The 5-Minute Debt Solution: Get Out Fast & Stay Out Forever

By Chris Hendrickson and Tony Robbins

“An outstanding roadmap . . . you’ll learn both the mechanics and the psychology of effective money management—how to build and maintain your money.” —Anthony Robbins, #1 New York Times–bestselling author of Money: Master the Game: 7 Simple Steps to Financial Freedom
 
What would your life be like if you were debt free? What if you had a way to create a simple plan for not only debt freedom, but financial independence as well? Simplicity is sustainability. The 5-Minute Debt Solution will help you create a simple plan for debt-free living and financial security for you and your family. With this book as your guide, financial success is as easy as one, two, three.

“In finances, it’s hard to see the forest through the trees, but The 5-Minute Debt Solution gives you just that opportunity.” —Erin Brockovich, author of Take it From Me: Life’s a Struggle But You Can Win

“This program is a required ritual for anyone who want to be wealthy.” —Tod Barnhart, author of The Five Rituals of Wealth and A Kick in the Assets

• Language: English
• Publisher: Open Road Integrated Media
• Release date: Nov 1, 2008
• ISBN: 9781600379840

Book preview

Every man is the architect of his own fortune

~ Sallust

CHAPTER ONE

Living the American Dream—Or Are We?

Recently I attended a four-day conference focused on financial success. It was an extraordinary event that included some of the foremost experts in their respective fields—from world economy, investing, and trading to saving and taxes. As one of the experts, I was about to speak to nearly 800 people about getting out of debt and the psychology of financial success. Even though I had done this many times before, my heart was racing.

Just before I ran out on stage, I felt a sudden surge of overwhelming gratitude. It seemed like only a few short years had passed since the day when I was 26 years old and woke up, as I did on most mornings, totally stressed out about my credit card debt. On that particular day, I had to go to the bank, take out a cash advance on one of my credit cards, and deposit the money into my checking account to cover checks I had written to my creditors the day before. Talk about robbing Peter to pay Paul! Those checks were simply going to cover the minimum payments due to keep my debts from getting further behind.

Sick to my stomach, I entered the bank knowing that what I was about to do was completely against everything I believed about financial responsibility. How could I have created such a mess of my finances? What had gone wrong? Why had I allowed this to happen? I was frustrated and deeply humiliated by the desperate situation I had created for myself. I didn’t know what to do next or how to turn the situation around.

It was 1989 when I found myself in that horrible situation. In less than two years, I paid off my creditors entirely. I soon realized that I had the desire and knowledge to inspire others to do the same, and I’ve been doing just that ever since. As I heard myself being introduced at the conference, I bounded onstage. I was ready to rock the house!

Before we go any further, you should know that I am not an accountant, Certified Financial Planner, stockbroker, or professional money manager, nor am I a multibillionaire or mega business owner. I believe I am qualified to write and teach about financial solvency because I have been buried deep in debt and I got myself out. Since doing so, I have devoted my life to learning everything I could about debt elimination and I’ve shared my strategies and principles with thousands of people, helping them get out of debt, too.

What qualifies me to publish a book on this subject? This is an important question, because I strongly believe that you don’t want to learn from just anybody. Although I don’t know you personally, I suspect that you want to learn from people who have achieved positive results in their own lives and can teach you how to get the same or even better results. This strategy of learning from and improving upon other people’s experience is called modeling, and modeling other people’s success is the most productive and efficient way to re-create their success in your own life. Think about some of the greatest books ever written on personal and financial success. Books like the Bible, Think and Grow Rich, The Richest Man in Babylon, The Success System That Never Fails, Unlimited Power, and The Millionaire Next Door are all about modeling the successes of others. Through their stories and ideas, these books provide both examples of what to do and warnings of what not to do. In his runaway best seller Rich Dad, Poor Dad, Robert Kiyosaki showed us what to do (lessons from his rich dad) and what not to do (lessons from his poor dad).

Let’s face it. You don’t want to ask someone who is obese how to lose weight or how to get healthy, and you certainly don’t want to reinvent the wheel or learn by making your own painful mistakes if you can avoid them. Wouldn’t you rather benefit from the experience of others, whether pleasurable or painful, positive or negative? Wouldn’t you rather learn from a teacher or mentor who has not only accomplished something but who also knows how to teach it in a way that makes sense and motivates you to immediately use and apply the tools? A good teacher can move you to take action for your own reasons rather than anyone else’s, including his or her own. I believe I fit this mold as a positive financial role model.

Years ago, I became obsessed with figuring out not only the strategies for getting out of debt but also for addressing the psychological aspects. It’s not enough to get out of debt; you also have to stay out of debt so you can build the life you want and create independence for yourself and your family. This requires a shift in the way you think about and manage your money and finances. What good does it do to lose weight if you don’t keep it off? Debt is the unwanted fat in your personal finances. It weighs you down; inhibits you from achieving your goals; and can eventually kill you physically, emotionally, spiritually, and financially. The time to shed the excess weight of debt is now.

