Would you like to know how life is with $655,602.51 debt because in this blog post I describe my way out of debt to debt-free and financial freedom?
Life with $655,602.51 Debt — Is This the Way Out? #3
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My name is Jerry Banfield. My wife and I, we collectively owe $655,602.51 as of December 2, 2019. What you are here for is a vlog, a journal entry of what we’re doing, what we’re thinking.
This may be really helpful for you if you’ve racked up some debt yourself and/or you just are interested in watching us take all of this debt and turn it into zero debt, and then have financial independence and financial freedom.
I’m very grateful for the chance to share this with you today. It’s been very difficult for me to open up about, and I see the only way out is to just share it, share the journey and to help you.
What I’ve done and this is clearly documented exactly how much the debt is, and I’ll go through what we’re doing and what we’re thinking each week in a short little video series that I think you’ll love and enjoy.
First, let’s look at exactly how much the debt is. Taking inventory and looking at exactly how much the payments are, the balances are, the interest, this to me is critical to get out of the debt, to be aware of exactly how it is and to make a plan to get all of this down to zero. I’m grateful that the biggest interest rate is 16.49%.
I’m very grateful to all the banks and companies, and even people who’ve loaned me money. These, to me, are interest rates I am very happy with, especially some 0% interest credit cards that will expire within the next year and some low-interest rate personal loans and student loans and business loans.
The biggest of these in terms of which one I want to pay off immediately, these two credit cards are naturally these I’m going for these first. The minimum payment is $8,703 and the total balance $655,000. Now there is a mortgage right here and the house is worth about $300,000.
Therefore, we do have that as a balance against this. I also have a business online that I’m very happy with. It’s doing pretty well on YouTube and on Facebook.
The main reason that the debt has gotten so high, is because this year, I launched an ambitious new project and I went crazy borrowing all this business money. I borrowed all of this in 2019, and many of the personal loans and credit cards were also borrowed in 2019 to fund the business.
What I’ve learned from this and the most critical thing is, what are we doing and what are we thinking in the middle of this?
I’m so grateful my wife has been incredibly loving and supportive, and she’s understood that my business has done very well in the past years and paid a lot of the bills, and this is the other side of it, and there’s a lot for all of us to learn out of this.
What I see is number one is staying positive. We will get out of this. This year, I’ve been in the middle of a lot of fear of financial insecurity. Ironically that fear kept driving me to push harder and not change and slow down a bit.
If I can point to one critical learning lesson from this debt, it is me moving too fast. My wife told me to slow down, that I was borrowing money too fast for the business at one point, and I finally internalized that and realized, “Wow, I am being so aggressive with my business plan. That’s how we got in this situation.”
Now the key is this point. Let me drag this up here because this is actually number two. How we got here is only relevant in terms of what we learn. We’ve done really well staying out of needless past upbringing. There’s no reason for us to just go through throwing around the past and saying, “Well, you did this.”
That’s irrelevant if we want to get out of this, except in terms of what we learn. We’re consistently thinking that we needed to learn from this and we have learned some valuable lessons.
For me, it’s finally to slow down. I’ve pushed so hard with my business online that I’ve got some really good results. I’ve made millions of dollars online and I’ve consistently spent that trying to build bigger and bigger.
This year, things got a bit out of hand, as you can see. Thus, the big lesson I’ve learned is to slow down and to be consistent. Also, another thing that we’re thinking that’s making a big difference is, how can we help others?
I see that getting out of this and helping others are very intimately related. These are things we’re thinking, which are then driving our actions.
Another thing we’re consistently thinking about is, awareness of the minimum payments, interests, and balance. As I was racking this debt up, in fact, I could not stop borrowing more money, as long as I didn’t look at this.
I’m showing this here because this is my accountability.
I borrowed all this money when a year ago I was paying all my credit card balances in full. The majority of these, except for the student loans, which are my wife’s student loans, and except for the mortgage, a year ago, nothing except the mortgage and the student loans, and these two personal/student loans were my student loans, nothing except that existed one year ago today.
I am seeing that all this ended up existing because I was going too fast, and then I didn’t keep looking at it. I didn’t put all the numbers together and see what I was doing. I just applied for one credit card at a time. I kept thinking short term. The secret to getting out of this that I see is a long-term thinking.
Let me add that down here, “long-term thinking.” How do we get out of debt and stay out of debt for the rest of our lives, instead of just constantly trying to pay the bills for this month or build a business that makes lots of money next month?
