It was around 2008 when my career started taking off. At this point in time I was facing a combined debt of approximately 80,000 USD with no assets.
How did I get into so much debt? Well, primarily due to the following: investing in my company, buying computers and gadgets to support my work, owning a comfortable car for my two hour work commute (one way), owning a comfortable yet modest studio in a nice area, eating out etc. Clearly it was time for a change…
My first step, was to consolidate my debt and declare bankruptcy, which I did. It was probably one of the wisest moves at the time, in combination with living a more lean lifestyle. This reduced my interest rate payments and allowed me to manage my expenses more effectively by having a fixed monthly debt payment that was manageable.
In parallel, my lifestyle changes were as follows:
- Stop eating out
- Live closer to work
- Own a more affordable studio
- Take public transport instead of owning a car
- Make my computers and gadgets last longer
- Downgrade my company to a sole proprietorship
- Rely on paying for things in cash to control my budget
- Sacrifice going out with friends for social gatherings
- Invest in continued education/certification to improve my career growth
- Start searching for jobs globally that paid more
- Take on side hustles to increase my income
- Lastly, and most importantly, invest in the stock market (buy and hold)
It took me a total of 15 years to get to where I am today. It was a long and hard journey, and it has yet to end because I am in progress of saving enough money to retire comfortably. I do not enjoy spending money on designer brands, clothes, cars, fancy things etc. – I continue to embrace my lifestyle changes (listed above) to be happy.
Besides all of the above steps I took, here is a list of some other things I did, or considered doing, to get where I am today:
Create a Budget
Track your income and expenses to understand where your money is going. This will help you identify areas where you can cut back.
Prioritize Debt Repayment
Focus on paying off high-interest debts first (the avalanche method) or start with the smallest debts for quick wins (the snowball method). Choose the method that motivates you the most.
Increase Your Income
Look for ways to boost your income, such as taking on a part-time job, freelancing, or selling unused items.
Cut Unnecessary Expenses
Review your spending habits and eliminate non-essential expenses. This could include dining out, subscriptions, or impulse purchases.
Build an Emergency Fund
Aim to save at least three to six months’ worth of living expenses. This will help you avoid going into debt for unexpected expenses.
Automate Savings and Payments
Set up automatic transfers to your savings account and automate bill payments to avoid late fees and ensure you’re consistently saving.
Negotiate Lower Interest Rates
Contact your creditors to negotiate lower interest rates on your debts. This can reduce the total amount you pay over time.
Consider Debt Consolidation
If you have multiple debts, consolidating them into a single loan with a lower interest rate can simplify payments and reduce interest costs.
Educate Yourself
Learn about personal finance through books, podcasts, or online courses. The more you know, the better decisions you can make.
Stay Committed and Patient
Getting out of debt and building wealth takes time and discipline. Stay focused on your goals and celebrate small victories along the way.
In conclusion, I must emphasize that the one thing that saved me was my career. Looking for career opportunities at a global level, instead of just the country I lived in, opened a vast amount of doors and grew my network which led me to where I am today. Strongly consider building your career for a steady income; fast money does not exist in my 25 years of work experience. It takes a dedicated, slow and steady hand to get what you want in life.