Categories
Budgeting & Saving

Interview with Zina Kumok Creator of Student Loan Knockout

Zina Kumok is a personal finance freelance writer and blogger at Debt Free After Three. In 2014, she paid off $28,000 worth of student loans in three years. Now, she’s created Student Loan Knockout: A 20-Day Journey to Debt Freedom, a course on how you too can pay off your student loans quickly.

Tell us about your story and why you’ve developed this course.

When I paid off my student loans in three years, friends started asking me how I did it. I knew many of them had been reading my blog, but I realized that there was no concise guide on how millennials can pay off their student loans.

The amount of student debt only gets bigger every year, and I created this course to show millennials that it’s possible for them to become debt free. Millennials on average earn between $30,000 and $35,000 a year. Paying off loans on that salary can seem impossible if you don’t have someone showing you how to do it.

Why is it important for millennials to become debt free?

The sooner you learn how to save, pay off debt and invest, the better off you will be in the long run. Many millennials put off retirement because it seems so far away.

But as you get older, there will be other financial commitments. You might want to buy a house, have a child or move to a new city. Millennials put off becoming financially responsible because they assume an older version of them will be more equipped to handle that, but in reality, putting it off will only make it harder to get on track.

What can people learn from your course?

The course offers specific actions millennials can take to pay off their loans, as well as basic information on topics such as taxes, investing and budgeting. Not only will they learn the difference between a stock and a bond, but they will know how to apply that information to their own lives.

Every step in the course has a targeted action item that users can take, and each step will bring them closer to becoming debt-free.

What else will people get from your course?

They will learn that personal finance is not about being good at math or knowing what an ETF means. It’s about learning how your emotions impact how you spend money and how you can create sustainable habits that will allow you to be financially responsible.

Personal finance is just that - it’s personal. Each person spends money differently, and it’s important to understand how you think about money and how that affects how you spend it.

Readers of YoungFinances can get 15% off the course by using coupon code YOUNGFINANCES. There are three tiers you can purchase - 30-minute a coaching call with me, perfect for those who have more personal questions they want to ask, the basic course and a deluxe package for people who want the course as well as access to me.

Everyone who buys the course will also receive access to a private Facebook group where you can ask questions, share wins and encourage each other.

Originally posted 2016-06-13 12:42:12.

Categories
Investing

How You Can Build Wealth (Use This Millionaire Strategy)

If you want to build wealth it's going to require time and knowledge. There is no get rich quick method. There are a few ways to begin building wealth. Building wealth involves a unique combination of passive income and active income.

Want passive income? Register now to get on the waitlist for my next LIVE passive income class

The Difference Between Passive Income and Active Income

Can You Build Wealth Using Active Income?

Active Income is income you earn based on your own personal efforts to make money by exchanging hours for dollars.

It is the income that comes in when you are actively earning it, but ceases to exist when you stop your earning activity.

That means, if you work you get paid. If you don't work, you don't get paid.

It's a simple concept.

So simple that the majority of humans follow it and exchange their hours for dollars.

For example, you could stand around for 4 hours, pass out samples, and make $200. Or, you could work as a cashier for 4 hours and make $40.

Your choice. Both provide active income.

Earn More | Passive Income

The Problem with Active Income a.k.a. The Rat Race

I first read about the rat race in Robert Kiyosaki's book Rich Dad, Poor Dad.

In the book Kiyosaki describes the cycle of working for money that leads to nowhere, kind of like a rat running on his spin wheel inside his cage.

Working for money and exchanging hours for dollars is the hardest way to make it out of the rat race, and often it's near impossible.

Disagree?

How's it working for you?

This is because once you are in the rat race you spin your wheels to try to maintain or advance your lifestyle and you often create more debt to do so.

Those in the rat race may not know how to get out because they do not know how to use assets and instead they keep creating liabilities.

If you have not read the book Rich Dad, Poor Dad by Robert KiyosakiI recommend it as a must read just to understand the basics of how you must think to build wealth.

