American Debt Project

I am the biggest advocate of DIY when it comes to money. I know you will be most successful with getting out of debt and building wealth when you:

1) Do your own research
2) Build your own strategies
3) Basically do most of the heavy lifting.

But there are still some pretty good (and some awful) writers and experts on the topic of getting out of debt, investing, and everything else under the umbrella of Financial Freedom, Personal Finance and Get Rich Slowly but Surely. The following list covers some prominent authors/speakers and blog authors, their main stratagem, and any other worthwhile information to consider about each one.

The GURU Category

1. Suze Orman: The most famous and the biggest hack. Her resume of working in finance is not impressive. She has written a lot of books, all of them best-sellers, but her advice is mostly simplistic, emotional or wrong, as this article will tell you. She also has a co-branded “tool kit” with FICO (how many million did you get for that, SUZE?), which explains why she pushes the credit score as the most important part of your financial record. If you have cash to pay for all of your expenses, why is your FICO score so important? It’s not. You should be focused on paying off debt and creating a savings fund to account for emergencies.

FINAL CALL: TOSS

2. Dave Ramsey: He has a Southern accent and he works really hard at convincing you he’s no-nonsense. He just doesn’t have the time (Southern: taaahm) for your nonsense, darn it! His best book is The Total Money Makeover, although you can get the same ideas from his website and radio show (I just saved you $15). He advocates never using credit, creating a budget every month and his motto is “Cash is king and the paid-off mortgage has replaced the BMW as the new status symbol”. I’ve been following the Dave Ramsey/Debt Snowball plan for 10 months, so I’ll go into detail on how that’s been going in my next post. Dave Ramsey is a great place to start for anyone who is in debt, but I don’t plan on following his “mutual funds and money markets” investing plan once I am out of debt. Dave Ramsey is Christian and his advice is tied to his religion, but if you are not religious, don’t get worked up about it. It’s practical advice for anyone who is breaking old habits of never budgeting and spending more than you earn. Check his website to download monthly budgeting forms.

FINAL CALL: READ

3. Robert Kiyosaki: The author of the Rich Dad, Poor Dad books has a bad rap. Deservedly so, but I still think there are a few ideas you can take from him, even if his more specific ideas are not very helpful. The most important idea of his is building and generating passive income, whether as an investor or business owner. He advocates that these two roles are better ways of making money than being an employee or even self-employed (where you might still be working full-time). When you work full-time for a business that is not your own, someone else is getting rich off your back. Do you want to help someone else get rich for the rest of your life? So even though you don’t need to read his books, that is a key idea to keep in mind as you take control of your finances. He also doesn’t advocate mutual funds ad nauseum like most of these gurus, and this article by Kiyosaki has some great common sense advice.

FINAL CALL: TOSS

4. Kevin Trudeau: This guy is hilarious. Seriously, where did “they” find him?  Trudeau is mostly known for his weight loss and natural cures titles (and time spent in federal prison in the ‘90s), but he also has a (once best-selling) book, Debt Cures “They” Don’t Want You To Know About, which is light on content and heavy on repetition. A main tenet of advice in his book is not paying your debt until the statute of limitations on your debt runs out (between 3 and 5 years in most states), thus freeing you of your obligation to pay. Not only is this not guaranteed to work, but 3 to 5 years is a long time to sit around and wait for a statute of limitations to expire, while bill collectors harass you and your family. And call me old-fashioned but I believe that walking away from your obligations will come back to haunt you in some form or another. What if you become a reality TV star and your crazy ex exposes you for the $50,000 in credit card bills you never paid? Keep your dignity. I know you can get out of debt without believing the lies of this infomercial lifer.

FINAL CALL: LAUGH AT, THEN TOSS

5. David Bach: His most famous book is Smart Women Finish Rich and the Finish Rich series (Smart Couples Finish Rich and Start Late, Finish Rich to name a couple). He is a clear, straightforward writer, and although there is a sales pitch involved with all of these gurus, his doesn’t feel as sleazy and deceitful as the Suze Orman variety. I would recommend taking a look at any one of his books, but you definitely don’t need all of them. Smart Couples Finish Rich is a good starter book for couples to begin talking about their finances. Even if you’ve never talked money with your significant other, this book will help you start doing that without it being totally uncomfortable.

