George's situation:
- Moved from Washington State to Florida two years ago.
- Left his business in Washington and bought a home in Georgia.
- The home needed unexpected repairs, leading to credit card debt.
- Recently, the business burned down completely.
Options for George:
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Restart the same auto wrecking business on a smaller scale.
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Has trade skills as a body shop technician and experience in parting out cars.
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Would require around $40,000 for tools and equipment.
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Had made around $150,000 profit per year in previous years.
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Can turn a profit within 90 days of starting the business again.
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Get a stable job and sell the land to buy a house.
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Land is worth about $100,000 and they have savings of over $120,000.
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Wife prefers this option for stability.
Dave's recommendation:
- Sell the land and use the funds to start the auto wrecking business in a rental property instead of owning real estate.
- With an initial investment of around $50,000 for tools and equipment, he can restart the business quickly.
- Take side gig hustles while setting up the new venture.
- Put insurance on the rented warehouse to protect against potential losses.
Debt-Free Journey:
- Paid off $377,708 in debt
- Took five and a half years to become debt-free
- Started with an income of around $160,000 and increased it to $220,000 by working multiple jobs
Types of Debt:
- $15,000 in car loans
- $20,000 in credit card debt
- $340,000 in student loans
Motivation for Becoming Debt-Free:
- Attended Financial Peace University in high school and had the knowledge going into marriage
- Realized they were not on the same page financially and decided to do FPU together
- Made a deal that if Scott did FPU with Rachel, they could buy a TV (which they did)
Challenges Faced:
- Scott was initially skeptical about the program but became fully committed after seeing their class's total debt compared to theirs
- Rachel made a career change which resulted in a decrease in income due to COVID but picked up additional jobs to increase their overall income
Advice for Others:
- Have open communication about finances with your spouse/partner
- Regularly have budget meetings to discuss finances and upcoming expenses
- Celebrate small wins along the way to stay motivated during the debt-free journey
Dave and his team of experts answer questions on the top problems holding people back in building wealth and taking control of their lives.:
- Celebrating milestones is important to see the light at the end of the tunnel.
- Gamifying goals can help in overcoming struggles and staying motivated.
- Paying off each loan one by one gives a sense of progress and motivation.
- Give yourself grace when facing setbacks or slower months in debt repayment. Keep moving forward.
- Scott and Rachel from Pasadena, California paid off $378,000 in five and a half years. They used Dave's Total Money Makeover book, Baby Steps Millionaires book, and Financial Peace University membership.
- Building credit may not be necessary for renting an apartment. Calling multiple apartment complexes can often result in finding a place without needing credit history.
- Mark wants to build credit as he plans to move out of his parents' house after graduating. Ken Coleman advises that it is not necessary as most renters do not require credit history.
- Mark is working full-time and part-time as an independent contractor doing group counseling sessions while studying to become an addictions counselor.
- Beverly, who is 74 years old, has $31,959.26 in credit card debt and $57,623 left on her mortgage. Dave suggests paying off both loans immediately using her annuity funds and stocks to become completely debt-free by the end of the week.