Now that we have talked about basic skills and learned to move our set point, it is time to get down to laying out the strategies we will use for making change in our lives. It’s important to realize that different readers will be at different points along the financial spectrum: A reader who is very well off may not need to worry about radical debt strategies; similarly, a person who is on the verge of bankruptcy and having trouble keeping a roof over his or her head should not yet be thinking about long-term investments and acquiring assets. But no matter what your personal situation, I urge you to read through each section so that you can grasp the strategies and get a feel for how the sorcery hinges upon them.
Let’s start from the ground up and assume that you, the reader, are exactly where a large percent of Americans are right now: deep in debt.
If some of the following material seems obvious to you, I commend you on your financial prowess. I only ask that you suffer through it because I know from feedback from students that a lot of people do not know these things and are in desperate need of this type of strategy. And even when you know the basics of a principle, it sometimes helps to have it all spelled out. The world changes radically and today’s real estate mogul could easily be tomorrows pizza delivery guy.
The Debt Prison
Debt makes all the difference in financial health. Even if you earn income at just a hair above the poverty line, you can still build real wealth if you manage to live without debt. Conversely, it is also possible to have an income in the millions and lose it all in a flash if you are living beyond your means. It all comes down to those two piles of money I talked about in The Sorcerer’s Secrets: The one coming in has to be bigger than the one going out, or, eventually, no matter how tricky your math, you will be screwed. Duh.
Unfortunately, it seems that this simple lesson is lost on more of us than not. Annie Leibovitz, MC Hammer, Nicholas Cage, Ed McMahon, Don Johnson, and Charlie Sheen are all on the list of rich and famous people who lost everything because they had more debt than income. I myself have been in debt, and I am willing to bet that some of you are carrying more than a healthy amount of debt as well.
Thankfully, sorcery can help, especially if we have a strategy. I break it down into eight steps.
Step 1: Assess Where You Are
Before we can do anything to advance ourselves from our current position, we have to know where we are. In other strategies I treat this more or less as a given, but not in debt magic. Debt is usually created and perpetuated by people who haven’t a clue about where they are. I have never met anyone in significant and long-term debt who had a clear picture Vble wer’of what they earned or what they spent. Not one. That includes me when I had those issues myself.
I am going to speak frankly here: In most cases the ignorance is purposeful. People in debt are not stupid. People in debt are overwhelmed. Bills remain unopened because you know you can’t pay them and looking at the actual number is just too depressing. Bank accounts get overdrawn regularly because actually looking at the balance before using the debit card can be just as bad. Taxes, utility bills, and credit cards are all subjects too daunting to deal with today, so you tell yourself you will cope with it another day. Today you will ignore the calls and leave the enveloped unopened. The day you actually deal with it, of course, never comes.
If this person I am describing is you, I want today to be the day that you deal with it. Today you are going to suck it up and deal. This very night I want you to open your bills, look at your paychecks, and gather as much info as you possibly can about the money you have going out and the money you have coming in. Get a real idea of where your money goes.
Start with the monthly bills that should be easy to look up. This includes:
Telephones (all of them)
After you get all this together, examine how much you spend on incidentals in the next few days. Keep every receipt for things such as:
Entertainment of any kind
Personal care and grooming
Magic books and supplies
Now it’s time to measure this against the money you earn. First take a look at what you have:
Cash in your wallet
Money owed to you
Then look at income:
Assets (yields on investments, payments from businesses owned, etc.)
If you are like most people, you will be surprised by the numbers—especially those going out. Even if you are not in debt, this exercise is worth doing every now and then. I am not in any particularly drastic debt at the moment, but I figured I would check out how much I spend at Starbucks: about $150 a month, or $1,800 a year. I am okay with that for now; I make enough to indulge myself. If I were deep in debt, however, that would be one of the first things cut out. As it is, the realization made me take the time to get a Starbucks gold card so that at least I get a free drink every few weeks.