See all of my recommended books for personal financial success here.

How to Escape the Rat Race of Chasing Active Income

Most people are not ready to stop working for money, me included.

In the meantime, you can begin building cash for your portfolio. In one of my favorite money books The Richest Man in Babylon by George S. Clason, one of the characters, Bansir, seeks help from Arkad, who is the richest man in Babylon.

Arkad advises the man to pay himself first.

Each time he makes income, he should set aside 10% of that income.

That way, when an opportunity to invest comes his way, he will be ready.

Bansir follows Arkad’s advice and was able to invest in a business venture that provided him with passive income.

It is very difficult, if not impossible, to grow a profitable portfolio without income. Setting aside 10% of every dollar you earn will allow you to grow your investments consistently.

Can You Build Wealth Using Passive Income?

Passive Income is income that not based solely on your ongoing efforts.

It may be a recurring income stream from a one time job, like royalties for a singer, or recurring income from a business that you own.

You might write a book and earn a commission each time someone buys that book.

When you can stop trading hours for dollars and receive dollars even without giving up hours, you will have passive income.

Top 3 Ways to Generate Passive Income

1) Passive Income by Growing a Blog

Believe it or not, growing a blog is a way to generate passive income. This is one of my favorite ways because I created this stream of income right after college.
In order to do be a successful affiliate income generating blogger, you have to create content that converts readers into buyers. Or, you must simply put content in front of a buyer.

(First you must start a blog on WordPress. Here's a tutorial I created that will take you through step-by-step.)

That content would contain an affiliate link. Affiliate income is one of my sources of passive income. (And I'm going to show you exactly how I do it. More details at the bottom of this post.)

To get approved for affiliate relationships, you have to make sure your site is properly set up. And in order to maximize your affiliate income, you have to approach sales in a certain way. It's not complicated, but it does require some education. The learning curve is steep.

2) Passive Income by Using Dividends

Dividends can help you to make passive income. Some companies issue their stock with a dividend attached.

If you own the stock, they will pay you directly in cash, or additional shares, from the earnings that they make for that quarter or year.

If you have the right stocks you can also benefit from price appreciation.

Ready to start investing? Take this quiz and find your investing compatibility match.

The stock price and your overall portfolio will increase when the company does well. And even if the stock price declines, you will still receive the dividend as long as the company does not cancel it.

Some investors will not purchase a stock if it does not come with a dividend attached.

3) Passive Income from Teaching

When I say teaching, I don't mean standing in front of a class. That would be considered active income. Instead, you should figure out what you're good at then create a course on that topic. You can then sell that course over and over again. And each time you make a sale, you earn income.
When you are actively marketing your course it's not considered passive income. But if you sell your course through a platform where a buyer can browse and find your class, then it's considered passive income.

Most investors use a combination of passive income sources to diversify their risk.

It is highly risky to depend on the cash flow from a course, dividend paying stock, or blog only.

Building Wealth

So there you have it.

Passive Income and Active Income.

The two main ways to build wealth mean you'll either be using active income or growing passive income.

Those who use active income to build wealth will find that there are simply not enough hours in a day to trade for the wealth that they want.

They will continue to spin their wheels in the rat race until they give up in frustration.

The smart investors that learn to use passive income to build wealth will see their net worth grow with less and less work on their part.

Building a profitable portfolio with passive income investments is the key to building wealth. That might be an income producing blog, a course that you've created, or a portfolio filled with dividend stocks.

That is why I recommend starting with your personal goals. What do you want your finances to look like?

In order to become a financial success, you have to invest in yourself and be willing to learn.

Now it's your turn to choose.

Will you build wealth using passive income strategies?

Or will you stick with a job that requires active hours for you to earn?

If you're determined to earn more money via passive income, then you're in the right place. I'm going to show you exactly how to do it.

Register now to get on the waitlist for my next LIVE passive income class

Originally posted 2016-06-06 10:00:14.

