When it comes to money, there’s no shortage of questions. When it comes to YOUR money, the answers to those questions can be life–changing.
The problem is, there are so many choices available. Which path makes the most sense to take? One of the most important– but difficult– things to do is to shield yourself from “sales agendas“. There are a lot of them out there.
What’s the best way to do that? Ask questions. Then challenge the answers to ensure they make sense. Verify everything!
The answers you get in response to your questions should have fact-based reasons behind them. If the person, website, or service you’re communicating with tells you something but can’t back it up with a solid foundation of examples and facts to substantiate their position… well, maybe it’s better to look elsewhere— or at least get a second opinion. You’d do that with your health, so why not do it with your wealth?
The section below is a collection of some of the most common questions we get asked by students, customers, clients, and candidates. Click on the questions to see our answers. If you have a question that isn’t listed below, feel free to visit our Contact Page and send it to us on our inquiry form. We’ll get right back to you, usually within minutes to a few short hours… not days. Also, read more about our Financial GPS, or schedule a live phone or Zoom consultation by clicking the buttons below.
There are many programs, courses, books, and videos available on the topic of becoming debt-free and/or building wealth. There are many popular and well-known celebrities in the financial field. Each of their programs has similarities and differences. Some of the differences are related to priorities and core values of the programs’ authors, while others are related to methodologies, resources, technologies, support structure, and overall regimen.
All of the credible programs and systems agree that consumer debt (such as credit cards) is toxic and should be paid off, never to be built-up and revolved on again. When you start getting into asset debts, there are a few differences on the “right” or “best” approach. Some address how the “rich” treat debt as a tool with a “good debt/bad debt” argument, while others say that the best debt is “no debt”.
Realize this: The programs that are mainstream and famous for delivering results are mostly good programs. They teach some universally good money concepts. But understand that in order to make them work “for the masses” on such a widespread basis, they have to be universally “generic“. What does that mean? They do not take your specific, unique circumstances and lifestyle into consideration in their regimen to get out of debt. They can’t. They’re made to be “one-size-fits-all”. Some people’s financial pictures (and lifestyles) are relatively simple, whereas other individuals have significantly more complicated situations. To be realistic, comparing the scenario of “a single mom with three kids and two jobs living in the high-cost area of Los Angeles, CA” with “a dual-income couple with no kids living in a low-cost area of Louisville, KY” is like comparing oranges and bananas. They have different needs. They have different resources. They have different time commitments. So, fitting them into the same debt payoff strategy with “step one, step two, step three, etc” is either going to over-stress the single mom’s situation or under-optimize the married couple’s results. It’s important to look at each scenario with the individual household’s picture in context with the solution.
Envelope budgeting is the process of putting cash in labeled envelopes to be used to pay bills each month. It’s a method taught by several programs to avoid using credit cards or overextending your household’s budget.
Credit cards can be used beneficially as a tool, or they can be used harmfully as an extension of your income. That’s the danger. So, when it comes to using credit cards to live beyond your means, we say “very bad idea.” But when it comes to using a credit card as a budgeting tool, then paying it off in-full before the due date so you use the bank’s money at zero-interest for a float period, while your money is earning interest in the bank… well, that’s a good thing.
The hard part is “staying out of the trap”, and our program helps you manage your money to do exactly that. Interest float is a key financial strategy to get ahead. You may have heard the term, “OPM”… (“Other People’s Money”). When you can take some simple steps to use OPM to pay your bills, setting up auto charges and auto payments to streamline your household cash flow, you don’t need to worry about using your credit card as an extension of your income— because you never actually touch it. You’re just using the bank’s money as a tool for yourself, at no cost to you, then automatically paying the bill in full each month.
In our courses, seminars, workshops, etc, PSG teaches about Debt Snowball and Debt Avalanche… but we don’t teach people to blindly use either one. Why? Neither one is optimal for getting you out of debt.
Those are just two examples. So our program addresses the actual costs of your debt in order to strategize and minimize the amount of interest you ultimately pay. Translated, we teach you how to keep the most money in your pocket and get out of debt the fastest way possible, taking your lifestyle and priorities into consideration. The software used by our PSG Certified Coaches provides a dashboard that shows you your progress along the way, so you have a 20/20 forward-looking vision in achieving debt freedom, rather than resorting to a cookie-cutter recipe (which is what Debt Snowball and Debt Avalanche ultimately are) and blissfully putting more money in your lenders‘ pockets.
Think of a GPS, for example. If you’re using a GPS to help you navigate, an algorithm checks to see what roads get you from point A to point B, then the GPS displays the path to your destination by choosing the most direct path. The GPS can get a little more sophisticated with a more complex set of algorithms that lets you choose between the most direct path based on shortest distance (a condition), or the fastest path based on shortest travel time using speed limit data for each segment (another condition). In order to do that, the GPS needs to measure mileage to determine distance, and it has to compare other paths based on speed limits for each stretch of road to determine shortest time. Sometimes a longer distance along the highway will be faster than a shorter distance on slower backroads.