Step 2: Macro-Enchantment
Now that you know where you are and where you need to be, you can perform your macro-enchantment to help you get there. A macro-enchantment is an overall spell or ritual that is done simply to get what you want—in this case, to be debt free. This is in contrast to micro-enchantment, which we will talk about shortly. Macro-enchantment is the only type of magic that most people do: one spell to achieve an end. It can take many forms; appeals to saints, gods, and other figures are popular. Invocations of the Holy Guardian Angel (HGA) or personal Genius are particularly effective in this type of work. Candle magic spells, evocations, and even mojo bags and talismans can help anchor a ritual.
Whatever it is that you are doing for your ritual, I strongly recommend picking something that is short enough that you can make a daily practice out of it, so that it reinforces your daily efforts. One simple prayer made popular by Bruce Wilkinson is the Prayer of Jabez.
The prayer is simple:
Oh that Thou wouldst bless me indeed, and enlarge my coast, and that thine hand might be with me, and that Thou wouldst keep me from evil, that it may not grieve me!
You could even change the word evil to debt. This simple prayer is so potent because it takes divinity and places it squarely in the center of our material lives—precisely what strategic sorcery is all about.
Step 3: Instituting Discipline
With your macro-enchantment taken care of, now it’s time to focus on developing the discipline you have been lacking. You will need to constantly remind yourself to act according to your will and not your whim. Specifically, you need to stop bleeding money. To do this you need to take a hard look at the assessment you did and isolate expenses for shelter and food. Unless you are moving, your shelter should be easy enough to figure: It costs what it costs. Some of you may be in situations in which you bought more house than you could afford and there is no way you can continue on. In those cases you will need to explore your options for moving to a new living situation. Otherwise I just set that money aside every month and move on.
Food is another matter. If you have been eating out a lot, it’s time to eat in. If you have been eating in, but spending as much as you would eating out (or more), it’s time to learn to spend frugally. This might be a great thing for your body: an opportunity to cut out fatty foods and greasy snacks and such. Sadly, some people do the opposite to [e ond save money: Substances that pass for food on value menus at fast-food chains can seem like the most economic option, but they’re not. If you are going to solve your problems you will need to be healthy.
Other people eat on the other end of the spectrum, doing their food shopping at Whole Foods and artisanal farmer’s markets. Unfortunately, as the Michael Pollans and Alice Waterses of the world increase awareness of such fare, the prices keep going up and up, meaning that eating local and organic artisanal foods is increasingly an option of the rich—which, if you are in debt, isn’t you. I am not suggesting that you eat junk, only that you find things at a regular food store that are relatively healthy and save the $9 Whole Foods salsa and $5 loaf of organic cinnamon bread from the farmers market for when you get out of debt. As inspiration I often think of Evan Lansing, a blogger who lived for a month on just $30. If he can do that, you can at least manage to cut your food budget in half for as long it takes to make a dent in your debt.
Other than these necessities, you need to figure out the bare minimum that you can live on, and then really live on it. Get inventive about it and challenge yourself. Figure out what gives you the best bang for the buck.
Do not just make the mistake of cutting everything you possibly can, though, because you will not be able to sustain it. Instead, look for the things that give significant enjoyment for relatively small amounts of money. Strangely, some books identify computers and Internet access as expenses to cut, but that just shows the age of the person writing. In reality, your computer and Internet connection probably provide you the biggest possible entertainment bang for your buck. In fact, if you are using your computer wisely you can get rid of the television, newspaper, books, and even house phones. If you went out and bought the best PC you could afford, supplemented it with a high-speed Internet connection, and then cut all the services and products that you could get via the Internet instead, you would probably save money month to month.
Here are a few Do’s and Don’ts.
DO go to the library and check out books.
DO NOT buy more books. (I am aware of how hypocritical this is in a book that you probably purchased.)
DO work out at home or outside, even if you have to buy some cheap weights to do it.
DO NOT join a gym. If you belong to one, cancel ASAP. It’s a money suck.
DO invite people over and entertain with pot lucks and parties.
DO NOT go out to dinners with friends more than once a month.
DO join Netflix or another similar service if you like movies.
DO NOT purchase DVDs or Blu-Rays.
