use as your foundation as you navigate the absolute annihilation of your debt forever.

  

 

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When You Need More Help

And again, if you’re looking for some resources to get started, you can download our free budgeting forms. Also, if you’re in a place where you’re ready to kick your debt in the teeth, here's the link to our free “8 Steps To Erase Debt” guide for you to use as your foundation.

 

To your freedom,

 

Brad

[email protected]

 

 

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