People love to debate this one. One school of thought is to cancel the accounts altogether… You can’t go further into debt with them if they aren’t available. It reminds us of a bit of history, when in 1519 Hernán Cortés (the Spanish during the conquest of Mexico) ordered his ships burned and scuttled so that his men would have to “conquer or die”. This is kind of a “scorched earth” approach to eliminating future debt. It’s a bit drastic and dramatic, and quite frankly not very sensible for a number of reasons.
The other school of thought is to cut up your cards (or don’t carry them with you in your wallet), perhaps all but one or two in case of an emergency. If you don’t have them, they aren’t a temptation. You get the same effect as closing the accounts, but without burning bridges (or ships) in the process.
There will always be the “financial fanatic” who “drinks the Kool-Aid” and takes a die-hard, “all-in-or-bust” outlook on the topic. We’re not a good fit for that individual. In our opinion, burning bridges and destroying financial tools (and resources) lacks rationality, isn’t money-smart, and demonstrates short-sighted behavior. If they are closed-minded to that extent, they are likely not someone who will fare well with any program in the long-term. We’d rather not waste their time (or ours) trying to “push a rope” in teaching financial skills that are constantly opposed with, “Yeah, but…” arguments along the way. We wish them well, but we find extremism to be nonsensical when people are determined to paint themselves into a corner.
If anyone tells you that your credit score isn’t important, it’s time to talk to someone else. We understand that you need a good credit score if you intend to borrow money (go further into debt), but that’s not all it’s used for.
If you cancel all of your credit cards, your available credit resources (credit limits) go away. This causes your remaining debt to significantly spike your credit utilization ratio, and as a result, your lenders are likely to start raising interest rates, calling your loans as due-in-full, and all kinds of other nasty things that cost you more money, dramatically choke your household’s cash flow, and severely restrict your available options to use credit resources as a tool to get out of debt.
Although PSG is not a “credit repair” company, the concepts, practices, and strategies we teach will help you fix your credit score. The Financial Acumen Course has an entire lesson devoted to improving and maintaining your credit. If you follow the program, your credit should improve based on the minor adjustments you make to your money habits.
Using debt strategically as a resource is an advanced topic that involves significant risk. In his book, Rich Dad, Poor Dad, Robert Kiyosaki makes the point that the rich use “good” debt as a tool. The rich also use a lot of other tools, setting up corporations and tax shelters, as well as using bankruptcy as a tool. In fact, Robert Kiyosaki has filed corporate bankruptcy before. So has Donald Trump for that matter. And neither of them is eating a diet restricted to beans and rice, just trying to get by. In other words, corporate bankruptcy doesn’t mean you’re destitute. Often times the rich treat bankruptcy protection as a strategy, not as a failure. It’s different than personal bankruptcy. Yes, the rich use a lot of tools. But often times, to use the tools effectively to their advantage, they have to first be in a position where it’s actually feasible and realistic to do so. That’s not where most people start.
And that’s a loose parallel to the rift between the “get out of debt” people and the “good debt/bad debt” people. In reality, there has to be a balance throughout the process of getting out of debt and building wealth with tools. The problem in communication results when one side takes on a “scorched earth”, all-or-none approach to the exclusion of the other. Some of the financial improvement programs on the market today promote a disturbing cult-like behavior and following. It’s great to be sure of your course of action, but when a collective mindset takes on an “If you’re not with us, you’re against us” group-think mentality, the person with individual needs and unique circumstances either has to compromise their values to participate, or they get alienated from the group. Instilling that level of devout loyalty is great for the marketing success of the program… but it’s at the expense of the individual success of the person the program is intended to help. Finances are a personal thing, and each household’s individuality needs to be taken into consideration if a program is going to meet the individual’s needs.
When someone is “drowning” in debt, it’s not just the amount of debt or the interest rate that’s causing the urgency. It’s also the lack of cash flow, usually made worse by poor money habits. In order to get their head above water, it doesn’t serve them well to immerse them in tying up all of their money. They need to first work on freeing up some of their money to improve household cash flow. Otherwise, they’re in a very precarious situation, financially.
But then something like the COVID-19 Pandemic hits. The income earners find themselves jobless. Aside from a “nationwide toilet paper crisis”, now they’re faced with pulling money from their 401(k) with penalty charges or using their credit cards to go further into debt so they can pay their mortgage, feed the kids, and not have the electricity shut off. What was comfortably taken for granted just a few months ago is now a panic to not lose everything they’ve worked so hard to achieve.
