 Hey guys, we are back here with episode 19 and we never got canceled. Can you guys believe that? Right here, live with me in the studio, Theme Tech, Hawaii. If you want to call in and talk to me on this episode, 888-374-2014. We're going to be talking about should you pay off your debt or should you invest? That's a common question a lot of people have. A lot of people have that question simple because you're learning about investing, you're hearing about Bitcoin that hit us all the time high, the market is at us all the time high and you feel like you're losing out or something. But if you like the other 80, 90% of Americans, you accumulated some type of debt. Whether it's student loans, credit cards, car payments, whatever the case may be, you have some type of debt. So everybody asks this question, it's like one of the number one questions that I'm actually asked, should I pay off my debt or should I start investing? But that's what we're going to get into in this episode. We're going to talk about debt, the problems of debt versus investing. Nothing is cookie cutter. So I'm just going to give you guys my personal take on it, my personal opinion, things that I went through with it publicly and not publicly but personally myself. Now, most credit cards run about 15% if you have some type of credit cards. Now, I never occur student loans because I'm a veteran, you know, serving the military, so I never had to worry about student loans, so I'm not sure the interest rates on that. But think about it, if you've got a credit card that's averaging 10% to 11% to 15%, and if you pay that off, you automatically are in a positive 15%. Make sense to, let's take a picture of it like this, right? If somebody owes $20,000 on a credit card and the credit card accures 11% to 12% annually or whatever the case may be. Now, that person has this credit card, this credit card is earning interest as it goes along, 12%. Now, if a person decides, hey, you know what, let me pay off my debt. If that person pays off their debt, they have automatically put themselves in a positive just by paying off the debt. It's no risk, it's no what if the market goes down, what if it goes up, no performance or nothing. You have increased your income by 12% just by paying off that credit card. But this is what usually happens. Something I've been through in the past with myself personally, right? You may have a particular debt and you may have an investment opportunity. Man, you know, this thing called Bitcoin is out there at $8,000 now. It's at an all-time high. It's up 735% this year alone. I have been watching this trucking alone, trucking alone, trucking alone, trucking alone. And I want to get in. But I also owe this credit card. Then what may happen? You may say, hey, instead of me paying this credit card, let me jump into this investment opportunity. You jump into this investment opportunity, did you calculate for risk? You have to calculate for risk. What if that investment blew up? Say if something happened with Bitcoin or whatever the case may be, this risky investment that you had, something went wrong with it. Now you have 15% that you lose on this and plus your investment could possibly lose them. But if you pay off your debt, you have a guaranteed positive win. So that's the thing I want to talk about this, because everybody, most Americans, whether you know, it depends on what level, income level yet. You got low, middle, high. I don't know the income. Like, oh, if you make this much, this much, it depends on where you live at. Because if you make, you know, depending on the area you live in, the income and stuff like that. But this is one of the things, right? When you're at the bottom, you know, or the lower class, the lower class, you lose struggle with payday loans. You know, they go out and get a payday loan or they may struggle with the credit, not a credit card, but usually payday loans, they may buy lottery tickets or something like that. Or maybe drugs or alcohol or whatever the case. Now I'm not saying that those are only people that use it, but we're just hypothetically speaking what people use with struggle with. Now when you move on, you move to the middle class. The middle class are the ones that look a little bit wealthy. They're usually your, you know, white collar workers, some blue collar workers. They usually have the, you know, three, four, five bedroom house and they have the nice cars. They have the nice, they may have a timeshare, you know, things like that, right? They may have a boat, different nice things. They may go on a couple of vacations a year. They're the kind of class that look wealthy, but they just haven't crossed over. And the thing about that, why I'm saying that is their debt is just different from the lower class. The higher class are the ones that usually, they usually don't have debt. The problem is that sometimes they expand themselves too far. They got too many irons in the fire. They invest in too many things. They, some of them may have a spending problem, but most of them invest their money in different areas. So I'm going to talk about my hands a whole lot. That's supposed to not be a good thing, but whatever the case may be. But that's the thing about it, right? Everybody has different debt at different levels. So if you have a credit card, if you have