We are consistently imagining being debt free. I refuse to imagine things like bankruptcy. I believe it’s very important that I honor my agreements. I went and borrowed this money, and to me, it’s dishonorable to say, ‘Well, I’m just going to declare bankruptcy or whatever, and just forget everyone else and break my vows that when I borrow this money, I’ll pay it back.”
When I borrowed all this money, I had and still have the intention of paying it all back, because if I was on the other end of the loan, I want it paid back.
Another big adjustment in our thinking we made is that, remember every new purchase, we’re paying interest on our new purchase. We weren’t thinking of this before because even though we didn’t have any credit card debts — Again, almost all of this, except the mortgage, the student loans, and the two personal loans, a year ago, we didn’t have.
Now, five years ago, we did have a lot more debt and I made so much money online, I paid all of it off, except what you can see here. I actually paid my wife student loans down over $40,000 also and my loans down over $30,000.
The way we got into this is not considering, especially me, I’m putting 90% of this on myself, me not thinking when I’m buying something new that it is essentially paying 7% interest. Because as long as Laura’s got her student loans at 7% interest and I’m not putting something onto that loan balance, we’re essentially paying 7% interest on whatever that new thing is.
We now mentally factor that into the cost, “If we’re buying this for $1,000, then we’re paying 7% interest on that effectively every year, instead of paying off the debt, and then we wouldn’t be paying that interest.”
We are also expecting our income to increase in our thinking. I’m imagining making lots more money. I’m not just imagining it, but I’ve separated this into what I’m thinking and what I’m doing because I see these are two key areas.
Let’s jump over and look at what I’m doing.
What I’m thinking drives what I’m doing.
I’ve seen questions, “Jerry, how can you be so positive?”
I’m an immortal god that is incarnated in a flesh being. I’m having fun. This is ultimately a game and all of you are as well. I am the exact same flesh and blood and creation as you. There are just little differences.
This is fun. This is exciting. This is an adventure.
Life is an adventure and that’s how I’m able to be positive.
I see that this is an opportunity to serve and help others, and this meets the need for uncertainty. The rest of my life is very certain, very simple. I’m grateful for all this, this fun. The finance is the only area of my life where I have any issues.
This is exciting.
That’s how I’m choosing to think about this. I’ve let that fear go. There’s nothing to be afraid of. What’s going to happen?
You’re going to keep living in the same house. You might not like something. I’ve faced my fears. I’m able to stay positive because I’ve thought through all of the worst-case scenarios in my mind and they’re not that bad.
That drives me to what I’m thinking, drives us to what we are doing. Obviously, we’re making all the minimum payments.
In 13 years of having debt, I have not missed one payment.
Every single payment on my credit report has indicated for 13 years. My payments have been on time. I care a lot about making my minimum payments. Whenever I’ve made more money, I’ve paid down debt as much as I could. I’m also asking relentlessly for help. If you have any suggestions, I welcome your suggestions, your feedback, your conversation, your shares. I will accept whatever help you have to give me.
Now, that doesn’t mean I’m just going to do whatever I’m told. Several people have suggested we ought to sell our house. I am not interested in selling the house, and Laura’s not interested in selling the house either because what we see down here is this.
These next two points are critical.
The path I see out of this revolves on reducing spending and increasing income. I’m grateful I’ve had years I’ve made as much as $250,000 online profit, and I intend to have some more of those years soon because I am optimizing to deliver more value, more value than I’ve ever delivered before in a more consistent format.
I’ve been guided to do that by asking for help, specifically what I’m doing on my website JerryBanfield.com. I’m getting absolutely everything I have for sale and I’m pulling my value onto JerryBanfield.com.
For example, I’m getting videos like this transcribed into blog posts that people can read. I’m putting all my online courses for the first time ever on JerryBanfield.com. I’m centralizing everything I do.
Looking at this debt has helped me see, I need to make the best business system I’ve ever made before, and not only that, but one that I can teach and share with others.
The reason we don’t sell, or not interested in selling the house is because of this key point. We’re reducing all spending except when it limits income.
Especially with me having a business online, it’s not as simple as just saying, “We’re going to cut every single expense down to zero and just not spend money.”
There are things that I can cut that don’t cost me income. There are other things I cut that do cost me income.
For example, I’ve cut almost all of the expenses in my business. I’ve cut down, and I see that this debt got accumulated this year because I spent too much.
That was the number one thing. Not only that, but my spending actually reduced the amount of income I can make as well because it actually takes a lot of time and energy to spend that kind of money.
