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9 Tips On How To Rise Majestically From Debt Into Financial Independence

Inversk Review



The financial scene is littered with fallen soldiers. They entered the battle field with an intention to conquer, but they got waylaid, cornered, outwitted and finally broken. I am talking about money. I am talking about borrowing. These soldiers did not go down without a fight, they were courageous and gallant. In the last battle, they needed support, they needed urgent emergency help. It did not arrive on time. This article is a last-minute support for you who is struggling with debt, but it also provides vital cautionary skills for those just entering the financial battle field.

How Do You Get Into Debt?

More often than not, a need arises out of the blues and impulse tells you that it must be satisfied now even if you do not have the resources to do so right away, leaving you with no option but to borrow. We humans are wired to be lazy and to take the easy way out, therefore instead of thinking of alternative solutions to meeting the arisen need, we think of the fastest way out, which usually turns out to be borrowing.

You borrow because you did not have an emergency kitty in the first place, and most of the time your expenses are always ahead of your income.

Once you have borrowed, your need is met, leaving you momentarily satisfied, but soon this bubble is busted, for the lender comes knocking, demanding to collect more than what was lent to you, in the name of interest.

On the first attempt by the lender to collect money from you, you may turn him away successfully, but he will come back stronger each time and the pressure will mount till you are forced to borrow elsewhere.

There is a real awkward positive correlation between urgency to borrow and interest rates, hence each new lender will notice your desperation and charge you more. This    increased interest is an additional expense on your already miserable income verses expenses situation.

And the cycle continues till you are buried in the heap of debts and become a statistic of this deadly dragon called borrowing on the financial mine field. The stigma from society does not help the situation either and most individuals would rather keep quiet than talk about their financial difficulties.

How do you avoid this and majestically rise out of this heap and trod the financial landscape like a colossus again in less than six to twelve months? Below are some tips to include in your plan, in addition to personal focus and resilience while handling debt.

  1. You Are In A Shit Hole, Stop Digging Deeper.

You have debt, big or small it is still a debt that you must service. However, on the other hand, life must continue, and needs will keep jumping at you out of the blues.

Before borrowing again, it is important to ask whether the arisen need is a matter of life and death. Can you postpone this need or must you have it now?

If a need is not life and death, good judgment dictates that you postpone it and find better ways of financing like saving and or working for it.

  1. Calculate Borrowing Costs And Use The Information To Your Advantage.

To borrow, you must be aware of a few important concepts like the difference between annual and monthly interest rates, principal and interest repayment amounts, and even the difference between lenders such as shylocks, Sacco’s and Banks.

How are interest and monthly repayments calculated, what is the difference between simple and compound interest and what are the consequences of defaulting on your repayments?

If you must wait for your financier to calculate any of the above financial parameters for you, you are still a toddler in matters borrowing and you should not be borrowing, but rather joining a financial education class to grow your capability in this matter.

Knowing your borrowing costs is extremely important because the nature of the lender and the interest rate increases your risk to default significantly. If you borrow from a shylock at a rate of 20% per month, your repayment to him will be double in less than 4 months. It means if you borrowed Ksh100k, you will pay him Ksh200k in 3 months. Compare that to borrowing from a bank at 14% per annum!

This information provides an opportunity to identify friendly and cost effective lenders where you can swap expensive debt for cheaper debt.

  1. Make Your Payments On Time

If you are delaying or missing on your bills and loan repayments, this is exactly a red flag symptom that you are struggling with debts and expenses.

Unlike expenses which you can avoid by stopping to consume completely, debt is a fixed outflow till you have completely repaid it.

Calendarize your repayments and set reminders a week before payment date.

  1. Prioritize Which Debts And Bills To Pay First

Start with the most expensive debts and pay your most needed bills. Cancel subscriptions that you do not need and where a lender allows you to pay a minimum amount, consider utilizing that facility to reduce on the risk of defaulting on other repayments.

Defaulting debt is expensive as it comes with late payment fees and penalties plus additional interest charges that you would rather avoid now.

  1. Know Who And How Much You Owe

This should be the first tip right? Do you have a list of your lenders and how much you owe them? In Chinua Achebe’s book titled “Things Fall Apart”, Unoka, a borrower, had drawn lines on the wall as a record of his debts.

The longer lines indicated lenders whom he owed more and the shorter ones those whose debts were little. He is reported to have used these lines to taunt his lenders when they came to collect by showing them that their lines were shorter hence they should wait till he has paid the longer lines which represented bigger and more important borrowers.

