101 Ways to Get Out of Debt and on the Road to Wealth

by Ormond, Ashley

• ISBN13: 9781742169361
• ISBN10: 1742169368
• Edition: 1st
• Format: Paperback
• Copyright: 2009-07-20
• Publisher: Wiley

Summary

You can't get on the road to wealth, if your luggage trunk is weighed down by debt! In any economic climate, but certainly in the challenging economic climate which we all face in 2009, we have to get rid of this excess baggage!Eliminating personal debt, such as credit cards, personal, car and credit loans, and getting wealth building debt, such as mortgages, under control is a key element to speeding down the road to wealth. And you can do it! Let Ashley Ormond show you how. In 101 Ways to Get Out of Debt, Ashley Ormond shows you just that - practical, easy solutions to get your debt under control. Each tip is short, sharp and to the point offering readers financial hope and practical solutions amongst the economic doom and gloom.

Author Biography

Ashley Ormond was one of Australia’s first PC-equipped ‘mobile lenders’, starting out in the early 1980s with a fi nancial calculator, a dual-fl oppy drive Compaq portable PC and a portable Epson thermal printer in his car. This was before the age of mobile phones, the internet, Windows, Excel, or even hard drives. It was back in the days when:

• lenders actually analysed each borrower’s ability to repay
• borrowers actually had to have a job or other source of income
• borrowers actually had to have proof of a savings record, proof of income, proof of assets
• lenders had to actually think about how each debt would be repaid, instead of just shovelling money out the door
• lenders actually retained the credit risk and retained the ownership of loans, instead of just selling them to unsuspecting bond-holders on the other side of the world.

His banking and finance career included several senior executive roles at major Australian and international banking and finance groups, including running branch networks, lending operations, product development, pricing and financial control. His formal qualifications include a Bachelor and Masters in Law, a Bachelor of Arts in Economic History and a Graduate Diploma in Applied Finance and Investment. He has also lectured for the Securities Institute of Australia. Since ‘retiring’ at 40, he has been a director of several companies, including listed, private and not-for-profit companies and a charitable foundation.

Ashley is the principal of Investing 101 Pty Ltd, a specialist investment research firm that holds an Australian Financial Services Licence. He is a sought-after speaker and commentator on financial markets and has written two best-selling books on finance: How to Give Your Kids $1 Million Each! and $1 Million for Life.

Table of Contents

About the author	p. xi
the household debt explosion	p. 1
first things first	p. 11
Work out how far in the red you are	p. 13
Compare debts with income	p. 14
Work out your total loan repayment bill	p. 16
Get the facts on all your loans	p. 17
Check your interest rates	p. 19
Add up all those extra fees and charges	p. 20
Sort your debts	p. 21
Prioritise your debts	p. 24
Check your credit rating	p. 26
Make a calendar and set targets	p. 27
mortgages	p. 29
Do the numbers	p. 31
Increase your mortgage repayments	p. 34
Make one-off extra payments	p. 37
Use pay rises to increase your loan repayments	p. 41
Shorten the life of the loan	p. 43
Use your income patterns to pay off sooner	p. 45
Pay fortnightly instead of monthly	p. 47
Shop around for a lower rate	p. 48
Keep repayments flat when rates fall	p. 51
Don't keep switching loans	p. 53
When refinancing, stick with your existing lender if you can	p. 55
Always choose principal-and-interest loans over interest-only loans	p. 56
Stick with floating mortgages	p. 58
Avoid redraw mortgages	p. 60
Be careful of offset accounts	p. 62
Don't use line-of-credit mortgages	p. 64
Beware the honeymoon rate nightmare	p. 66
Don't capitalise loans	p. 68
Upgrade your subprime loan	p. 71
Consolidate debt at your peril!	p. 72
Don't pay for features you don't need	p. 75
Take into account all fees	p. 77
All fees are negotiable	p. 79
Don't count on your partner's income to borrow more	p. 80
Mortgage brokers-spot the double take	p. 82
Check that you are getting the correct rate changes	p. 84
Let a tenant pay the mortgage	p. 85
Consider long-term house-sitting	p. 86
Plan a mortgage-burning party in advance	p. 88
Pay off the mortgage before investing	p. 89
Don't bank on your superannuation fund to pay off the mortgage	p. 93
Let grown-up kids pay part of your mortgage	p. 94
Consider mortgage contributions instead of presents	p. 95
Downsize-smaller house, smaller mortgage	p. 96
Trade up houses, but trade down debt	p. 98
Try the payout two-step	p. 101
Avoid complex mortgage-reduction schemes	p. 102
If you have to sell, stay in control	p. 103
credit cards	p. 105
Find out how much you spend on credit cards	p. 107
Choose the right card for your needs	p. 108
Avoid credit card surfing	p. 108
Never use cash advances	p. 109
Cut up your store cards	p. 110
Never pay just the minimum amount	p. 111
Keep payments flat	p. 113
Use direct debits	p. 114
Check every item on statements	p. 115
Once you've paid it off, cut it up	p. 116
Consider changing to charge cards	p. 117
If you have a charge card, don't take up the credit option	p. 118
Reduce your credit limits	p. 119
Do leave home without it!	p. 120
car loans, personal loans, boat loans and store loans	p. 123
Renegotiate, don't refinance	p. 125
Always pay a cash deposit	p. 126
Never buy new	p. 128
Don't self-insure	p. 130
Don't use store loans	p. 131
If you fall into arrears, tell your lender as soon as possible	p. 132
Get the credit bureau to limit more lending	p. 134
Celebrate each win	p. 135
investment loans	p. 137
Use principal-and-interest loans for investment properties	p. 139
Avoid fixed-rate loans for rental properties	p. 140
Avoid lines of credit for investment properties	p. 141
Use your tax refund	p. 142
Don't use deposit bonds	p. 143
Don't borrow for the holiday house	p. 145
Borrow in the same currency as your income	p. 146
Beware the margin on share loans	p. 149
Use dividends to pay off the principal on share loans	p. 151
small business debts	p. 153
Get your personal finances sorted before starting a business	p. 155
Keep business finances separate	p. 156
Use your business plan	p. 156
Don't make capital purchases using the overdraft	p. 157
Don't extend your lease term too long	p. 158
Avoid high lease residuals	p. 160
When buying a business, do your research	p. 161
Don't borrow to buy a franchise	p. 163
Be careful of line-of-credit mortgages for business	p. 164
Use supplier terms and customer terms sensibly	p. 165
Sell your debtors	p. 167
Maximise depreciation	p. 168
Never pay full price for business equipment	p. 170
Business succession to reduce debt	p. 171
avoiding and minimising debt	p. 173
Maintain an emergency cash fund	p. 175
Use separate accounts for savings goals	p. 176
No deposit, no mortgage	p. 177
Renters, get a 10 to 15 per cent discount on your first home	p. 179
Don't borrow to put money into superannuation	p. 181
Avoid tax-based schemes	p. 182
Be careful if guaranteeing other people's debts	p. 183
Beware the lender who says you can afford a loan	p. 185
the final pay-off	p. 189
useful resources	p. 191
Index	p. 195
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