student loans, if you have a card note, if you have anything, and let's say your card note is 8%, let's say your student loans are, I don't know, 5%. Let's say your credit card is 15%. If you pay those off, there is no risk you have increased by 15% automatically. Some people say, well, I don't have the money to pay off. It's just $20,000. I don't have that much disposable income. But one of the things that I had just did on my podcast last week, we had Mr. Mark Wingo, where he spoke about how he paid off $45,000 worth of debt. He was in the Forbes article for this. And one of the big things that he said is how he paid off his debt is that he stopped everything. He stopped contributing to his retirement. He stopped contributing to his investments. He stopped everything. Everything, you know, because it didn't make sense to pay into your Roth IRA that's probably earning maybe 10%, 15%. But then you have a credit card that's earning 20%. So now when you look at the real returns, you're going negative 15%. So what he did was he stopped everything. He stopped eating out. He stopped every little thing that he could. And he drew himself down to just essentials. And with those essentials, those essentials were pretty much what the bills that they had in the house, they didn't contribute to any other things that they had, any other card notes, nothing like that, right? And they focused exactly on the debt. It was like everything was put, all their resources were put into tackling down the payments. And what they did was they started with the small ones, the little ones. So $50 here, $100 here, paid off, paid off, paid off. And then they worked, they were up to the bigger ones. And everything in the house, if it was cable, they cut off the cable. They cut everything back, you know, instead of having these big cell phone plans, they broke down their cell phones to say, hey, this is exactly what we need. All our money is going to pile straight into, we're not going to put our money anywhere else, we're going to focus and go straight into this. Now, when I was speaking to one of my buddies, he brought up a good point. He said, hey, Prince, listen, what if I put all my money into paying on my car, and then I wreck my car? What if I do wreck my car? Because guess what? Now my car is paid off, what is going to happen now? The thing about that is, yes, that's true, that could happen. But if you do pay your car and, you know, the insurance company, you know, you towed your car away with the case of an insurance company pays you out. The only way you can benefit from that is if whatever the payout the insurance company gives you, you pretty much have to buy car cash with that. Whatever your payout is, let's say, you know, you had a car that you paid $20,000 for, you paid it off cash, you wrecked the car, and the insurance company only gives you $15,000. With that $15,000, you pretty much have to purchase something within your means of the $15,000, for it to even be kind of worth your time. But that's a risk. That's the only risk I can think of with paying off your debt. But if you have a debt, the thing is to pay it off first. That's my thing. I know it's a hard thing to do because you feel as though, man, you know, pay myself first, pay myself, you know, I want to be able to invest, you know, watching shows like this and I'm watching, you know, we're in a bull market, meaning that it's going up. We're in a bull market, we've been in a bull market. You're watching everything just rise and rise and rise, which is true, which is I understand where you're going. But trust me with this one, I sat down and did the numbers. It just didn't make sense to me personally. To be aggressively investing when you're carrying a debt. What you need to do is to pay off the debt first. But guys, we're right here with live 8083742014. If you're here live, you can join us on the call to see if you want to speak about your particular thing. I know this is one of the biggest questions I'm always asked. Prince, I have this particular debt. How can I pay it off? But that's one of the ways you can do it. Pay off your particular debt immediately. Now, the thing about it, another question I want to ask me, like what if I have something in collections? If you have something in collections and it's wearing down your credit, you know, my suggestion would be to negotiate. Because most collection companies, they buy debt. They go out and let's say something costs, you know, that $20,000 credit card that you ran up, another company will come in and they will say, hey, we'll buy it from you for, I'm just throwing a random number out there. We'll buy it from you for $5,000. We're going to buy $20,000 debt from you for $5,000. Boom. Your bank gives it to this collection company. Now, this collection company has purchased your $20,000 worth of debt for $5,000. Now, they're going to be the one that's going to turn into like a bounty hunter. They're going to call you. They're going to press you and say, hey, where is the money? And where is it? What are the case may be? What are the case may be? Now, they purchased this for $5,000. If they can get you to possibly settle for $15,000 or $10,000, they're still, it's a profit for them. But they're not going to tell you that. They're going to say they want all the money, plus the late fees, plus