  1. Recognize And Appreciate The Danger In Borrowing

In a state where you are pressured by a need, be it physical like hunger or external like school fees, you are not reasoning with your head, but rather, you are looking at the problem at hand and trying to resolve it with the most minimum mental effort.

You stupidly count yourself lucky because there is a lender willing to bail you out, yet you are welcoming yourself into a debt trap, which will take you years to overcome, because your income is not going to grow overnight for you to afford to handle the repayment and the interest thereof, especially where you have borrowed for consumption purposes.

  1. Use A Budget To Manage Your Expenses And Debt Repayments Wisely

Maintaining a budget helps you allocate enough money to cover all your expenses month by month. By having an annual budget and tracking it on a monthly basis, you can take early action like borrowing or saving if it looks like you won’t have enough money for your bills in any future period.

A budget also helps you plan to utilize any   extra money you have left optimally after expenses are covered. You can use this extra money to pay off debt faster.

  1. Keep Your Lenders Close

These guys have financed you, but they may not necessarily be your friends. Most of the time they are profiteers who will do anything to recover their funds from you. Take the case for Jona.

Few months ago, Jona borrowed money from a shylock who promptly started collecting 20% interest from him after 30 days of advancing the money. The shylock kept pushing Jona for interest payment every other month till Jona started borrowing from his colleagues and friends to repay the shylock.

The situation got worse when the colleagues started demanding their payment till he could not afford food for his own family. His wife herded their son and left him for a neighbor (I guess the neighbor could buy food and meet her financial needs).

Jona got into depression and couldn’t continue being productive at work at the rate he’s expected. His boss quickly put him into a performance management program meaning that he could not access bonuses, pay increments, loans or advances, compounding his money woos.

In his state of depression, Jona has not been able to keep up the pressure and he no longer receiving calls as he does not know which lie or promise to give to his lenders.

Both the shylock and colleagues have been agitated and have continued to chase and load interest on the uncollected amounts. Colleagues have made it obvious to other staff that he owed them, compounding Jona’s stigma.

The shylock had, after realizing that he could no longer collect the repayments, promptly wrote to Jona’s employer and kept reminding the employer that Jona had not paid him. He continuously sent auctioneers and police to Jona’s office till the employer decided enough was enough and last month, Jona got sacked to face the unfamiliar world of hustling.

What’s next for Jona?

By being in constant touch and communication with your lenders, you can avert some   extreme actions from the lender by negotiating for time and as well as forgiveness or reductions on interest.

  1. The Fundamentals Of Borrowing

Why are you borrowing? Are you borrowing to spend or to invest? If you are borrowing to spend on luxuries and entertainment, you are effectively living beyond your means and this is a recipe for debt problems.

Borrow to finance life and death needs.

Borrowing is a very effective way of building capital because it’s the only way that owners of capital share this economic resource with owners of ideas, who then use these funds to convert the ideas into useful products and services for sale at a profit, effectively redistributing wealth and capital within the populace and reducing poverty.

By borrowing wisely, you can bridge the timing gap between income and expenses and get continuous business operations, because lack of working capital means no production in business.

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Personal Finance

The Power of Having a Financial Vision.

Kevins Jerameel



Vision is the incubator of greatness so they do say. Vision is the genesis if tremendous growth and freedom. Success begins with a vision. A vision is a picture of a preferred destination. A vision is a mental image of possibility that flashes within your mind. To succeed in any field in life, you need a vision. Financial freedom begins with having a financial vision.

Sam Walton opines that capital is not scarce, but vision is. Money is simply a byproduct of vision. Vision is the most important asset. Build and develop your vision. Allow your vision to grow within you. Nurture your vision until greatness is fully incubated within you.

The world desperately needs your vision because your vision is a solution to a problem facing the world. Vision is valuable. Vision is power. Vision brings transformation. A financial vision is not just about having money, it is having a clear investment vehicle that will generate the finances you need.

The vision speaks of the person you become. The person you become will determine the wealth you create. Who you are determines your worth. Vision must be incubated and nurtured within the faculty of the mind until it matures and it is finally birthed out.

Whatever the mind conceives, it can achieve. Within the womb of the mind lies rich dreams that can change not only your life but future generations. When the mind is pregnant with the vision of change and greatness, nothing is impossible. Believe in your mental vision and surprise your world………. all wealth is within your mind! People that have created wealth made it through investing in their vision.

