Git Gelt Episode 5: Drowning in Debt? A Step-by-Step Guide to Financial Freedom

I got to tell you something every week I see you you look with a week younger you to know that my husband has no idea where he's going to pay the money back from but we have to be very careful because there's a lot of scammers in this industry you know whatever you put your mind to wherever you call success wherever it is that you want to accomplish if you put your mind to it and then not only put your mind to it you get emotionally involved you get emotionally involved how do you get emotionally involved either by contacting professionals with the a strategy how you're going to manage your debt either by start to pay off whatever you can by the way it's the same thing the same idea with finishing Shas I I know that this is how you do it you [Music] know good morning we're on good to see you how are you I'm doing very good how you doing I woke up this morning I got to tell you something every week I see you you look with a week younger I appreciate that I still have to find out the secret yeah and when I when I know what the secret is all that you know good so what are we gonna talk about today you know I'm open I you tell me and let's let's just I think we should address one of the questions that came in okay I think it's something I like you know when questions come in man I like to choose the questions that I have uh that I see I think most more the more people will appreciate listening to it and it can be relevant to many people so this is basically how I I choose my the questions to answer so um a question that came in that I think we should address a person has a lot of debt I think he wrote like $200,000 in debt and he's earning $150,000 of income and he tried many businesses before and he failed and and this is basically how he accumulated so much death and he loves the idea of reverse budgeting that we spoke about he loves all the ideas we speak about he loves but his challenge is if he starts now he has such a such a big hole to to to fill up underground that he has to build before he he can even make it happen so where where does he start and I understand that he's not in the he's not in a situation that he can save too much anyway so you know where does he start and it's so easy of question yeah until here's the question I think it's so easy for such a person to fall into a certain mindset no for me it's never going to happen whatever I do is not going to be good anyway so why don't I just give up so I think we should address that question yeah it's it's a it's I I I I very much empathize with that situation I've been there myself and it's it's it's a it's it's definitely in when you're in that moment when you're in that when you're experiencing that it's very difficult to see a way out but you know as you have said and I personally have experienced there's always a way out let's hear what your thoughts are on how do we identify that way out what what what do you have to say about that right but first of all I don't know if the person asking the question is an entrepreneur or an employee um I know you are you know you're you're an entrepreneur so sometimes it could be easier for an entrepreneur to have the mindset yeah I'm going to go out one day I'll find a new idea I'll find a new adventure I'll find something to make a deal if you're an entrepreneur and you always do deals you always make things happen it's it's that something should happen in your life that will give you a windfall like a big sum of money and it should give you a push ahead but somebody is an employee working from for VES and you know even if he's going to get a bonus like khek you know what is it it's not going to help him too much he needs he needs like a big uh push something big to happen in order for it for it to work as long as he's going to stay as an as an employee so I think you know I don't know the situation of the person asking the question but I think we should address it in a way that even employees should have a certain way of thinking or a certain uh idea that maybe will help them down the roads okay um Okay so I want to talk about Credit First the thing is I have no idea the person didn't give me the details what kind of debt he has he only sure that he has $200,000 in debt I don't know if it's with creditors or with it it's personal friends or family uh credit cards uh banks financial institutions I don't know what which which what type of debt he was referring to but I think I'm talking specifically about credit so many people are afraid to have late payments on the credit or have any negative items on the credit reports because and rightfully so they they were they were trained and they were thought or they were you know what whatever reason they have this mindset that you have to be very careful with your credit and I'm all for it and I speak in my book about it and I I I I encourage people to to to be careful with their credit the thing that we have to understand is that we don't need the good credit because the good credit is an end goal it's only a to an end we need credit in order to accomplish certain other more important things like if you ever want to buy a piece of property if you ever want to borrow money I'm talking about healthy loans for your business to expand your business ETA Etc you need to build credit for these reasons sometimes you need it for in case of an emergency whatever the situation is but the credit is not something it's not like Aur by itself I need credit because it need to have good credit now I never suggest somebody to borrow money that they can't afford to to to repay but sometimes you have to understand if you got into a situation that you took credit for whatever reason you took credit and now you're in a situation that you have such a big hole that you that you that that you feel that you're you know stuck in and and you have let's say a few 00,000 in debt paying crazy amount of interest and no way that you should be able to get out of it you have to understand there's certain laws in the country protecting you the the starting from from