DO purchase yourself something new that you really want once a month as a treat.
DO NOT buy many small things that are on sale because you are “saving money by buying it on sale.”
In the past when I have suggested these things to people, they have alway [ey 20;saving s balked, as if following these guidelines would ruin their lives. If you are thinking along similar lines, there are three important things to keep in mind:
1. These are not permanent changes. They are changes to make until you are out of debt, at which point you may go ahead and reintroduce some luxuries.
2. You will find that your enjoyment of life doesn’t hinge as much on anything outside of yourself as you thought it did. In the end you will be stronger and better in ways that have nothing to do with money. I guarantee it.
3. When you pay off a debt, it is like getting a raise. This very month I paid off cars that my wife and I purchased new. Suddenly we have 700 more dollars in the monthly budget, which is really nice.
Macro-enchantment is used for the overall effort of getting rid of debt; then, micro-enchantment is applied to individual steps in a strategy to ensure success. As for magical support for your discipline, make yourself a mojo bag for debt killing: High John for self-mastery, cinnamon for drawing money, and sassafras root or leaves for holding on to that money. You can embellish it as you will: slippery elm to aid in talking with creditors, cinnamon bark for bringing money, cascara and galangal for sorting out lawsuits, master of the woods for self-control. Use your imagination and ask for guidance.
Don’t forget the Lightning Glyphs. Using the glyphs for financial discipline, reversing bad luck, and holding money can do wonders. You can visualize them in your aura, consecrate seals with them, or work them into a mojo bag.
Most important of all, meditate. You will constantly need to force your mind to recognize the whims of the moment as distractions from your true will. Sorcery will help in your efforts, but ultimately the efforts must be your own.
Step 4: Dealing With Credit Cards
This step may seem very similar to the previous one, but I separate this out as a step of its own because it presents some different challenges. I will be blunt: credit card companies are evil. They could hardly be more so if they were staffed by actual demons. In the old days you used to have to work up to getting a credit card. They would only give you a credit card if they thought that you would use it wisely and pay your bills. Somehow, in the early 1990s, the model changed. They figured out they made more from fees than from actual business, so they started giving cards away to anyone and everyone, specifically targeting people whom they knew would not or could not pay. This includes college students, the elderly, the poor, and people already in debt. In short, if you are using a shovel to dig yourself into a hole, a credit card company will be happy to give you a backhoe.
Most people who are in debt make their regular minimum credit card payments. Some people who are just starting to claw their way out of debt feel that this is what they should be doing: paying what the company says that they owe, even taking pride in being able to handle that. If you have a high balance and are in debt, you will never get out of debt by paying the minimum, and you will end up paying more in the end than you ever dreamed!
Let’s say you have a balance of $5,000 with 17 percent interest. Your credit card minimums are typically 3 percent of your balance. Paying only the minimum every month, which is $150 for this month, it will take you 13 years and two months to pay it off! Worse than that, the final amount that you pay will be $9,031! You will pay an extra $4,031 on that $5,000 just for the pleasure of having Visa hold your debt for you.
If, however, you could squeeze $300 from your budget every month you can have it paid off in 20 months and pay only $700 in interest. Big difference, ri [iffal busight? Then you are done. It’s over. Best yet, once you are done, you can apply that $300 that you are already budgeting for to other debts, making even larger payments. This is how you work up to paying off the really big debts like student loans and mortgages.
If you have heavy credit card debt, go to an online credit card calculator and figure out how much you can pay and how long it will take. Then find a low-interest card to transfer the balance to and get it done. You can use these same calculators to figure out car payments and home mortgages. The same dynamics apply.
With all that said, I am not advocating your getting rid of your credit cards entirely. You need them for emergencies, for car rentals, and for a bunch of other activities. What I am advocating is that you stop using them for anything other than emergencies for now, and that you pay them off quickly. They are a necessary evil, but you should never forget that they are still an evil. It is easy to get right back into debt if you are not careful.
