Up until now, the power of compound interest has been working on behalf of the credit card companies and loan companies. Let's make it work for you.

You may wonder how it can take 30 years to pay off that credit card balance. Would the credit card company want you to take so long to repay them?

The answer is YES!  In fact, if you took 30 years to pay off your balance, you would be the ideal customer. They understand the power of compound interest. It's important to understand that the credit card companies don't allow you to pay back your debt in small amounts out of the kindness of their hearts. This is how they make their money. Paying the minimum payment (usually around 2% of your balance) each month makes the credit card company wealthy and keeps you in debt for years. Your payments include both interest and principal (the amount you borrowed). When you pay only the minimum payment, most of it goes towards interest, which is why it takes so long to pay off the original debt.

Net Worth

This plan can increase your net worth from the very first month, so you are actually building real wealth from the beginning.

The true measure of wealth is NET WORTH. Net worth is all your assets, such as the value of savings, investments, house, vehicles, furniture minus all your liabilities, such as balances on home loans, car loans, student loans, credit cards. As you pay down your debts on the very first month, you have reduced your liabilities and increased your overall net worth. It may be small the first month, but your net worth went up. Like an avalanche, it will grow and grow and gain momentum. Eventually, you will be adding more to the asset side of the equation, increasing your wealth in a surprisingly short time. Compound interest is now working for YOU!

Included with the DebtWealthPlan is a Net Worth Calculator so that you can track your progress. It can also help you stay focused and motivated. The advertising industry, the merchants, and the credit card companies are always working very hard to drain you of your hard earned money and your future earnings. You will no longer fall victim to the minimum monthly payment trap. You can then purchase with cash, and you ALWAYS buy things cheaper for cash.

For example, let's assume a household with $60,000 annual income and $149,047 in total debt.

The debt includes 2 car loans ($29,322), 2 credit cards ($6,583), a student loan ($7,900), a home equity loan ($9,200), and a home mortgage loan ($96,042).

Using the DebtWealthPlan, this family could be completely debt-free, including their home, in just 8 years, 4 months (100 months). They would have saved $74,810 in interest payments. (All this is automatically calculated using the DebtWealthPlan Calculator).

It would have taken 26.5 years (318 months) to become debt free without the plan. Then, by investing the newfound monthly cash flow for the additional 218 months (318 months -100 months) at 8% interest, the investment could grow to $967,807. (The DebtWealthPlan Calculator can also calculate the future value of your investment).

This may seem surprising or may even seem impossible. But the really amazing thing is that all this was done without any extra payments or any additional income. The plan only utilized the monthly debt payments that this family was already making. What made the difference was a strategy, using the DebtWealthPlan Calculator to prioritize the debt pay-off schedule, and the concept of compounding.

If you can find ways to cut expenses and have the ability to make additional extra payments each month, you certainly could accelerate the pay-off of your debts even more. But with this strategy, it is not necessary, and for many of you right now, it may not be possible.

For the sake of comparison, what would happen if you made an additional extra $100 payment each month using this plan? The family would be debt-free in 7 years, 10 months (94 months) and saved $78,162 in interest. The additional investment would have 224 months to grow to $1,071,049. The $100 extra payment pays off the debts 6 months earlier.