What you see is what you become. Every successful high achiever envisioned himself moving to higher levels even when before success manifested in the natural. People move to great levels of wealth because they are propelled by a vision that pulls them higher and inspires them to act in order to achieve the freedom they desire.

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Personal Finance

The Power of Financial Knowledge

Kevins Jerameel



One scholar once said knowledge is power, another scholar dismissed this assertion. To the latter, his school of thought had it that only applied knowledge is power. Over the years I have come to understand that ignorance is expensive. Knowledge is the key to both making money and managing it.

Capsules of knowledge are hidden in financial lessons. Applying the lessons learnt is the only proof that you have mastered your trade and it is your bridge to accessing uncommon levels of greatness in life.

Financial knowledge is the reason someone can rise from poverty to wealth. It is the reason someone can bounce back from bankruptcy to a millionaire.

Money can end but the ability to produce wealth still exists. The money may not be there but the bank of knowledge can never go bankrupt, the person still has the ability to create wealth. The real wealth is the knowledge you have not the money in the account. Those who forget to invest in knowledge soon loose their money and will to make money again.

What you know is more important than what you have. What you have is a by product of using and applying what you know. Money will not respect you if you don’t have the knowledge to keep it and multiply it. You need a rich mind loaded with rich knowledge in order to be wealthy and successful in life.Jim Rohn observed,  ‘formal education will make you a living, self education will make you a fortune.’

If you are going to live beyond just making a living, invest in self education. Invest in empowering your brain for wealth creation. As one Joseph Obwanda opines investment on the head always pays the best interest. Your financial literacy will determine the money you command. Benjamin Franklin observed, an investment in knowledge pays the best interest.

An uninformed man is a deformed man. Information will increase your intelligence. Information is a valuable currency and asset in the current world that we are living in. Successful people value and invest in information. The wise act out of an informed perspective.

Invest in yourself by acquiring skills, attending seminars and talking with successful persons. Knowledge is the only currency that does not diminish in value. Financial ignorance can cause one to live a life of oblivion. Do pursue new investment opportunities and constantly learn new skills on money management and investing. Your knowledge is your greatest source if financial freedom.

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The Power of Investing

Kevins Jerameel



What is investing? Investing is a process through which you make your money work or to grow or appreciate for a long-term financial goal. One author of business books observed, “Rich people see every dollar as a seed that can be planted to earn a hundred more dollars which then can be replanted to earn a thousand more dollars. Investing is a process: it is a journey.

Life is all about investing. There can never be financial freedom without the power of investing. Investing is the ability to multiply your capital assets. It is to spend money with the expectation of achieving a profit or a material result by using other financial vehicles like commercial ventures, property or shares.

Investors are smart. If there is a time when there are unique financial opportunites that time is now. Smart people use asset finance to advance their lives and business forward. When your money is put in motion through business and investing, you create an opportunity to making more money. Money has more value when it is working for you. Save with an intention to invest for it has the greatest return.

When you have a big mind, you will invest your money by putting it into motion. Learn the secret of sending out your money to the world and ensuring that it comes back with a multiplying effect.

The reality of the matter is that money reproduces itself more quickly as you are willing to assume more risk. The higher the risk, the higher the return. Robert Kiyosaki, author of Rich dad, Poor dad, observed, “Often, the more money you make the more money you spend. That is why money does not make you rich but assets will make you rich. “Cash in the bank is nothing, you must invest in assets. An investor is focused on increasing his asset base. A person who is risk averse is conscious of increasing only his savings.

Investors have a different mindset they have a high appetite for asset acquisition than for having money alone. They do understand verily that the more they acquire assets; the assets will work for them and generate more money than they would ever need. Invest heavily in asset acquisition in order to secure your financial future.

When making an investment, ask yourself these questions;

  1. Will I get my money back? {risk}
  2. How quickly will I get it back? {Velocity]
  3. What is the expected yield or return on my money? {reward}

Based on this criteria and evaluation, you can make an informed investment decision. There are two important rules for investing. These rules are so simple that people fail.

Rule no.1: Never Lose Money.

Rule no.2: Refer to Rule Number 1

Pulling away money for investing is very important if you are going to achieve financial freedom. What is investment? Investment money is: money reproducing itself, money coming to you not away from you. Money coming from other people. Money working for you.

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