making settlements with creditors or from filing bankruptcy you know some people when they hear the word filing bankruptcy oh no it's not me I don't want to F Banky I agree with you you should try to avoid it but I don't agree with you that you should try to avoid it at all cost there is a certain cost that it makes sense for somebody to take a deep look on his credit does it really make sense for me for me not for the Creditor you know stop you know Chase made enough money off you now you have to look on you if I'm not going to do something dramatic I'm not going to afford marrying off my children I'm not going to have any retirement I'm not going to be able to you know it's it my income instead of saving it goes to pay the credit cards and and and you know maybe it's going to take me another I don't know how many years to get out of this hole that a dick for myself so maybe you have to take a a closer look if it makes sense to maybe give up on your credit and it's going to come back you wait a few years you have credit back but for now maybe you should say I get toct let me make a new start reminds me of the story there was a guy that was that owed $50,000 for somebody you know let's call him Ruben so Ruben ow owed $50,000 for Shimon in the middle of the night his wife wakes up and he sees Ruben can't sleep he's turning from one side to the other you know doesn't know what to do she asked him Ruben what's going on with you why can't you sleep and he said you know I tell you honestly I I have to pay back shim on tomato $50,000 I have no idea where to take the money from I don't have the money so the wife said what's the what's the phone number for shiman so he gave her the phone number and she starts dialing 2 o'clock in the morning he said what are you doing why why are you you waking him up he said don't worry so she calls and Shimon picks up the phone like half asleep yeah hello and he said she says yeah this is the wife of Ruben calling yeah why are you calling me in middle of the night he said because she said because I want I want you to know that my husband has no idea where he's going to pay the money back from and you should know that it's not coming tomorrow and then she puts down the phone and then she tells even now you can't go back to sleep now Shimon is not sleeping so yeah and there's a moral to that story we we we tend to feel guilty you know at the end of the day the community that we're we're talking to we're raised to to at the end of the day be honest people we we we we and we feel guilty when we can't fulfill our obligations but I think it makes it easier to understand when you're talking particularly about credit where credit isn't a one-sided street it's not like the bank did me a favor and gave me money and now I have to feel guilty if I can't manage to to fulfill the terms credits it's a it's a a it's a um it's a an arrangement or agreement between both parties the same way that you know I took a risk by borrowing the money assuming I'm going to pay it back the bank also took a risk by making the money available and and inducing us with all types of of um of of marketing and so on you know they're also taking a risk so it's to it's it's to feel guilty I think is perhaps something we have to get past and maybe that's what you're addressing but we have to recognize that this was an agreement between both of us and we both agreed we're going to do our best and the bank also understands and and therefore you have these mechanisms in place that allow a person if they simply can't afford it to use it and feeling guilty about it and therefore not taking advantage of these tools like you said can be do more damage than it can good at the end of the day it's an agreement that both parties made and the bank knew very well going into the deal that I may not be able to pay back the money I may have to claim bankruptcy I may have to find some way to to cut out the interest payments whatever it is but to feel guilty we have to get pasted because like you said that can be one of the main distractions that hold us back from moving forward um yeah let me tell let me tell you a few things on that trulum first of all I want to make a disclaimer that anything we're talking about is just like Tu babatan talking everybody should ask his own Rabbi what he's supposed to do and not to do speaking we're not going into that um but having said that guilty first of all just between you and me usually when I get a question from a person like the the the person asking me usually the bank already made a lot of money from him let's just get that of the let's just make that clear I don't know how much they made I don't know how many years this is going on but usually they made some nice money off this guy already but that's not the point the point is first of all guilty why why should you feel guilty you know organized this world in such a way that this is what happened to you and you know it's over you tried your best and you did you didn't get to it what why should you feel guilty you know if you feel guilty so many people don't even want to try because they're afraid they're going to feel guilty why feel guilty you know even even Hashem understands that that a person needs to have a forgiveness once a year to clean up everything and have a new start you know I don't a lot of times I and they have a tourist n Duram every week every Friday morning they have a tourist n Duram and you know in the beginning I saw that and I was you know I I started thinking can I trust these people I don't know you know any promise They're Gonna Make Me by Friday morning it's going to be gone I mean a best Cas scenario so so and then but but the truth of the matter is the reason we do a t before or what you know everybody does according to their custom it's because Hashem understands no you make mistakes you tried your best you made some promises but don't feel guilty don't feel bad you know control or delete let's start again okay but the point is why should I feel guilty and also the other thing is um whenever somebody asks me something I'm should I do this or not I usually answer by