Debt Control

From The Hoss's Mouth

Debt control is a winning ticket. This edition of Hoss Cents Free Financial Money Magazine provides the most important financial information you will ever learn.

A famous Canadian newspaper mogul who had accumulated a vast wealth was once asked the secret of his success. His reply was that he only bought items that he could pay for with the cash he had available at the time. In other words, he did not take out loans to purchase items.

Hoss Cents Free Financial Money Magazine Success Tip

The Hoss says get out of debt and stay out. The only debt you should acquire is for an asset that will appreciate in value over time. i.e. a home.

Okay, now I am going to bore you with numbers, but believe me when I say, at the end of this you will fully realize the importance of getting out of and staying out of debt.

Example One:

You have credit card debt of $6000.00 with an interest rate of 16 percent. Assuming you do not purchase anything else on this credit card, you could pay it off in two years paying $293.78 a month, for a total pay out of just over $7050. You see where I am going with this? You just paid over $1050 to the credit card company for the pleasure of doing business with them. Do you think you could have found a better use for that $1050?

Example Two:

There is this beautiful new car you absolutely fell in love with. It costs $30,000.00. The salesman likes you so much that he is willing to give you $5,000.00 for your old heap for a trade-in. Not only that, the kindly dealership will lend you the balance at a measly 4% over four years.

Okay, now what is this car going to really cost you?

To completely pay for this car in four years you will have to come up with $564.47 per month, for a total pay out of $27,094.86. That's $2,094.86 in interest you paid to the dealership. You probably noticed The Hoss did not calculate the administration fees charged by the dealer, or the taxes on such a purchase, nor did he tell you your old heap was sold by the dealer for a lot more than the $5000.00 he gave you. Oh well, The Hoss ain't perfect.

But do you get my point?

You could have kept your old heap another four years, put $564.47 per month in the bank, and even if you don't put the money in an interest bearing savings account, after four years you would be able to pay cash for a new car AND have over $2000 for that new HDTV you've been eying at your favorite tech shop. Now that's what I call a winning daily double. As Mom would say, ain't life grand.

By now you can see the wisdom of that Canadian newspaper man and why he was so financially successful.

Stay on track,
The Hoss

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