their interest, plus their collection fees, all the other good stuff like that. But what you can do is you can call and negotiate to say, hey, I know it's $20,000, but hey, I have this much cash. I have $1100 or $5,000 or $6,000 in cash. But you only have the purchasing power. If you only have the purchasing power, you have cash. So you got to save up your cash. If you have cash, I would say negotiate with your collections and negotiate with him down because most of them pay, you know, $10 to a dollar, $5 to a dollar for every dollar that they purchase of debt. So a lot of them will work with you, especially if you got cash. I mean, it's like anything else. If you negotiate, make sure you have a statement from them saying, hey, this is how much it costs, this is what you're going to pay, all of the good stuff like that. And one of the big things that I've seen, like I know how we do it these days, everybody do direct deposit, but it's not a pretty good idea to give a collection agency your access to your check-in or savings or bank account because, you know, they may scoop out a whole lot of money, then you may have to go through a whole bunch of stress trying to get the money back that they took from you unauthorized and they're going to say, oh, well, you did authorize it. No, don't think you're going to live with it. It's taking legal action. What you're going to require even more money, stuff like that. So I would say, hey, how much it costs? Turn off a check to them and say, you know, make sure you have a registered check that you can track everything that you did to make sure you paid everybody off. That'll be my thing if you have something in collections. So that's one of my things I would say because I know a lot of people out there are asking that question. It just makes sense. If I have a credit card earning 11%, and yes, the market may be earning 13%, but if my investment is getting me, it's if you only have $10,000 to $5,000 invested, getting 10%. But you have a $20,000 credit card getting 20%. This doesn't add up. You're working backwards. So you might as well take that $5,000 that you have invested, put everything, all your resources, all your eggs, everything into paying off the debt first. Pay off the debt first. Once the debt is paid off, you reset everything. Now you're in a more powerful position to be able to buy and buy and buy. The thing about it, when you're looking to purchase, when you're looking to invest, people say over time, you have to sit back and look at what is the long term. So, but what we're going to do here, we're on our break. So we're going to take a one-minute break. You guys stay tuned. The live number is 808-374-2014. The Prince of Investing, I'm here live. We'll be talking about paying off your debt and or paying off your debt versus invest. Stay tuned. This is Think Tech Hawaii, raising public awareness. Hello, I'm Vic Kraft, the volunteer host of It Never Got Quiet. Think Tech is important to me because we can bring the issue of Hawaiian veterans of the Vietnam War to the community and tell their story. For the first time, Think Tech Hawaii is participating in an online web-based fundraising campaign to raise $40,000. Give thanks to Think Tech. We'll run only during the month of November to help. Please donate what you can so that Think Tech Hawaii continue to raise public awareness and promote civic engagement through free programming like mine. I've already made my donation and look forward to yours. Please send in your tax-deductible contribution by going to this website, www.thanksforthingtech.causebox.com. On behalf of the community enriched by Think Tech Hawaii's 30-plus weekly shows, Mahalo. And we're back live, 808-374-2014 to call in live to speak about, you know, your particular debt and things like that. Now, I want to give thanks to Think Tech because this is a very special episode for me. Well, a lot of you guys that don't know, I will be relocating to Denver, Colorado. But I'll be taking the show with me, The Prince of Investments to Denver, Colorado to bring some heat to Denver. So I want to give a big thank you to Think Tech for, you know, I want to give a big thank you to Think Tech and their amazing staff of allowing me to have this show and to have this type of platform to be able to bring financial literacy. And guys, we are the number one financial literacy show here in Hawaii, number one. So I want to thank them for that and to give thanks to Think Tech, I don't know the link off the top of my head, but it may run across here at the bottom to where if you want to show things to them, donate to them and things like that to Think Tech for having amazing programs like this, I want to, you know, do that, but I'm going to put in my link in my description box on YouTube. But yeah, that's one of the things I want to think that I will be relocating into Denver, Colorado. We're going to be shooting live or whether the case may be, we're going to work that out to get the show aired. Here in Hawaii, still, even though I'll be in Denver, Colorado, when it's just a little cold. So that's the thing about it. Back to it. 808-374-2014. I left this episode a little bit more open to talk about, you know, our time here and the things that we really enjoy. You know, things about our debt and things like that. And I took a personal