Download Your
Debt Free Plan


Keeping more money is the foundational step to living a 5 Day Weekend

To access, enter your book code:




How to Keep More Money Crush Your Loan Debt Once and For All

Debt. That great financial enemy we’d all love to defeat, that crushing burden we’re all trying to relieve. Most of us hate it, yet nearly everyone has it. People get in it, and are trying to get out of it.

People struggle to get out of debt for two primary reasons.

First, they don’t have a wise and coherent strategy for paying debt down. Many competing strategies exist, but people aren’t sure which one is the most effective. Second, no strategy addresses the underlying psychological reasons why people get into debt in the first place. And without addressing these reasons, they can never develop the discipline to get out and stay out of debt.

Are you up to challenge of crushing your debt? Good! When you are done reading this page you have a 4 step process for paying down loans, and a little insight into why you are in debt and what you can do about it.

The Best Way to Pay off Loans

Remember that your purpose in paying off debt is to free up cash flow that you can then use to invest in passive income vehicles. With that in mind, here’s the fastest, safest, and most sustainable way to become debt-free:

1. Build Savings First

It doesn’t make any sense to start making higher payments to reduce your debt before you have at least three months of income, and ideally six months, in a liquid savings account. This creates safety.

If you have no cash reserves, what happens when you pay down your loans but then experience an unexpected cash flow crunch? You simply increase your loan balances again or, even worse, miss payments and hurt your credit score, therefore get- ting charged more for future loans.

2. Restructure Your Loans

You can restructure your loans by rolling short-term, high-interest loans into long-term, low-interest, tax-deductible loans. The goal here is to minimize your payments and maximize your cash flow.

For example, if you have enough home equity, you can refi- nance your mortgage, which can be a tax-deductible loan, and roll as many of your non-deductible loans (credit cards, auto, etc.) into it as possible. This will typically lower your minimum monthly loan payments, and the tax deduction will also increase your cash flow. Then you can attack your remaining loans strategically, using your increased cash flow to eliminate one loan at a time.

3. Attack One Loan at a Time

After minimizing your payments and maximizing your cash flow, you’re now prepared to focus on one loan at a time until you’re completely debt-free. Most financial advisors and pundits will tell you to pay off your loans with the highest interest rates first. We encourage you to ignore the interest rate and use a technique developed by Garrett and his team called the Cash Flow Index, which helps you determine which loan to pay off first.

To determine your Cash Flow Index for each loan, divide the loan balance by the minimum monthly payment. A low Cash Flow Index means the loan is inefficient. A loan with a high Cash Flow Index is efficient. As you can see on the chart below, any loan with a Cash Flow Index between 0 and 50 is in the danger zone and should be restructured or eliminated as quickly as possible. Any loan with a Cash Flow Index greater than 100 is in the freedom zone and is not a priority to pay off.

The loan to pay off first is the one with the lowest Cash Flow Index. For example, consider the following loans and ask yourself which one you would pay off first:

4. Be Cautious About Locking Money in an Asset

Paying extra money to your mortgage can sometimes make sense when you’re financially stable, but other times it’s just locking money into hard-to-access equity. This strategy isn’t just about paying off debt faster and saving money on interest. It’s also about reducing your risk.

A good rule here is to only put extra money into debt where your minimum payment goes down as your balance goes down, such as with a credit card. Otherwise, you’re worsening your Cash Flow Index with every payment. It doesn’t give you immediate benefit, and it increases your risk by reducing your liquidity.

A better move is to save the money that you would have paid on the loan balance in a separate account. Then let it accumulate and earn interest until you have enough to pay off the loan in full. (For more details on this, see chapters 8 and 9 for the strategy for creating and capturing wealth.)

Why You’re In Debt

Now let’s tackle the second reason why people struggle with debt. They don’t understand why they are in debt in the first place.

You see, without a fundamental change in consciousness regarding debt, no strategy alone will work long-term. For lasting results, identify and solve the root causes of debt, rather than hacking at the by-products (interest and bondage).

Before you employ the techniques above, ask yourself:

  • Why did I incur each of my debts? What was the purpose?
  • Was my desire to consume or to produce?
  • Could I have waited six months? A year?
  • When I’ve incurred debt, how did I justify it?
  • Do I seek consolation in material things?
  • Was my debt caused by investments I made that were actually more like gambling — putting money into things I didn’t understand and couldn’t control? If so, what can I learn from this and how can I be wiser in the future?
  • Was the debt due to a lack of preparation? Or a financial surprise from which I can protect myself in the future?

Getting and staying out of debt requires a fundamental shift. A simple guide moving forward: Never borrow to consume. Use cash for consumer items, such as furniture, clothing, and vacations, and only borrow for productive assets and resources.

Getting your financial house in order is about much more than the technicalities of finance. It’s about your mindset and psychology. It’s about your willpower to defer immediate gratifi- cation in favor of long-term freedom. It’s about seeing and cul-tivating a vision beyond working 9 to 5 for the rest of your life. You extend your runway in life and expand your bandwidth.

As you crush your debt, you will free up more cash flow that can be used to fund your investments.

Additional Strategies to Keep More Money

In 5 Day Weekend Nik and Garrett share numerous tips and methods for hanging on to more of your money. You will learn:

  • 1)How to Manage Your Expenses by understanding debt vs. Liabilities.
  • 2)How to cut one type of expense while maintaining your current lifestyle.
  • 3)How to boost your credit score so you can save on interest rates.
  • 4)Tactics for restructuring your loans.
  • 5)How to restructure your insurance policies that are leaking cash.
  • 6)How you can save on Taxes with little known tax provisions.
  • 7)How to analyze your investments for hidden fees.
  • 8)How to become a money master so it works for you, rather than the other way around.
  • 9)How to set up a Wealth Capture Account and how to use it save money.
  • 10)How to set up and use a Living Wealthy account to manages expenses and increase savings
  • 11)How to think like the rich and grow rich by using the Rockefeller Method.

Keeping more money is the foundational step to living a 5 Day Weekend, and you can find all these methods outlined in the book 5 Day Weekend.