D.E.B.I.T.S: How To Find Money In Your Life You Didn’t Even Know Was There


If you look closely at the WealthBuilders logo you will see that it consists of three sections: a Foundation, the In-fill of the 7 pillars, and a roof.

In the foundation element, where we help you try to create wealth, we’re looking really hard at what you already have in your financial life, and we begin that process with something we call D.E.B.I.T.S.

Each one of those letters stands for a part of your finances that we’ll take a look at to try and help you find money that you didn’t realise was there. And when you discover money that you didn’t realise was there it can be like plugging a leak. And then when you take that money and make it work for you, you’re essentially creating money out of thin air.

Let’s take a closer look at what D.E.B.I.T.S stands for.

The first letter D stands for Debt. And debt is a real challenge in life because you’re really paying someone else, and anything you spend on debt means the cost of what you’ve bought has gone up, which means that money’s then going out of your life, which you can’t use to accumulate wealth. In this post I’m not going to talk about the difference between good debt and bad debt. We’re going to focus on the following two key areas:

1) Consumer debt. Credit card debt, personal loans, those sorts of things. Let’s look first at credit card debt, as most people have got a credit card, and unfortunately the very, very high cost of credit card debt is really sucking money out of people’s lives. There is a very clearly structured way (we call marshalling the forces) which shows you how you can structure each individual card – and if you have a number of cards, this will help you to massively accelerate the pace of reduction so that the credit cards are gone from your life, and then you’re living a WealthBuilding life of accumulating assets, not building liabilities.

2) Mortgages. Most people will have a mortgage at some point in their life, so think about the ways that you can reduce the overall cost of a mortgage. If you ever looked at a mortgage statement, on the very last page it says, “The total cost of this debt is …” and it’s always (at least if you live in London like I do) hundreds and hundreds of thousands. So anything that can focus your mind on reducing the overall cost of that debt, then it will inevitably save you money to build more wealth as well.

Now, there are a number of ways to do that and of course one of those is keep a constant vigil on interest rates, and there’s no shortage of good mortgage brokers out there who can help you do that so that every time you’re coming to the end of one rate, you’re already looking for the next one. In the same way as you might do with insurance and so forth. And while it’s true to say that debt can be a challenge, let’s take heart and realise that WealthBuilders has a process no matter what level of debt you have, wherever it comes from.

There is a genuine process to help you both eliminate debt but at the same time build wealth. So you can do both at the same time. One will not hold you back and hold you in inertia, and we will definitely show you a process that will help you move forward at the same time.

The second area that we want to focus on is E, and E stands for Education. Now, it’s true to say that we are all aware that education costs money whether it’s education for school or university these days, and people also spend money on education at work.

However, your WealthBuilding education is really important too: but we want to give you a message which is really important to take on board. WealthBuilders is a genuine community, and we’re very much (if you remember our values) about sharing information and knowledge with others both ahead of you and behind you. We’ve got many, many ways we can show you how to participate in some education either at a lower cost, or a fraction of the cost, and indeed sometimes we can even show you ways by using leverage of something you already have (for example, your pension).

You can get education genuinely for free. Now if you can do those things I’ve just described, then more of your money’s going be available to start building assets and building wealth, and less of your money is just going to be spent with people who perhaps just want to make money from that education, rather than genuinely being on your side to try and help you build wealth for yourself.

Now the third area was B for Bills. Now we’ve all got bills, we know that. But isn’t it often the case that we can take the bills that we have for granted? We encourage you to have a process, which is to at least once a year get into the habit of looking at all of the bills that you have and getting your highlighter pen out and looking for things that you don’t really need any more. We all have those!

As soon as you eliminate things you don’t need any more, whether it’s a membership that you’re not using or it’s a bill that you could get a lower cost. If you look at all the consumer websites these days to reduce the cost of utilities and insurance of all kinds, then you’re in a much better place to be able to count the money that you save. Then instead of just banking that money and leaving it in your bank account, use that money and allocate that towards WealthBuilding.

Now the I stands for Insurance. We all know that insurance is important in life. But it really should be important for those things that would be disastrous if you lost them. So, it’s really important to insure your home, of course. And it’s really important to insure your life if you’ve got debt and those sorts of things (and we talked earlier on about the importance of eliminating debt). 

Side Note: It’s possible that while you’re eliminating your debt you can also reduce your insurance at the same time, so that you make your insurance fit your real situation rather than assuming that the insurance you buy is set for the next 10, 15, or 20 years.

Also on the subject of life insurance, if you’re a business owner (as many of our clients are), did you realise it’s possible to get tax relief on this? You can actually have the government paying you to be insured, because they want you to be a responsible business owner. And that tax relief will reduce the premium. And if that reduces the premium, it puts more money in your account. Pretty neat, huh?

There are other aspects of, let’s say, less important insurance. Sometimes we overlook that or we may buy things, and insure things that perhaps not important. Are you insuring your iPhone, or are you insuring the washing machine, or even something you didn’t even realise you’d bought?

The next section is really important one. It’s the T for Tax. Now, tax affects us in every aspect of life, and there’s no escaping it. In fact, if you look online, an organisation called the Adam Smith Institute, they have something they produce every year, it’s called Tax Freedom Day. Tax Freedom Day is the day at which you actually stop paying your taxes, and you start earning money for yourself. And that day in 2018 was May 29th! So if you’ve got a job, you’re working until May 29th before any penny is effectively your own – and that’s because there are so many taxes in the UK: income tax, capital gains tax, VAT, stamp duty land tax …you can just keep going. In fact, you could have fun trying to work out how many taxes there are.

But it wouldn’t be lost on you to realise that here at WealthBuilders we’ve got all the tax strategies in place to help you minimise your tax costs.

Whatever aspect of your work, whether you’re in a job (which is where the highest taxes are paid of course) or if you’re self-employed – or you have a business, there are many ways where you can reduce tax. And if you can do so legitimately and claim tax relief back, in other words get money paid into your account from the government instead of paying it, they’re paying you …then that’s pretty neat. So, having a good solid tax strategy and working with people who know how to find these things (we have all of those as part of our own partner community here at WealthBuilders), we’re certain to be able to help you save tax pretty much in every single case.

And the final section in this foundation element of D.E.B.I.T.S is S for Support-costs. Well, what does that mean?

Well, wherever you’re building wealth already, I’m assuming you’re paying somebody for the privilege of you delegating that task to them. And in my experience with investments or pensions, there are a number of people being paid, and I’m not saying they shouldn’t be paid. I’m saying make sure you get real value for money and if possible you can drive the costs of those services down.

So for example if you look at IFA costs, costs of having the custodian, the wrapper, the box in which you’re holding your investments in: fund manager costs – there are many ways you can buy very low-cost tracker funds or even things known as ETFs or (exchange-traded funds) where the cost of buying into investments is a fraction of the cost of paying for a fund manager.

And, if you’ve got an advisor, are you sure you’re getting real value? Have they plugged a siphon into your life and taken money out, or are they giving you real value for money back? Well, that’s for you to determine. We’ve got a whole checklist and a process that will help you work out whether you’re getting real value from the people you’re delegating the task of helping you build your wealth.

If you can reduce those costs once again, then that puts more money in your life for you to build wealth separately, and maybe you save those costs not just now, but for the rest of your life, and then you teach your kids for the rest of their lives – so the cost for the family is reduced forever.

And that’s a real good thing to want to do.