what's the alternative I never answer a question I almost never answer a question when you ask me a yes or no I I I usually want to know A or B and then we can have a very objective conversation A or B what makes more more sense yeah I Want A and B okay but in a situation that you can't have both what makes more sense A or B and the same exact thing as in this situation you bring me a situation of a person having $200,000 in credit card debt and you're asking me what's the best you know what's the best strategy to go with should I keep paying it or not so let's discuss the alternative paying the credit card that means maybe not having money to to to to support your family paying the credit card that maybe it means not not having money foras which is included is supporting the family it may mean that you you you badly want to open a business and you can't open it because you're in the red or you know a whole list of things so I have to understand what is the most important thing for me now and all the rest is secondary once you understand that you know exactly what you want to do and you know as long as it's it's in compliance with Al it's a compliance with with uh with a whole bunch of other things that could be factors in this conversation but why not go and do it because this is exactly the reason why you have the law and you know some countries don't have this this law so in America it's some if somebody gets into such a situation he's little is lucky that he can get out of it in some places they can't in Israel it's not so easy to get out of such a situation for example um so I think that's the right approach right so so if I understand correctly you're saying the first step is to identify what your priorities are what what what you what you what you need money for and you know and then begin to think about how to allocate your money so you can can pay off debt but also be able to move forward in life is is that what you're recommending that would be best if that's possible that would be best but then you go to a different situation because I what we discussed until now was assuming that it's with uh with uh Banks or creditors what is if it's you know your family maybe your brother you owe $200,000 for your brother he was planning to put a down payment for a new house with this $200,000 now you can it's a different situation now you're really in trouble and you have to have a very honest conversation with you know a open conversation with with the person you owe the money listen this and this is the situation and what I see most of the cases not all of them but most of the cases the worst thing that a person can do is ignore it because then it it's a whole you know it's a whole uh the whole balagan starts you know you you're not respons if you have an hon honest conversation with a person that you owe the money to and you tell them listen this is the situation I needed the money for this and this I had a this was the but now I didn't didn't work out I'm trying very hard to Hope very very soon to be able to to give to pay you back every penny in the meantime please allow me to throw in every month every week as much as possible and I can tell you I've seen people who have a lot of debt and they went out of the situation by every week or every month paying off some of it then a tax return comes it you pay off even more then you have a bonus you pay off even more and then somebody gave you a gift you pay off even more and other people who don't do this because they're waiting for me they're waiting for them to have $200,000 to be able to pay it off usually never pay it off and this is where the trouble starts but there's always a way out right I I I think what you said don't don't ignore the situation I think that's you know that's extremely important but I would even take it a step further more than not ignoring it take ownership over it you know take meaning you know more than not ignoring be proactive about how you're going to indeed address this problem and and and and and take ownership you know take the lead on it and be proactive about coming up with a solution now with that in mind I wanted to ask you let's go back to the scenario of it being credit card debt and as you recommended it's important to identify the priorities your financial priorities and then begin to think about putting a a strategy in place is there a tool or a methodology that you recommend using to in in order to to make that happen how how would you recommend somebody you know identify these these um Financial priorities and create a strategy how do you go about doing that so in order to create a strategy you need to speak to a professional I would never tell you to to just go and do it and and and and with no plan because the the the the the loss can be more than the gain but you know maybe speak to a lawyer maybe speak to other professionals but we have to be very careful because there's a lot of scammers in this industry a lot of scammers who will tell yeah come to me give me $20,000 and I will just you know if something if you don't have references and you don't know that you're speaking to somebody who is really capable and knows what they're doing and and they can really help you stay away from them but there are there are professionals who know what they do and sometimes it cost money but the C that you're going to pay them is going to be less probably than the $200,000 plus all the interest that you're going to end up paying over time but I'll tell you this if you put your mind to it one of the benefits of putting like going back to somebody who owes for a personal friend or family money if you put your mind to paying it off you know $1 at a at a time $20 $100,000 as much as you can usually what end up what ends up happening is your brain becomes wired and Focus like an antenna goes up that you need to attract another $20 another ,000 another $10,000 because you want to pay off this person and then all of a sudden somebody comes to you and tells you could you help me with you know I know you have expertise in this and this software and we need this for my business would you