What I see is that cutting some expenses will have a detrimental effect to my income. For example, if I cut my web hosting expense, that will take down my income greatly. Therefore, that’s a critical expense. If I cut my internet, that will take down my income greatly. It’s a delicate balance to see which expense is impacting income and which one is not.
When I started doing grocery shopping, for years, I’ve not paid any attention to the price. I’ve simply bought whatever I felt like. That was awesome.
Now, picture that. I used to look at receipts, and for years, I just bought whatever I felt like in the grocery store. I didn’t care if it costs two or three or five times as much.
For example, the organic food, I just bought whatever I felt like.
What I’m doing in the store now, grocery shopping, is I’m looking at which food is the healthiest and cheapest food I can buy. I’ve been buying a lot of bananas and apples lately, instead of things like blueberries and raspberries.
Or buy one box of blueberries and three things of bananas, instead of buying a whole bunch of blueberries and raspberries that cost a whole lot more. Therefore, I’ve been cutting down on the grocery bill significantly by actually paying attention to what I’m buying.
I rationalized it before that I made so much money and the grocery store costs so little. I didn’t need to pay attention to how much I was spending in the grocery store. Considering 7% plus interest on everything, yes, I’m paying attention to what I’m buying. If I buy foods that drag my body down, now that reduces my ability to think clearly and make income.
Therefore, I still am buying organic fruits and vegetables whenever possible, even though those costs more, because the non-organic ones often don’t give me the optimal performance in my body. I’m getting one supplement for $77 a month.
I’m testing that out to see how it impacts my body.
So far so good.
I see that making the most income requires me to be in the peak shape as much as possible.
We’re also finding a public school for our children. We send our daughter to a private school which costs $17,000 in tuition, which if you look at that, that was not something I would have done, if I’d looked at all of this and put these numbers together.
Thankfully, the obvious thing to do is simply enroll her in a public school. We’ve got great public school options in St. Petersburg, Florida.
I am going to her private school this year to volunteer and enjoy it as much as I can before we move to a different school.
We all started doing a monthly inventory of balance, interests, and payments. This inventory to me is very important to see where I’m at and to guide my thinking and decision-making.
Now, this might look hopeless, but to me, it doesn’t. This looks like an exciting learning opportunity. That’s why I’m producing a vlog documenting our progress.
Because what I’m imagining is in a few years, maybe, or it could be six months, it could be 10 years, I don’t know, it’s not up to me to dictate to God, or the Universe or whoever’s, whatever the intelligence is, myself, to dictate exactly what the future should look like.
What it is up to me to do is take responsibility for where I’m at today and to help as many other people as possible. I’m imagining that when all this debt is paid off, imagine watching this series from start to finish, where this is my present financial reality.
You can maybe stack up about $300,000 or so of semi-liquid.
The house can’t be sold immediately and who could get a buyer for it, but there’s at least $300,000 in unsecured debt in here. A situation that doesn’t look very good, right off hand, especially when my wife and I both work from home, both have our own businesses and freelance online.
What I’m imagining is, you maybe finding these several years from now after somebody told you about it and saying, “Look, this guy and his family, he put out his finances in what looked like a hopeless situation, and one day at a time worked them down to being out of debt.”
Then, I love thinking about giving back and helping others like you. If you’ve got debt, I love donating. One reason I didn’t pay the loans down faster is because I’ve donated money to others like crazy. Tens of thousands of dollars, $50 here, $100 here, this GoFundMe, that GoFundMe, the school campaign.
I just donate money all over the place.
I’m imagining how amazing this will be to look back on, and this is helping me so much right now, to just get real as Dr. Phil says.
This is where I’m at today, as a family, as part of a family.
It’s cool. It’s cool. I’m actually having fun with this.
I’m so honored you’ve watched this whole video or read the blog post.
If you watched some of the ones that led up to this, I’m doing these in prerecorded format now to make them a bit shorter. The live stream has gotten a bit out of hand. If you want to make sure you get notified whenever there’s live streams, just hit that “Subscribe“ button on YouTube.
For the next videos, check the playlist that I’ll be putting this on. You can also follow on Facebook if you want to make sure to see the live videos.
I love you.
Thank you very much for giving me a chance to serve you today.
I appreciate whatever help you can offer with the debt and I’ll do whatever I can to help you with your financial situation.
My mind is like, “Oh, yes? What are you going to do now?”
I will teach you. I will teach you skills that you can use to make money online the way I do.
My mind is like, “Shut up!”
Nobody needs to hear that.
You may like to read: My $656K Debt Story — Being #1!
Edits from video transcript by Michel Gerard at www.michelgerardonline.com.