I may not know you personally, but if you owe a lot of money to credit card companies or other creditors right now, I know what you’re dealing with. I know how it feels when you’re barely making ends meet and it seems as if you just get further and further behind. I know how you feel when creditors are calling your home so you don’t want to answer the phone anymore. I also know how it feels when you’re doing well financially in terms of income but you have so much debt that you never get to enjoy what you’re earning. I’ve been there myself.

I’ve also been on the other side of the credit business. Early in my career, I spent years working for a major lending company that dealt exclusively in consumer loans. I saw firsthand what it was like for people to play this game without knowing the rules of financial success and what that could do to their spirit. I stood in court and saw the look in people’s eyes as they lost their property and could do nothing about it because they lacked the resources to turn things around.

I left the consumer finance industry out of total disgust for what was being sold: money at a high cost to people who couldn’t afford to borrow any more. I remember the pained look in people’s eyes as they helplessly watched me take their property and could do nothing about it. They thought they were living the American dream, when in fact they had borrowed against it at an exorbitant interest rate. My goal and desire for you is to give you the resources and strategies to master this part of your personal finances once and for all.

WHERE ARE YOU HEADING?

In my opinion, financial independence is one of the most important goals we can achieve. It is our birthright to pursue happiness, personal financial independence, and economic security for our families and ourselves. We deserve it. Many of us, however, have developed all kinds of obstacles that get in the way of achieving true financial success. These obstacles come in many forms: beliefs; religious ideas; fears and feelings of inadequacy and low self-esteem; impulsive and compulsive spending and other negative financial patterns, habits, and behaviors; confused values and rules; a lack of clarity about our personal financial vision; and conflicting goals.

There’s a difference between seeking to amass a lot of money and material possessions and building lasting wealth and financial prosperity. People can get confused about what they are ultimately after by focusing on the size of their bank accounts and the amount of stuff they have. Think about it. Did any of us grow up saying to ourselves, When I get older, I want to owe a lot of money to multiple lending institutions so I can work my butt off trying to keep up, just to fund their revenues and profits? I don’t think so. However, this is what’s happening. Lending institutions get bigger and bigger while most consumers get further and further behind.

As I write this in 2008, outstanding debt in America has skyrocketed to its highest level in our nation’s history and, like obesity, borrowing for consumerism has become epidemic. As consumers we owe nearly $2.5 trillion (not including mortgage debt) and as individuals we owe more than $9,659 on our credit cards at an average interest rate of 14.67%, according to current Federal Reserve Board statistics. The average household has more than 10 credit cards, and 500 million new cards are issued every year in North America, according to Cardweb.com, a leading online publisher of payment information. At nearly 14%, our debt service burden (the ratio of our debt payments to our disposable income) is close to the all-time high.

We’re also not saving. In 2005 and 2006, our personal savings rate dipped into the negative and was on track for a third straight negative year, according to the U.S. Commerce Department. In 2006 the rate was minus 1%, the lowest since 1933, which was considered the bottom of the Great Depression.

According to statistics compiled by the Administrative Office of the U.S. Courts and Cardweb.com, bankruptcies have skyrocketed again, even after new laws in October 2005 made filing more difficult. In 2005, a record 2 million people filed for bankruptcy. In 2006, the first full year under the new laws, filings dropped significantly to 617,660. However, comparing the first three quarters of 2006 to the first three quarters of 2007, filings increased more than 40% and filings in the third quarter of 2007 were 84% higher than they were in the first quarter under the new laws (218,909 in Q3-2007 compared to 116,771 in Q1-2006). There is a direct correlation between overspending (which ultimately leads to borrowing) and filing for bankruptcy protection. Later I will show you how every dollar you pay in interest adds up to double that amount subtracted from your dreams and goals.

As a nation we are spending more than we earn and saving nothing. That is the exact opposite of the number one key for financial success, which is to spend less than you earn and invest the difference. Unless you take the right steps today, you may have little chance of retiring or achieving any type of quality lifestyle without continuing to work for it. And since we’re living much longer than earlier generations, our extra years will have to be paid for somehow. Wouldn’t you rather have the decision to keep working be a choice instead of a necessity for keeping your head above water?

WHAT IS THE 5-MINUTE DEBT SOLUTION?

The 5-Minute Debt Solution is a simple five-step process for creating a compelling plan to get out of debt once and for all. The key word here is compelling. In studying and teaching this material since the early 1990s, I have found that if people don’t have a compelling plan, they will not follow through—period! My commitment to you is to compel you to create the plan and then have you follow through on it until you are debt free. I will also show you how to stay debt free and start on the path to financial independence. What to do is simple; how to do it is simple, too. The difference with this system is why to do it.

In the title of this book I’ve promised a five-minute solution and I want to explain what that means. First, let me tell you what it doesn’t mean. This book is not about getting rich quick, since I believe that game plan rarely works. Furthermore, if you think you’ll be out of debt within the first five minutes of picking up this book or five minutes after reading it, you’re seeking a result I cannot deliver. I’m not a magician; like you, I live in the real world. It may take you a little time to digest the material and implement