Sunken Ship

How to know that you are already in heavy debt? These are some indicators stated on the book by Azizi Ali, Millionaires are from a different planet!

1) Missing payments
2) Paying less than the agreed amount
3) Paying the minimum due
4) Busting your credit limit on the credit card
5) Having to borrow more money to settle old debt commitments
6) Not able to handle minor financial emergencies
7) Avoiding calls of creditors
8) Wondering how on earth are you going to get out of this mess

So, if you are having some or all of the symptoms as stated above, you are in big trouble. Having debt is like cruising the sea in a sunken ship. The more holes the ship have, the more deeper the ship will sank. Therefore, the first immediate step you should do is to try to find the biggest hole in the ship and plug it quickly. In the financial world, it means try to identify which debt carries the highest interest and eliminate it quickly.

The 80/20 Rule

"The first law of success is concentration - to bend all the energies to one point, and to go directly to that point, looking neither to the right nor to the left." - William Mathews

The power of effective action is by knowing what to focus on and making it happen fast. By applying the universal law known as Pareto rule, 80/20, we can be certain that in order to successfully complete a task efficiently is by focusing on the 20%, or the most critical part of the task. By tackling the 20%, the rest 80% will follow suit. We are bounded by time and therefore this law will be helpful in reducing the amount of time and work required in our journey to success.