be able to come in in the evening hours or on Sundays and and and and help me put this together for my company and I'll give you an extra $5,000 you know is maybe without the the the the consistency and the awareness you would say no because I don't have the time but now maybe you're going to start thinking oh oh another $5,000 off from the debt wow that's a good idea let me do it and it's only because you put your your brain into action and and and and to pay off for the person that's why you're attracting ideas like that and opportunities like that so it is important for both reasons number one that the person should see that you're working with them and number too because you might end up paying it off faster this way in actuality it sounds to me like what you're saying is that the same way in order for us to be successful in business we need to create an environment that triggers us to be passionate about earning money you know get rid of the furniture whatever you have to do to to to engage that passion and drive you can engage the same passion and drive when it comes to paying off debt if you if you really take ownership over it and you really feel that you want to make this happen the same tools that you can trigger to make money you can trigger to pay back money as well is that right absolutely but I gotta tell you sh you scared me now I I I have to come to your house now because you're bringing it up so many times I'm almost sure that you got rid of your furniture now ask my wife I don't know what to think I I'm afraid to call your wife leave my walls are be you should better get new furniture ASAP or you're going to have another you know another another one of your problems than whom to blame but yeah you're right but having said that I I do think I just I think this point is really important for you to to state clearly that because I want to make sure I understand this but we can become just as passionate and driven about paying off debt that we can be about making money you know the same passion and drive can help us to get out of debt absolutely absolutely you know whatever you put your mind to wherever you call success wherever it is that you want to accomplish if you put your mind to it and then not only put your mind to it you get emotionally involved you get emotionally involved how do you get emotionally involved either by contacting professionals with a a strategy how you're going to manage your debt either by start to start to pay off whatever you can every every uh you by the way it's the same thing the same idea with finishing Sha I know that this is how you do it you know when you want to finish what do you do you start thinking about CH or you start thinking about the first i d person so it's the same thing you D and then you start taking AC action you start ma without maai you can't even get to the second W you need that W first and I I I would like to just add to that that there's an a built- an incentive you know we when we think about making money we get excited because we know at the end of the day we're the benefit of having that money is so worthwhile to push me to want to really become passionate and driven about earning a lot of money I would go so far as to say I I experienced this personally that if when we put a plan in place to pay off debt and we start doing it this we get such a gmach from paying off that debt that it's it gives us the adrenaline it gives us the drive to want to continue you know once you get started the same way you start seeing money coming in because you're doing well in business bus and you want to do more once you start paying off debt you get just as driven and adrenaline fueled because of the schach you feel from from being released from that debt is is really a a tremendous pleasurable a very pleasurable feeling and it just and you know you just have to do it and and it starts happening and I think that's what you're saying yeah and it's also it's also that you get many successes a a giant success is a combination of a lot of many successes I remember once driving to Montreal from New York to Montreal it takes like 5 six hours to drive and it I remember every time I saw a sign how many mil has left until Montreal it gave me a certain piece a certain enjoyment oh okay so we passed already that many miles you pass that many miles so you have certain many destinations many successes and if you and that gives you courage and that gives you reaffirmation that you are on the right P pacee you're on the right track you're doing the right thing just keep going push more push more and this by itself as you said it gives you the power and the to continue seeing that you succeed nothing frustrates a person more than working hard towards something and it doesn't succeed in anything but if you can create somehow some many successes that's a GameChanger that's what that's what's going to give you the to continue until the end that's fantastic we can all be that hero we can all be hopeful and and confident and resilient and optimistic we all have that um and you know and and I think you know that that that we we we we enjoy pleasure and I think if we we like you're saying if we just go forward get past the guilt get past the avoidance and just take ownership and start doing it will the pleasure itself will become self-motivating galic Mo anything you want to add before we finish no I I I I I I think I I have you've given me a lot to think about um I need to kind of think further about it so if I have more questions I think I'll bring them up to you next week uh but for the time being I think you know it's it's if you you've offered a lot of clarity and I and I I appreciate and I just like I said I I I assume the listeners also need a chances to kind of absorb it yeah and I just want to remind everybody if you want us to address your question send the put it in the comment section on YouTube or send an email or leave a message on the phone line whatever you listen to it and uh yeah that's going to be it for today and I have a wonderful week ahead fantastic thank you [Music] look down the wisdom for your wealth