I think today is a good day to give an update to what we’ve accomplished so far with our debt reduction.  I’ve mentioned earlier that we are very open with our debt and how much we’ve had.  While it’s quite embarrassing what we’ve racked up, we wanted to become an example to people out there that you can gain control over your debt with  some smarter decisions, hard work and dedication.  I will first hand say that NONE of our debt money has been paid off with any of the income we’ve made with our business.  That sits in a different account accumulating for our new vehicle that we plan on buying in cash.  We wanted to also be an example to people building this business that you can pay off debt without touching your income made with this business.  One last disclaimer before I continue, everyone’s debt situation is different and this is just an example of what we’ve done.  Nobody has ever told us what to do with our money as that’s one of the cardinal rules that we uphold; “Do not mess with anyone’s money”.

So what’s the update?  Well let me share:

• As of June 1st we sold our condo and have decided to rent for the next few years.  We used the money we made off our condo to pay off some of our debts. 
• $239,000 Mortgage – DEBT, gone.  You may think your house is an asset but it’s not, not until it’s making you more money then what your mortgage payment is (example; having renters). There is no such thing as “good debt”
• $30,000 Home Equity Line of Credit – DEBT, gone.
• $8,000 of $10,000 Line of Credit – DEBT, almost done.
• $27,000 previously blogged about consumer credit card debt gone.

Debt left to finish off:

• $2,000 of the previously mentioned Home Equity Line of Credit
• $10,000 Vehicle loan

Total Debt Paid Off Since November 2009 = $304,000

So there you go.  $304,000 paid off since we first set a plan of action in November.  What did we change that helped us do this?  We got around people who didn’t live a debt lifestyle and lives a cash flow lifestyle, we read Richest Man in Babylon, we got some coaching from people who had similar amount of debt and who paid it off, and we set a budget.  That’s all we did.  Can you do the same? Absolutely without question.  It may look different then what we’ve done but there are always better options out there and sometimes you just have to make some sacrifices. 

We want to set the example of how to live a cash flow lifestyle instead of a debt one and we are doing that right now.