FINAL CALL: READ

Having reviewed just a few of these personal finance experts, I want to look at some favorites of mine in the blog category. The personal finance/debt blogs offer a ton of targeted, specific advice and are extremely useful. I think they have to provide more value since a reader may only linger on their site for a few seconds before deciding to stay and look around or leave. Check some of these sites (which I will also add to my blogroll) until American Debt Project really gets busy…

 

The Blog Category

1. Frugal Dad: A boatload of information. This website is what inspired me to start my blog. As Frugal Dad says, everyone should have a side hustle. This website is updated frequently, but he also an excellent archive of articles. Check out the Get out of Debt post and 7 Side Hustles for quick inspiration.

2. Get Rich Slowly : A top personal finance blog. So much information on here and a lot of personal background on the author and his wife, like this recent Redbook interview, that is very interesting.

3. 20smoney: Focused on markets, investing and generating income as a self-employed person, especially generating online income. A lot of useful information regarding how he has built his site into a sizeable monthly income.  He doesn’t focus at all on personal finance but I still learned a lot from the PF Manifesto.

4. Google: Oh yeah. Whenever I get bored with the usual sites, I just start searching for key terms on debt, investing and business (and desperately try NOT to get distracted and search for “Mob Wives”). New blogs are being made every day and they deserve a chance too. Great writing happens everywhere: craigslist, hubpages, whatever. Keep branching out.

 

We have to talk about money. It used to be impolite to talk about money, but we also used to call Alan Greenspan* a genius. Times change. I don’t want to be rude, or improper, or make anyone uncomfortable but not talking about money is what got me here in the first place. Not talking, not planning and spending away is the surest path to financial ruin.

If you are in debt, don’t have a considerable amount of savings, and/or are in a low-paying job, you have to talk about money. It makes me uncomfortable to talk about money. I’m pretty embarrassed to admit that I have a such a high amount of consumer debt when I have the means and ability to be debt-free. But that’s what the American Debt Project is all about: I’m taking responsibility for my past actions, but I’m also talking about what I did and analyzing the world around me so I’m not doomed to create a cycle of debt for the rest of my life. The only way we can get out of our financial black holes is by doing our research, finding new ways to make income, reconsidering our spending habits and about 8 million other things having to do with money.

I know why I love trashy reality shows. Besides the fact that the stars are clueless nimwits who confuse delicacy and delicatessen, it’s also the underlying idea that money is no object for these people. Like the characters in an F. Scott Fitzgerald story for whom money is everything yet absolutely nothing at all, I watch people on-screen and wonder, what is that like? What is it like to never have to think about money? (Obviously, we now know that most reality stars’ finances are in shambles and the gaudy homes and tasteless wardrobes are simply a facade, but the message remains.) If I didn’t have to think about money, it seems like there would be a big gap to fill. If I don’t have to worry about bills, what is there to worry about?

I know that this line of thinking is silly. Lots of people are newly debt-free and discovering they still have plenty to think about. There are emergency funds, college funds, savings and investments to consider. Paying off debt is just the first step in a long, interesting road of personal finance. But now you can worry less and plan more for a more secure financial future. There are no guarantees in life, but it’s nice to know you’ll be able to pay for shelter, food and transportation, even if you lose your job or your business unexpectedly.

So we have to talk about money. It makes us uncomfortable, and finding out about other people’s finances feels voyeuristic (she has how much?!). But money needs to lose its taboo status and become just another tool for human development.  I read something by a young woman saying she didn’t share her “very private finances” with her boyfriend. Why not? You’re in your mid-20s and clearly not a millionaire, so what do you have to hide? If you know you have much more or less than he does, will it be weird if he finds out you were hiding it from him? I’d rather keep my relationships private and my finances out in the open. Money is one of the biggest factors predicting divorce rates. Couples who fight about money are the unhappiest couples and you don’t want to be one of them right? And if you’re single, well, it’s even worse to argue with yourself about money.

*On a side note, I saw Alan Greenspan in Laguna Beach last year, and he was surprisingly small in person. Andrea Mitchell was much more imposing.

As I mentioned in my first official post, I am a person of ideas.  Too many ideas compete in my head for attention and while I want to write about A LOT of things (nutrition, traveling, human rights and TV series to name a few), this blog will have to be somewhat focused to be successful.

The main intent of The American Debt Project is to make everyone more aware of financial matters: each reader’s own personal finances being the most important, but also being able to understand how money is handled at the businesses they invest in, the school district their children attend, the city, state, and federal governments that purportedly serve them and every other institution in our lives.  My main topics on the personal level will be debt elimination, people who are or are not on the path to debt elimination (I love profiling people and their stories), finding investing opportunities at every income level and finding your way to financial freedom.