So, at PSG, we look at the “good debt/bad debt” debate from two distinct vantage points. If you’re in debt with no solid retirement accumulation and thin cash flow, priority one is get-out-of-debt. Then later, once, you’re in a position to “gamble” your money in investments that may lose value, consider your options if you want to hedge a debt against an investment, as long as your foundation is secure and you can liquidate the debt with cash assets. In the meantime, we’d priorities building “equivalents” (which we discuss in 
Summing it up, we see it that no debt is really “good” debt. Some debts are just “less bad” than others. The best debt is “no debt”, and to achieve it by working with equivalent assets is the smartest way to accomplish that, in our opinion. The “debt-free” part of your plan makes unexpected “life happens” events an inconvenience, rather than a household financial crisis. The “equivalent asset” part of your plan allows you to create residual income streams for a secure retirement (even if you’re starting a little later in life), without having to sink your discretionary income into stocks, bonds, or other financial products. So, in a nutshell, with what we teach, it’s not a question of having to decide between “sending your discretionary income to debt” versus “investing it”. It’s not an either/or situation. Achieve both!
Maybe yes. Maybe no. It’s a “math and timing” question. First, find out about any “origination fees”, “closing costs”, or “points” that a refinance or consolidation loan might cost. Second, figure out the break-even point as to when those costs would be effectively liquidated by any savings in the new payment amount. Then, once you’ve done the math, decide whether the costs and time savings (if any) are worthwhile for the resulting household cash flow change.
Let’s start by saying, “we don’t know.” We need more information to be able to help you make that decision. Anyone who suggests a course of action without knowing your individual circumstances is not working with all the facts. Be careful about that if you’re asking around.
The idea of taking on a new job is in a completely different league than starting a business. They’re not even close. The level of commitment is different altogether. If you’re talking about a job, there are plenty of part-time or full-time options, some hourly, some salaried. If you’re talking about starting a business, that can range from a side-hustle of a few hundred dollars of income per week up to an enterprise that involves tens of thousands of dollars (or more) in income per week. So it’s not a “casual” question.
When people hear the term “home-based business”, it often conjures up a mental image of some kind of pyramid scheme or get-rich-quick scam. (Those exist, too, so you have to be careful doing your due diligence in researching any venture you embark upon). There are, however, hundreds of markets that can be legitimately served from a home-based environment. 
There are many benefits to working from home: autonomy, convenience, tax breaks, daycare cost savings, comparatively lower startup & operating costs, and flexible hours. On the flip side, there are several drawbacks: distractions, potentially limited technology and infrastructure, and perhaps some infringement on your “personal space” if you’re in a service-related field where you meet face-to-face with customers.
We’ll take it a step further… It’s a trained mindset of ownership and accountability. Whether you get that training from doing your own trial-and-error attempts and research, or you get that training from an experienced business success coach… or perhaps some combination, thereof… it’s important to realize that very few “wantrepreneurs” become successful entrepreneurs. Wishful thinking never got anyone paid. And in that regard, whether it’s a brick-and-mortar, online, or home-based business model, it makes no difference.
Consider this: A successful business is one that is able to best solve one (or more) problems that customers either can’t, don’t know how to, or don’t want to on their own. It’s that simple. Customers seek solutions to their problems in order to meet their needs. To be a true solution, it has to be a good product, great service, and it has to have exposure… so all of those answers play into the mix. To be the best solution, it has to be cost-effective… in other words, a worthwhile value to the customer for them to give it the time of day. Otherwise, the customer seeks their solution elsewhere.
Also too often, people seek solutions from companies that only offer “one-size-fits-all” products or services. If the only tool in their toolbox is a hammer, then every problem starts to look like a nail. At the end of the day, one-size-fits-all ends up being “one-size-fits-none“. When that happens, the company becomes agenda-driven in pursuit of profits rather than on truly meeting their customers’ needs.
It’s a key point that PSG Coaches have a wide and diversified array of solutions to offer, depending on the customers’ needs. Whether a product or a service, the right solution is often available from one or more various suppliers who are happy to profit-share with the coach if there is a good fit. The result is a win-win relationship amongst everyone involved. It keeps costs down, which improves value to customers. Customers’ needs are met, because our mission and vision remain client-centric. And the PSG Team gets paid by the supplier, rather than charging the customer for consultations and coaching services. Everyone stays happy, and the resulting synergy makes for one heck-of-a great business model. On the occasion (which does happen) where we don’t have the right solution for a customer, part of our standards-of-conduct are to tactfully “confess” that to the customer and potentially refer them to a more suitable alternative. We call that “integrity” in doing business. The customer always comes first.
The Prosperity Solutions Group’s® Life After Debt™ seminars and webinars get you thinking about your money in terms of strategies, habits, and spending trends. They also touch on adding income streams to your household cashflow as a means of paying down debt or creating a nest egg for retirement. The sessions are one-hour long and are always free as a matter of PSG policy. They’re a conceptual overview to explore potential debt payoff and wealth-building solutions.
