...No Promises... and No Gain Without Pain.. But, You Can Maintain Your Lifestyle While Destroying Debt..

Ever go on a diet? The diets I see all remind me of infomercials: namely, they all promise immediate results with no effort. Some are flat-out stupid. ("Take a pill and lose unwanted pounds while you sleep!") Others seem more reasonable.

Take the Atkins diet, which I've actually tried. You read the book, and good old Doc Atkins keeps repeating how you're going to be able to eat until you puke and still lose weight. And not just eat, either. You're going to be able to eat the stuff you love. Lobster, butter, steaks, eggs, cream, cheese, yada yada yada. Of course, there is one "tiny" catch. You can't eat bread, potatoes, fruit or anything with sugar in it. But who cares? As you're reading this book, you actually convince yourself that this is a diet that you can live with. In fact, it's going to be a riot! Who needs bread when I can eat steak every night? Who needs ice cream when I can eat a burger at midnight if I want? And the book is filled with quotes from people who have lost a million pounds while eating up a storm. So you get all fired up to lose some serious weight while stuffing your face with fat. But then comes the time when the book ends and the actual diet begins. About two weeks later you're ready to murder a bird for the breadcrumb in its beak. You're so sick of burgers and eggs that passing a farm is enough to make you retch and passing a bakery makes your mouth water like Pavlov's dog.

Bottom line? While it may work, it ain't as easy as it sounds, or more accurately, as the author promised. And what happens is you ultimately leave it behind. (But isn't that first breadstick the best you've ever had?)

What you're about to do is kind of like going on a diet, but I'm not going to be an infomercial and promise you gain without pain. What I will do is promise that we can minimize the pain. How? By maintaining your lifestyle and still finding extra money to erase your debts. When you go on a diet, you might substitute cottage cheese for meat. An alternative, but one that's hard to live with, much less enjoy. But when you go on a money diet, you can substitute a new $1,000 leather chair with a used $100 leather chair. Your fanny is still on leather, and the substitute is virtually identical to the original, at least after a few weeks. So, you tell me: would you really suffer if you sat on used leather instead of new? Would it really make your life that different? I don't think so. What you've just done is to free up $900 for debt reduction without negatively impacting your lifestyle one iota.

....Do You Ever Read the Labels? Well, start...

Stop reading this and go have a look in your medicine cabinet. If you happen to have some Excedrin (or any name brand pain reliever) on hand, you paid more than twice what the identical generic would have cost.

This is something that gives me a real pain. I've actually interviewed people in Walgreen's as they were picking up some name-brand aspirin and asked them why they were paying twice as much when inches away sat the identical product in generic form. (Notice here that I'm using the word "identical." Generic buffered aspirin isn't close to Bayer, or nearly as good as Bayer. It's identical! Read the label and you'll see for yourself.) The answers ranged from, "This is what I've always bought" to "Well, if it costs more, it must be better." If there's a greater testament to advertising than those statements, I can't imagine what it is. Judging by our actions, we're apparently so concerned with Tylenol's bottom line that we're willing to literally donate several dollars to the cause every time we buy a pain reliever! Do you really think that your headache will go away faster with a name brand simply because the TV said so? If so, wake up and smell the (generic) coffee. Then start reading some labels.

....Opportunity Cost and The Most Precious Commodity You've Got... Time

Let's both take a minute and take a glance around our respective rooms. (If you're not at home right now, imagine that you are.) Notice all the stuff in the room you're sitting in, and I'll do the same. Now, let's take one or two of these things and see what they're really costing us. Ready? I'll start. Right now, I'm sitting on a leather chair that costs $1,000. My wife bought it for me for my birthday. I know that's a lot for a chair, but it's really cool, and besides, I spend a lot of time here. (See how I'm justifying myself? And I don't even know you!) Anyway, if my chair was bought with credit, and paid for over time with minimum payments, how much did it cost? If you've been paying attention, you know that it could have cost up to $3,000: $1,000 for the chair and $2,000 for the credit card company. Happily, however, that isn't the case with my chair. (As you might imagine, we're not heavily into credit around here.) But it still cost me a lot more than $1,000. Because that money is no longer around to work for me. If it was, and I had invested it and earned 10% every year, 20 years from now, I'd have $6,727 instead of a worn-out chair.

My chair is a good example because it cost a nice round number, and one that you can use to help you do this same exercise in your home. In other words, if you paid $10 for some item in your room, multiply that $10 by 6.7, and you'll know how much you would have had if you had invested that $10 at 10% for 20 years. So, your $10 ashtray costs you $67. And that $3 pack of cigarettes you're filling it with costs you about $20.

What I'm describing here is a term that you might want to become acquainted with: opportunity cost. It simply describes how money you spend today costs you in terms of the opportunity to have more money tomorrow. And that cost isn't just measured in money. It's measured in something a lot more precious: time.