From Debt to Financial Freedom

Written by Dinar P. Wiria-Atmadja


Continued from page 1

Let’s sayrepparttar smallest debt you have is your Visa withrepparttar 111780 minimum payment of $148. The 5% of your net income is $70. Forrepparttar 111781 next few months (or years) you will be paying off your Visa withrepparttar 111782 minimum payment PLUSrepparttar 111783 5% of your net income, which is $218.

While you are focusing on your Visa, you should pay offrepparttar 111784 rest of your debt according to each monthly minimum payment agreement. This should go on until your Visa is paid off completely.

As soon as your Visa is paid off, you focus onrepparttar 111785 smallest debt. Like before, add uprepparttar 111786 minimum payment with 5% of your net income. But this time addrepparttar 111787 sum withrepparttar 111788 minimum payment of your Visa that is already paid off.

If your next smallest debt isrepparttar 111789 MasterCard with minimum payment of $183, this should be added up withrepparttar 111790 5% of your net income ANDrepparttar 111791 Visa minimum payment. The total payment for your MasterCard would be $401. Now that your Visa is paid off you have more money to pay offrepparttar 111792 rest of your debt faster.

Your next debt should be paid withrepparttar 111793 money you used before to pay off your Visa and your MasterCard minimum payment. This process should be repeated on and on until all your debt is eliminated.

By doing this you will shortenrepparttar 111794 years of your debt elimination process.

Manage Your Time and Money Wisely

Time and money isrepparttar 111795 most precious resources everybody has to actually attain financial freedom. But yet, none of us are taught in schools to manage them wisely.

Now you are inrepparttar 111796 process of paying off your debt. If you manage your time wisely to make more money to save or help to pay off your debt, you will not only speed up your debt elimination but retirement process and your financial freedom.

Devote some of your spare time to reducing your expenses and increasing your income. The sooner you become debt freerepparttar 111797 sooner you can save more money and invest to start working on your early retirement process and attain financial freedom.

Everybody knowsrepparttar 111798 disadvantages of being in a debt. But not many of us are aware ofrepparttar 111799 advantages of being debt-free. By being debt-free you have more money to save and invest to prepare for your retirement. And this should be your next goal. Use your time wisely to create extra money and use your extra money wisely to prepare for your retirement and eventually your financial freedom.

Create Passive Income

Now you have paid off your debt, taken up a side job and saved money for investing.

Your next important step to financial freedom is creating passive income.

Passive income is income which requires little or no work at all. Although it is possible to attain freedom just by saving, it will take decades to actually accumulate wealth. Some people never even make it there. By creating passive income you will not just be able to speed up your debt elimination and retirement process but also your journey to attain financial freedom.

The most powerful way to create passive income is by having your own small business or home-based business. This type of business does not require a lot of capital.

Keep your business expenses low and try to put aside a percentage of your net income for saving and another percentage for investing in your own business. Note that forrepparttar 111800 next 1-2 years you will be experiencing negative cash flow from your new business. But keep in mind that if you persistently invest your spare time, effort and money in your business, you will have allrepparttar 111801 quality time you want to spend with your family and friends, allrepparttar 111802 money you dream of for you, your family and even your grandchildren and allrepparttar 111803 freedom to live your life abundantly.

To learn more about financial freedom and how to achieve it visit http://www.financialfreedomawaits.com.

Dinar P. Wiria-Atmadja is the owner of FinancialFreedomAwaits.com, helping families and individuals achieve financial freedom in years instead of decades. Visit the site here at http://www.financialfreedomawaits.com. You are free to publish this article to your site as long as the article is not changed and the resource box is included.


Distressed assets: profiting from mistakes of others

Written by Murray Priestley


Continued from page 1

An example is Barney’s Inc. It filed for Chapter 11 in early 1996. Many clothing designers chose to sell their trade claims and recoup a portion of their money. It was of no consequence whether Barney’s was a solid company that had simply overextended itself, they wanted something immediately. Investors who believedrepparttar company would emerge successfully from Chapter 11 protection boughtrepparttar 111779 claims for as little as 25 cents onrepparttar 111780 dollar. The price rose 50% within months, when it was announced a potential buyer had been found for Barney’s.

When creditors can’t wait or are unwilling to wait, steep discounts are common – and this isrepparttar 111781 distressed assets investor’s opportunity to make a good profit.

Some companies inrepparttar 111782 process of reorganizing their debt will issue new securities to junior creditors when they cannot repay them in full. If a fund manager believesrepparttar 111783 company will emerge from bankruptcy and be viable, he might buy these junior bonds for an opportunity to receive shares inrepparttar 111784 company under a reorganization plan.

These shares are sometimes referred to as ‘orphan’ equities whenrepparttar 111785 issuing company has no Wall Street coverage. Lack of coverage results from investment banks tending not to view companies emerging from bankruptcy as potential clients. Consequently,repparttar 111786 only people able to understandrepparttar 111787 value of these orphan issues are investment professionals who have takenrepparttar 111788 time to researchrepparttar 111789 company’s liquidation value duringrepparttar 111790 Chapter 11 process. They now profit from buyingrepparttar 111791 newly issued equities at low prices when other creditors, issuedrepparttar 111792 shares in exchange for their claims, dump them because they don’t understand their value.

This is what happened with El Paso Electric when it exited bankruptcy in early 1996. Its orphan equities were first issued at $5 a share. As creditors dumped them,repparttar 111793 price fell. Savvy professionals were able to add to their holdings when this happened. Two years later,repparttar 111794 shares were trading at more than $9.

Orphan equities can be highly profitable asrepparttar 111795 investment community, at first overlookingrepparttar 111796 stock, gains more understanding and confidence in its value. This ultimately leads to Wall Street coverage and higher prices.

As always, look for a manager with a solid track record.

Distressed asset investing can be a good way to increase diversification in an investment portfolio. Opportunities are more prevalent in a recession, but companies get into trouble in expansionary times, too. Distressed assets do not haverepparttar 111797 same volatility as many other types of investment. Excessive prices, if they existed, have already been wrung out of them.

Written & published by Murray Priestley, Managing Partner of Portofino Asset Management, private investment managers and publishers of the Portofino Report. www.portofinoasset.com


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