Categories
Budgeting & Saving

How I Paid off $22,000 of Credit Card Debt

This was originally posted on September 22, 2014.

It's done! After 6 years of growing a debt monster, and 3 years of attacking it with payments, I can finally say that I have paid off all of my credit card debt.

Whew!

When I made that first swipe I don't think I knew how much it would affect my life. Living with credit card debt that I could not afford cost me a lot of stress, worry, and unnecessary cash. Yes, it was expensive to be in debt. At one point I had a 24% interest rate on a credit card with a large balance.

I knew that I wanted to not only get rid of the debt, but set myself up for success in the future. I've seen friends eliminate debt and fall into the same habits and patterns that caused the debt in the first place. I knew that if I learned how to use credit wisely that it could become a friend and not a foe.

So with that in mind, here's what I did to tackle $22,000 of credit card debt.

Amazing story! I need to start tackling my debt. This was a good step by step guide.

Setting the Debt Deadline

Firstly, I set a date. I decided that I wanted to pay everything off within three years. That made it easy to figure out how much I wanted to pay towards my debt with each check. I chose to go with a consumer credit counseling service. They negotiated lower interest rates with my creditors so I could pay the balances down immediately instead of wasting money on interest.

However, that meant that I had to close all of my credit cards and not open a new line of credit. Closing credit cards with a large balance can hurt your credit score.

My credit score was already shot so that really did not matter to me. Getting rid of debt mattered more.

But be honest with yourself. By cheating and using your cards while paying them off you are only hurting yourself.

Creating the Cash Budget

Secondly, I committed to using all cash. I knew that I was addicted to using credit and there was no point in trying to get out of debt while I was still using it. I had already gotten rid of all of my credit cards and I created a budget that would allow me to use only cash.

I maxed out my budget categories in saving and left myself with enough cash to cover my essential expenses. That includes housing, food, and clothing.

After shopping for 6 years straight, I'm pretty sure I had all the clothing that I needed.

I also left myself a small cushion of about 50 dollars per paycheck. This money was not for anything specific and it gave me a feeling of space.

Woosah...

Speaking of shopping, I knew that I had to mentally change the way that I handled money, credit, and debt.

Needs vs Wants

During the first few months, I started to teach myself how to distinguish needs versus wants. I prevented myself from impulse shopping with a simple rule. If I wanted to purchase something that was not on my shopping list or was not a part of my intended trip, then I was not allowed to buy it.

Plain and simple.

I defined a need as something that would help me either budget better, save or invest better, or something that I would use each day for a purpose.

Toothbrush? ok.

Fancy 70 dollar electrical toothbrush? Not ok.

By curbing my impulse shopping and learning to use money for needs instead of just wants, I created better balance in my spending.

Building an Emergency Cushion

Finally, I was honest with myself. I didn't try to live super frugal or put all of my extra cash towards my debt. I knew that if I simply stuck with my plan, I would have everything paid off on the date that I self-imposed.

I didn't stress myself.

I still traveled, dined out with friends and put money towards investing and saving.

Yes. I still invested.

This was very important for me. As a person with a financial background, I understand the importance of compounding interest. I used time to my advantage.

Looking back at the returns of the last 3 years, it was the best decision I could have made.

I know you can do it too! I think you find yourself lacking in motivation because you are allowing the debt to take over your fun. Don't restrict yourself to the point where you hate budgeting.

Start with a small 'fun budget' and allow it to grow as you pay down debt.

Are you in the process of paying down debt? What tips would you share with others?

Choosing a Debt Management Plan to Help

Here's how I used a debt management plan to conquer my debt.
How I Dumped Debt with a Debt Management Plan | Young Finances
One of the most important tools in my pay off debt plan was a service that helped me create a three year plan to pay off the debt.

I found the consumer credit counseling service through a friend of mine. She had used the service to pay off her debt and she also improved her credit score in the process.  I decided to check them out and I set up an in person meeting to discuss my debt and plan goals with a counselor.

The counselor also helped me create a budget and managed the details every step of the way.

