"I had a DEBT of $800,000 Dollars" How to Pay off your Debts | Robert Kiyosaki

Summary

In this inspiring video, the speaker shares a personal journey of overcoming financial struggles, revealing key lessons learned from being $800,000 in debt to achieving financial freedom. The video emphasizes honesty, strategic debt repayment, and shifting focus from liabilities to income-generating assets. The speaker highlights the importance of having an accountant, creating a clear debt repayment plan, and using good debt to build wealth. By dedicating themselves to a disciplined, asset-focused approach, they were able to transform their financial situation and achieve lasting success. The message encourages viewers to take control of their finances and follow the proven steps to financial independence.

Takeaways

• 😀 Be honest with yourself about your financial situation. Acknowledge the reality of your debts before you can move forward with a plan.
• 😀 Stop accumulating unpayable loans. Avoid taking on more debt that you can't afford to repay.
• 😀 List all your debts, including credit cards, loans, and personal debts. This will give you a clear understanding of what you owe.
• 😀 Hire an accountant to help manage your finances. Professional support is essential to maintain accurate records and avoid mistakes.
• 😀 Create a visual debt repayment plan. Break down your debts by creditor, total amount owed, and minimum monthly payments to track your progress.
• 😀 Start paying off the smallest debts first. Focus on eliminating smaller debts to build momentum and gain quick wins.
• 😀 Understand the difference between assets and liabilities. Focus on acquiring assets that generate income, not liabilities that drain money.
• 😀 Use good debt strategically to generate income. For example, real estate can provide cash flow if used wisely, rather than being a burden.
• 😀 Discipline and dedication are key to achieving financial freedom. Consistently following your debt repayment and investment plans is critical for long-term success.
• 😀 Invest in your future. Once you've paid off your debts, use the money saved to reinvest in assets like real estate or stocks to continue building wealth.
• 😀 Financial freedom is a process, not a quick fix. It requires long-term planning, hard work, and a shift in mindset to focus on wealth-building.

Q & A

What is the first step in getting out of debt according to the speaker?

The first step is to be honest with yourself. Acknowledge your financial situation and face the truth about your debts before you can move forward.

Why does the speaker emphasize being honest with yourself?

Being honest with yourself allows you to understand where you are financially, which is crucial for creating a realistic plan to get out of debt and achieve your goals.

What advice does the speaker give about credit cards?

The speaker believes credit cards are not the problem themselves. Instead, the issue is accumulating unpayable debt. He recommends not cutting up credit cards but instead focusing on paying down the debt.

What was the speaker’s financial situation when he and Kim got married?

The speaker and Kim started with significant debt—over $800,000. At that time, he was in between businesses and had lost his second venture, meaning they had no money and a lot of debt to pay off.

What is the significance of hiring an accountant, according to the speaker?

Hiring an accountant is crucial because it helps ensure accurate financial records and allows you to manage your finances better. The speaker notes that rich people have accountants, whereas poor people often don’t keep proper financial records.

Why does the speaker recommend starting with the smallest debt when paying off debt?

The speaker recommends starting with the smallest debt because paying it off quickly creates a sense of accomplishment and momentum, which encourages you to continue tackling larger debts.

What is the difference between an asset and a liability, as defined by the speaker?

An asset is something that puts money in your pocket, while a liability is something that takes money out of your pocket. For example, rental properties are assets because they generate income, whereas a house you live in is a liability because it incurs costs like taxes and maintenance.

What role does 'good debt' play in building wealth?

Good debt is used to acquire assets that generate cash flow, such as real estate or investments. This type of debt allows you to grow your wealth by leveraging borrowed money to create income.

What is the importance of visualizing your debts?

Visualizing your debts on a board or chart helps you track your progress and stay motivated. It also gives you a clear picture of how long it will take to pay off each debt, which can keep you focused and accountable.

How long did it take the speaker and Kim to achieve financial freedom?

It took the speaker and Kim 10 years to go from nothing to financial freedom. They focused on accumulating assets and building wealth, which eventually led them to financial independence.

What mindset shift does the speaker recommend for achieving financial success?

The speaker recommends shifting your mindset from working for money to focusing on acquiring assets that generate income. This involves making smart financial decisions and using debt strategically to build wealth, rather than spending on liabilities.