On a broader level, I will examine topics like understanding the impact of poverty and a growing low-income class in America, markets and investing and how much BS you have to wade through in those areas to get to the real story, and best of all, corruption.  While most political mainstream news in America isn’t worth reposting here, there is nothing like a good dose of corruption in my daily news.  Corruption is a hallmark of our weaknesses and points out our greed, laziness, and stupidity.  Man can be great.  In fact, he can be so impressive that we have to clarify that a thing was created by man, as in “manmade river” or “manmade island”.  But we also fall to great depths and that is what has always fascinated me—those aberrations of human behavior.  Fringe groups, brash behavior in individuals, governments and businesses, and anything else we can see as irrational from the comfort of our armchairs: these are all fair topics for this blog since it falls under the greater umbrella of what motivates us and what those motivations can drive us to do.

I’ll try to stay on topic and serve up only the best in finance, debt reduction, and investing, and I’m open to any topics my brand-new readers want to hear more about.  I’ll also dig into great articles that highlight how bizarre and appalling we can be when we have power.

I can’t wait to get this thing going, I feel like I’m sitting in a sports car at a stop light right now :O)!

The Beginning

This blog is being created out of necessity.  My very way of life is being threatened.  And it’s being threatened by me.  My over-spending, poor money management habits and utter laziness have led me into a deep hole of debt but I am now committed to see myself, as well as anyone around me who is in debt, out of it.  It’s funny.  I thought that not worrying about money was the way to happiness, but that doesn’t work when you make a below-average salary and spend like you’re Patrick Bateman in 1988.  I am FINALLY letting go of the notion that I am eventually going to make a lot of money, so there’s no need to pay off this debt now when I can pay it off in one fell swoop when I hit my big payday.  I stopped dreaming and had a better realization.  I realized that I am capable of making a lot of money (It’s different for everyone.  “A lot of money” to me is anything above $120,000 annually per person), but I have to dedicate myself to finding the way to make that money in my actions every single day.  This doesn’t involve planning my dream closet, browsing the Neiman Marcus website or checking airline ticket prices to Singapore on a daily basis.  It doesn’t include looking at everyone and their mom’s Facebook pictures, checking Heidi Montag’s Twitter page or even reading Yelp reviews of good restaurants in the neighborhood*.  It does involve making The American Debt Project into a fountain of knowledge, ideas and great discussion about the role money plays in everyone’s lives.  Improving this blog is just one action that I can take daily to get on the path to a healthy income.

Me and My “Crazy” Ideas

I am a person of ideas.  While I work full-time in a project management role (thus American Debt Project, get it?), my brain wanders off daily to consider possibilities, businesses, ideas and stories.  This might have to do with my entrepreneur mindset that I developed while receiving my certification in project management. Everything fascinates me.  Frankly, I think this is my downfall.  My co-worker and good friend told me her favorite part of the day is when I announce from my desk, “I have an idea!” and she gets ready to listen to another one of my schemes/plans/dreams.  I’ve started so many projects that I’ve lost count.  Some I have finished, most I have not.  I have a lot of passion for my ideas, but most of them require funding and I have to pay off my debt to be able to be put my ideas into action, and it is an important part of my life that has been held back by debt.  You might be thinking “it’s probably a good thing she doesn’t have any capital to put into her harebrained schemes.” and you might be correct, but it’s still my motivation for getting out of debt.

Necessity is the mother of invention, and I plan to invent my way out of thirty-eight thousand dollars in debt.  But it’s not really about me (only).  It’s about showing everyone that there is a better, more sustainable path for us as people, and we don’t have to be consumers who are hog-tied and screwed at every turn.  It’s patriotic to know how to handle your money, live within your means, and know where every dollar goes.  It is only appropriate that my first official post for the American Debt Project is on my birthday, a day to celebrate with friends and family and be grateful for all that you have (or is that Thanksgiving?  I pretty much do the same spiel on any holiday or occasion).  I know that I am lucky for everything I have when it comes to family, friends, love, my health, a steady income, and most of all my excitement.  I am so excited to share my ideas, the articles I come across, and anything relevant to being financially sound on this blog.  Let’s make the journey together to being debt-free and being able to provide for loved ones, organizations and the ideas we want to launch into reality.

The American Debt Project is Born

I have been planning the American Debt Project for some time, and I have been on the path to debt reduction since August 2010 (when I was at $46,000 in debt), so there has already been progress.  I am committed to sticking with this blog until I carry zero debt and hopefully well beyond that.  But I have at least made that commitment.  I turned 28 today, I have a boyfriend I live with, and we have no kids.  There is no time like the present to turn our financial future around!

*I probably do all of those things at least once a week.  Sad, I know.  I mention my internet distractions here because it is where I waste the most time and yet it is a resource with so much potential and I could be generating income from my addiction to the internet.