The final strategy I recommend is reducing your bad debts. Bad debt can be defined as debt that is created during the acquisition of that which is disposable or depreciates in value. Two prime examples are high interest credit cards that are not paid monthly in full, and automobile loans. When you finance things that are consumable, rest assured, that this is creating bad debt. Purchases made with a credit card, when the full balances are not paid monthly, become a financial drain. The drawback with auto loans, unfortunately, is that when you purchase a new car, the moment you drive off the lot, the car loses value. Using the financing options available today, most people purchase higher priced autos than their financial situation allows. Payments amortized over multiple years can make almost any car affordable to anyone. However, after years go by, and the car is paid off, it maintains very little of its original value. These types of debts generally carry a much higher interest rates as well. Good debts are investments that eventually create value. Example, a student loan is taken out with the intent that it will increase the future earnings potential of the individual, additionally, home loans are also good because generally, homes appreciate in value. When the home loan is paid off, the individual will be left with an asset with greater value than the original loan itself. So this adds wealth by generating net worth. An advantage of good debts, they carry much lower interest rates, and they usually benefit from many tax advantages as well. If a home owner carried a $5,000 credit card balance, and was paying 19% interest, it is possible to use the home's equity to pay off the $5,000 credit card balance and eliminate the 19% interest, and then carry the $5,000 at the lower interest rate of the home equity loan. This decreases total annual interest costs, as well as providing tax advantages. This may not always be feasible, but understanding the ramifications is important as a consumer.

Clearly, individuals are controlling the course of their financial future. Only by application of the proper methods can the correct plan be employed. Each day, move forward toward a pre-established goal. Visualize your existence as you wish it to be, act with force to manifest it. The mindset of an individual is the nexus of his reality. Create your reality by doing the things that cause success. You decide what you will be.

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