The service I used subsequently merged into ClearPoint Credit Counseling Solutions and I completed my debt management plan with them. Here's how I paid off $22,000 of credit card debt in three years and how you can do it too using a debt management plan.

 

1) Gather all of your records

The first step in starting a debt management plan involves gathering all of your records. You will need your latest credit card statements, which should include the address to send payments. You will also need to make sure that you include all of your creditors in your debt management plan. I was able to exclude my car loan, but all of my other creditors were included. I had to track down a few statements since some of my credit cards had fallen into collections. Once I had everything, I was ready to start my debt management program.

2) Talk to your creditors and your counselor

If you are getting debt collection calls, don't be afraid to answer them. I simply answered each call and let the creditor know that I was working with a credit counseling service. I also made it a point to contact my counselor about any changes to payment addresses, or other changes. She kept up with everything and that made things really easy on me.

However, they did all of the negotiations for me, getting fee concessions, and negotiating most of my interest rates down to zero.

3) Create your budget

As you are paying off your debt, you may feel tempted to overspend or stop your payments to spend the money elsewhere.

Don't do it!

Trust me, the three years will fly by quickly and you will be so happy to be debt free afterwards. Instead, create a budget along with your counselor to help you stay on track. I used the budget that they provided to help me get started and then as I learned what works best for me, I created my own budget with room for investing in my employer sponsored 401k plan. Doing this allowed me to take advantage of free employer match money and invest in the markets.

The process of paying off debt can be very difficult but with the help of a credit counseling service like ClearPoint, it can be much easier.

How about you? Have you used a debt management plan to pay off debt?

 

This is my personal experience with ClearPoint. ClearPoint is a trusted partner. Please see our disclaimer regarding trusted partners.

Originally posted 2016-06-06 08:00:55.

Categories
Earn Extra Income

How to Make Extra Money As a Brand Ambassador

When I was in college, I kept looking for ways to make extra money.

I had to pay for books, food, and the occasional night out.

Can you relate?

Here’s what I did to make $20/hour and more during college as a brand ambassador.

Click the photo for this exclusive video training!

Find out…

How I learned to make $20 an hour during college.

The first thing you need to get started.

What KEYWORDS to type into Google to find these positions

Where to go to get started

When you can expect to be paid

This training is for men and women as well!

Originally posted 2016-06-05 15:48:35.

Categories
Investing

How to Start Investing (Even If You’re a College Student!)

In my opinion college students are the best investors. They are constantly learning and not afraid to make mistakes. As you get a college education, you should be getting an education in building wealth. You don’t need tons of capital to start your investing journey: you just have to know how to do it. This article will focus on the most popular option for college investors: online investing If you are wondering how can a college student invest here are some tips to get you started.

How Can a College Student Invest Starting with Stocks?

When you first start investing you will most likely want to start with stocks. The reason most first time investors start with stocks is that they are easy to relate to and they are widely discussed. You can start up a conversation about stocks with almost anyone and they should be able to voice at least an opinion. While some believe that there are certain best stocks for college students, I believe a general education on how to invest is important.

Want to invest but not sure where to start? Take this Investing Compatibility Quiz to figure out your investing style.

Originally posted 2016-06-05 15:44:01.

Categories
Earn Extra Income

How To Start a Blog and Make Your First $100

Want to start a blog? So did I when I graduated college.

When I first started this blog more than 5 years ago, I had no idea that it would grow into what it is now.

Because of the work that I put into this blog, I was able to use the extra side-hustle income to pay of over $32,000 of credit card debt. (You can read my story here.) Then each month my income continued to grow.

First I consistently made $500 a month.

Then, I saw my first $1,000 month and again and again I reached an extra thousand dollars per month.

After that, I looked for ways to increase my income and hit my goal at the time which was to earn $5,000 per month. That would allow me to leave my full time job and work for myself.

That happened after the 4-year mark.

All of that came from the blog and what I learned from it.

Originally posted 2016-06-05 15:42:09.