note to myself. I noticed, you know, as a socially and society has pretty much raised me, I'm normally to think that material was success when I saw someone's watch, when I saw someone's car, when I saw someone's house, that was a signature of success to me. Which in a lot of cases it is, but I thought that, hey, once you start to make money, you start to make a certain amount of money, you're supposed to have this type of car in your house, where this type of clothes, do these type of things in whatever case. Having a credit card is okay, everybody has one. You know, this one has greater rewards, that one don't have greater rewards. This one is just the way the case can be. But those rewards slowly lure you into using it and it depends on the credit card and then it gets into a dangerous area. Now, the thing about that is it has become accustomed to you have $10,000 when you can purchase a car for cash for $10,000, most people won't do it. Most people will say, well, you know what, I can go finance a car versus paying for a car. So, the thing about it is, you know, because when you finance a car, your car looks a whole lot nicer, you look more successful, who cares, you can pay for the monthly bills, whatever the case may be, but think about if you just took your own $10,000 cash and purchased your own car, who cares what anybody thinks, what you look like, and then think about that money, the average car note I want to say is about what, $400, $500, I don't have the particular data on me, but I want to say it was like $500 the last time I saw. And with that being said, that $500 could be invested into an index or a mutual fund or whatever the case if you want to do. Some people say mutual funds, some people say index, tomato, tomato, it's up to you. But that's one of the ways to look at it. That's one of the ways I wanted to look at it too is to say instead of having a car note, imagine if I can take my car note money and invest it over and over and over and I purchased a car what I have. So that's the thing about it. First, eliminate the debt because if you eliminate the debt you have increased, you've got to return your investment automatically. Whatever your student loan interest rate, I'm not 100% sure. You are now having it as an income. Whatever your credit card is, whatever your any outstanding debt collection whatever you have, whatever that interest rate is you have increased. That's a guaranteed return on investment if you pay off the debt. If you invest into the market you have to worry about volatility. If the market is going down, if the market is going up what the case may be. And you can end up worsening your situation by having your debt by having a debt that's 15% then having an investment that doesn't do well. So that's something to think about. Pay off the debt, it's a guaranteed return on your investment. That's my word to you guys. So those are the things that I want to talk about in this episode because I know I'm asked that question a lot and I know people ask me that question all the time. Hey, Prince, you know I have this debt and you know I'm looking at this investment I'm making this my investments, earning this my investments, earning this. That's great, you're up 10, 12, 15, 20% of your investments. But on the other side how much money do you have invested? You got $10,000, $20,000 invested that's earning 10, 15, 20% great, but if you owe $20,000 on a credit card that just doesn't make sense. You got to look at the real return. That's something I want you guys to think about. But anyway, the number is number 42014 if you want to come talk about your particular investing and things like that. But this episode I want to wrap up this episode earlier than usual. This is my last episode here at Think Tech Hawaii for a while. You know, with my life traveling I may be back, but I appreciate it. Love the studio, great staff, great people that allowed me to come in local nonprofit here at Oceanic Cable, Time Warner going over to Democratic Colorado where we'll be taking the show and we're going to bring some heat to Democratic Colorado and keeping the number one financial literacy show alive. And the thing about it too is you know, you guys probably heard me showing all the episodes where we said hey man, you know Think that we didn't get canceled, we're about to get canceled I didn't think it would have lasted long but we're going to be on like episode 19 or 20 now You know, I thought that hey, maybe we may just do a couple episodes and it may go away But thank you guys, thank you all the guests that have stopped by here at this location here in Hawaii from The Wolf of Wall Street to Metal World Peace Michael V. Roberts, chief editor of Yahoo Finance, Andy Sory I can't even think, it's been listed so long I don't want to forget anybody you know, star-studded and amazing guests that have stopped by and guys, we have more NFL athletes, veterans, stuff like that so I definitely enjoyed it but anyway guys don't forget to drop a comment you guys got courses, send me emails stay tuned to what I'm going to do next because I will be doing something stay tuned to my social media but as always guys, my name is Prince Dykes this is The Prince of Investing and to the next video I can't so whatever you see me do crazy around the globe Peace, be safe, I'm out and thank you