Williamson - Escape From Debt: Make a Plan, Take Action, Get Happy and Love Your Life

About the author

Tim has flown as a commercial pilot in three countries. He is an experienced business owner, fitness coach, martial arts instructor and masseur with a passion for health, fitness and teaching.

A car accident in 2002 saw him grounded from flying and unable to continue fitness coaching, so he has since studied many different areas of business and personal development. He is a former bank employee and debt collector.

Acknowledgements

I would like to thank my partner, Nicole, for her wonderful support. I would also like to express my gratitude to the great team at John Wiley & Sons, Australia, and to you, the reader.

Introduction

Whether you have a lot of debt or just a little, Im going to show you what it means to your cash flow and, ultimately, to your life, to have unnecessary drains on your finances. Im going to give you the tools you need to free yourself. By understanding how the world of finance works, the marketing and human behaviour, not only will you be able to escape from debt and start living the life you want, but you will be able to help others do the same.

As much as we might like to, there is no way that we can make debt disappear. The only way out is to create a payment plan and follow it with discipline and dedication. What you need to know is that this journey will be enlightening and enjoyable. Unlike a lot of finance books this one is written with a view towards human nature and breaking destructive patterns of behaviour, rather than facts and figures.

The process of lending money is nothing new and the expectation of being reimbursed for taking that risk is inherent. Credit is a tool of leverage. It can help you to buy your own home or have something now that would normally take years to save up for. There is nothing wrong with using credit, but there is everything wrong with going so far that you cant afford to make the repayments or you have to spend all your time working in order to service the account. Debt can make you a slave to a system that loves to profit from your efforts.

Talking about finances is something that does not come easily to a lot of people, and by the time people come to me for guidance they are defeated. In terms of motivation and regaining a foothold, this can mean that there is going to be some work required when it comes to your personal beliefs and your skills in resetting your focus and goals.

You have displayed the courage needed to take the initial step to escape from debt by reading this book, so well done. I will work with you to re-create your personal direction and rebuild your financial power. Im going to show you where to start, how to create your plan of action and, most importantly, how to take action.

Recently there has been an increase in the number of people in financial strife. While it was predicted to happen by many finance writers and forecasters, no-one in the world was really prepared for the events of 2008. The impact of the global financial crisis (GFC), as it became known, took the world by surprise. The collapse of one financial giant after another saw systems weaken and people lose fortunes.

The GFC illustrated perfectly what the excessive and/or incorrect use of debt can do and the ramifications of leveraging ones finances heavily. The rise and rise of economies saw more companies and people investing in property and shares that were on a meteoric rise. But, as Sir Isaac Newton observed, what goes up must come down and come down it did.

When the financial giants realised what was happening in the markets they called in their loans to their customers, who tended to be asset rich and heavily leveraged by debt. Companies and individuals sold their portfolios to liquidate their assets, but values fell too quickly. The assets were soon worth only half of what people had paid for them just a week earlier. The markets were in freefall and anyone who had been dependent on credit found themselves staring down the barrel of the GFC gun.

As companies began collapsing peoples jobs disappeared and with it went their ability to maintain their lifestyles. As a result, stories of people losing their retirement funds or their houses, and relationships failing due to the stress from financial problems have become increasingly common.

Australians and New Zealanders are now spending an average 114 per cent of their income. With interest rates at their lowest levels in decades the temptation is there to increase debt levels to purchase houses and cars, but what will happen when interest rates increase?

In an exciting age of continuous change and development it is unfortunate that many people cant enjoy it due to their financial commitments. Much of the population is no longer working for themselves or their families, instead they are working to support interest payments. Using excess debt to fund your lifestyle is like sitting in a bath without a plug. You can turn the tap on and water comes out, but it goes straight down the drain. You cant lie back and relax because you are too busy worrying about the water flowing out. The amount you pay in interest and fees when you borrow money takes away from your hard-earned income, which means you have less to use. Your cash is going down the drain instead of you being able to enjoy it.