Step 5: Creditors
If you are deep enough in debt that you have stopped paying your bills and have people calling your house, this step is really very simple. After you have completed Step 1 through Step 3 you should have a good idea what shape your finances are in. All you need to do now is pick up the phone and talk to the creditors who are calling you.
One by one, talk to your callers and set up a plan that you can actually stick to. It’s amazing how nice they can be when you make even the smallest effort. That goes for the IRS as well. I have had to deal with the IRS three times in my life: twice for me and once for my parents’ business. Each time they were very understanding and easy to make a plan with. You tell them what you can do, and chances are they will agree to it.
Try to avoid third-party companies that make it seem as though they will do everything for you. Their ads suggest that they can reduce your debt to almost nothing, and when you are desperate and overwhelmed this can seem like a good idea. It is almost always not a good idea. They can rarely reduce your debt to less than you can on your own, and the fees that they charge will usually make up for the difference, leaving you just as stuck as before.
Micro-enchantments can be very important at this stage, and any type of influencing magic you know can be applied against your creditors. I recommend bringing their corporate logos to your money altar and placing them under the state or picture of a great power. The seal of Saturn is excellent for this. If you are having a lot of trouble you can bind the paperwork up and place it in a master root. Another thing you can do is dress it with Bend Over oil and place the logo in your shoe so that you are stepping all over your creditors. Reading the influencing chapter of The Sorcerer’s Secrets will give you a lot of ideas on how to employ conversational magic and more advanced influencing techniques.
If things are so bad that bankruptcy seems to be the only option, all I can tell you is to speak to a couple of lawyers. Don’t take the step lightly; bankruptcy is not the panacea that it used to be. Thanks to the Bankruptcy Abuse Protection legislation from 2005, there is a lot that it won’t cover anymore, and the damage it does to your credit is harder to repair than you think.
Step 6: Credit Reports
Now that you have handled the people who are knocking down your door, you need to check your credit report so that you can find out if you owe anybody anything else, and make sure that there are no companies reporting on you in error—which happens more often than you would think.
Put the stupid commercials out of your mind, though: You do not need to go to FreeCreditReport.com or some other outfit and pay them money. The AnnualCreditReport.com Website was set up to comply with the Fair and Accurate Credit Transactions (FACT) Act, legislation that requires the credit bureaus to provide consumers with a copy of their credit report once per year. It is the only official site where you can get a free copy of your credit report from the three major credit bureaus, Experian, TransUnion, and Equifax. Again, it’s free once a year. Use it once a year. Find out if there are any mistakes, and if there are, contact the company and fix them.
Step 7: Spending Wisely
The last step of any debt strategy isn’t about saving money, but about spending it. In the early stages of debt-killing you will not have a lot of money to play with. What you have must be spent judiciously. You will shop with a list and learn to stick to it. You will learn how to resist impulse purchases and notice how, a couple of hours or days later, you feel as though you didn’t really need the item that badly after all.
As your debt starts to disappear you will have more and more money each week. The trick is not falling back into old habits. Continue to wait and evaluate whether you really want or need something. Think about the real pleasure it will give you and yours.
More than that, learn what money saved and invested can build up to. Things that you would ordinarily whip a credit card out for, like a computer or even a car, can be saved for and purchased without spending a nickel in interest more than you have to. Education and training also become possible when you have the ability to hold on to money and do something productive with it. The rest of the chapters in this book will help with this.
References and Resources
You’re Broke Because You Want to Be: How to Stop Getting By and Start Getting Ahead, by Larry Winget (Gotham, December 27, 2007). Solid and simple book on digging your way out of debt.
Credit Card Calculator: www.creditcards.com/calculators/. This Website has a host of different calculators to help you get a handle on how and when you will have credit cards paid off. Knowing the reality is the first step to facing it.
Annual Credit Report: www.annualcreditreport.com. This is the official site for getting a free report from Equifax, TransUnion, and Experian once a year. Do not be fooled by imitators that ask you to pay money for the same service.
The Simple Dollar: http://thesimpledollar.com. Blog dedicated to simple financial wisdom that most people can follow. The blog specializes in ways to save money. Some are a little extreme, but all are worth a look.