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Even though the last few years have been very good for the American economy, there is, however, pessimism by some industry watchers who believe that the bubble may well burst soon. Most Americans, including entrepreneurs having over-leveraged themselves, are possibly risking their long-term financial well-being.
With the rates of interest projected to keep climbing in the future, it is quite likely that the average startup owner’s debt situation would become even worse. Entrepreneurs already carrying a lot of debt should try to become debt-free, but without making the typical mistakes that can compound the problem instead of resolving it. After becoming free of debt, they can then focus on building their net worth quickly by taking the lead from young entrepreneurs who have already become millionaires. Some tips:
Mistakes to Avoid When Attempting to Become Debt-Free
Not addressing the real cause of the debt: Most entrepreneurs are forced to use credit cardsfor their businesses since banks do not lend readily to startups. However, when they fail to keep track of their spending or to limit the expenses to what their cash flows can cover, they land up in a financial mess. It is very important for entrepreneurs to have a budget in place that ensures that they can consistently stay within their means and generate surpluses that can be used to either create an emergency fund or plowed back into the business to fuel growth.
Continuing to use the credit cards: Most entrepreneurs are under the impression that they can be disciplined enough to keep swiping the credit cards and paying off the new charges in full while paying off the old dues to some extent. However, most often, this self-imposed restraint never really works and the dues continue to pile up making the situation worse. According to https://www.forbes.com, for any real debt resolution, you need to stop using the cards while you are engaged in paying them off.
Using zero percent balance transfer offers and continuing to use the old cards: If you have dues accumulated on your credit cards, you can really benefit by taking advantage of a zero-percent balance transfer offer by a new card. You can enjoy a 12-18-month period of no interest at all and save handsomely. However, the mistake most people make is to start using the other cards that they had maxed out but now which have no dues. Another common mistake is that the new card gets swiped more to take advantage of the interest-free offer, however, the dues zoom in no time and a debt-trap looms fast.
Making card repayments at random: Most people know that it is best to pay off the debts whenever they have extra cash; however, they do so completely randomly. It is best to use your extra cash, whenever available, to create an emergency fund to meet unexpected expenses and then pay off the card with the highest APR since that will potentially save you the most.
Getting out of debt is most successful when you have a practical strategy. Experts suggest that if you have too many credit cards with large amounts of dues, you should consolidate them and pay them back with a debt consolidation loan. Not only will you be spared of the trouble of tracking multiple statements for their due dates but also you can save significantly on the interest expense. If your debt is completely unmanageable considering your cash flow, then perhaps debt settlement could be an option to declaring bankruptcy. However, you must use a reliable and ethical debt relief company like Nationaldebtrelief.com
Qualities of Entrepreneurs to Become Millionaires after Fighting Debt
Most entrepreneurs have to struggle hard to keep their businesses afloat and meet with success only after a long fight. However, there are some really exceptional ones who are able to convert opportunities almost magically and become millionaires even before they turn 30. Obviously, such incidents are not accidental but are a result of some characteristics and personality traits that set them apart. A quick overview of these traits for inspiration and emulation:
Ability to dream big and act urgently: Millionaire entrepreneurs are distinctive by their ability to think big and act with a sense of urgency. They back up their vision by acting with energy and urgency and do not wait for things to fall into place by itself. Young achievers neither are procrastinators nor become complacent after meeting with success but continue to persist to achieve their goals.
Seek to learn from the experienced: One of the biggest reasons why some entrepreneurs are successful at such a young age is simply because they know that they have lots to learn. As a result, they actively seek out mentors who have extensive experience in the sector of interest putting aside their egos so that they can learn from their perspectives and insights. According to https://www.entrepreneur.com, they are also able to leverage on the networks of the mentors to avail of lucrative opportunities.
Thrive on learning: Almost every young entrepreneur who has achieved success has been found to have an insatiable thirst for knowledge. Knowledge can be acquired by reading, from podcasts and videos on the internet or by consuming content delivered in myriad other forms. It can also be acquired by personal interaction by attending seminars, workshops, lectures, classes, courses, and more informal or casual settings. Make sure that you stay updated on the latest developments in your field by actively learning in a focused way.
Not afraid of taking risks: Most of the successful entrepreneurs have not achieved what they have in the first shot. The difference between them and the rest is that they are not afraid to experiment or risk failures. When failure does occur, as it must, they simply learn their lessons and bounce back with renewed energy.
Conclusion
Getting trapped by debt is not an enjoyable affair; however, with discipline, determination, and good habits, entrepreneurs can overcome debt and start off afresh. By inculcating the traits of successful entrepreneurs who have become millionaires early, they themselves can forge ahead and boost their net worth to enviable levels and become millionaires in their own right.
