AND THAT’S HOW I GOT OUT OF DEBT

A couple of months ago, a friend of mine introduced me to cryptocurrency. I had heard so much about it, some people even called it the “New gold” and all that, but I never indulged. Being so broke at the time, I was desperate to make some extra money; this time, I indulged him, and listened to his less than one-hour crash course on cryptocurrency.

Within a matter of hours, I became a crypto middle man trader for him.

All was going well, and I was even making more than I anticipated. I contacted a lot of my friends who I knew traded Bitcoin and encouraged them to trade with me at very good rates. Some obliged, while some were skeptical because they were not very comfortable trading with middlemen, but all in all, things were beginning to look good.

Two months down the line and doing pretty well, I did a bad trade and after paying Bitcoins worth over $10,000 to this client, he disappeared with my money. At the time, $10,000 was worth ₦4.6 million😫

In the past two months, I had only made less than 100k as profit because I did small trades. This was my first big trade and just like that, I maxed out with debt of ₦4.6 million. There is nothing I dreaded more than being in debt. Owing can be really exhausting and mentally draining especially when your creditors are breathing down your neck for their money and it was beginning to take a toll on me and I knew I had to call an S.O.S. on my finances.

With all the determination to pay and walk freely, I decided to do what it takes to get out of the mess I found myself in.

Frankly, there are no right ways or secrets to getting out of debt but there are some requirements I did to help me walk away debt-free:

• I took a step back from everything that put me in debt: The first thing you want to do is avoid the trap that put you in debt in the first place. People get into debt for different reasons. School, job loss, medical bills, or if you’re like me, stupidity. But why you got into debt doesn’t really matter. What matters is that you don’t let it happen again! Here’s what not to do.

1. If you took out ₦500k in student loans for a bachelor’s degree, please don’t take out ₦100k more for a Master’s degree.
2. Did you fall into a pile of debt after losing your job? Resolve (once you get out of debt), to work on an emergency fund so this will never happen again.
3. Not that crypto trading is bad, it is very important to know your onions before you begin to take risks in any business. I had very little knowledge of the business or the risks involved and I went head-on, eventually sending my peace of mind crashing. It is advisable to do a risk assessment test before you plunge into any form of investment. So, taking a step back was the best thing for me.

• I did a debt ratio analysis: A debt ratio analysis is an expression of the relationship between an individual or a company’s total debt and assets. It is basically a measure of your ability to pay your debts. Inasmuch as I Loathed being in debt, I needed to come to terms with the fact that this wasn’t going away unless I confronted the problem. If your case is worse than mine and you owe from different sources, you need to tally up all your debts. It can be quite scary but it is necessary.

To calculate your debt ratio, divide your liabilities(debts) by the value of your assets (this could be salaries or properties). As at the time, I had a job at which I was earning about ₦80,000 monthly (assets) and had liabilities worth ₦4.6million.

This meant I had a high-risk debt ratio of 57.5%. This was just BAD!😨😨😨

But don’t fret, if yours is worse than mine, it just means you have a lot of work to do.

• Earn enough to get you out of debt: This right here is easier said than done. We hear it every day: “Live within your means”, “Spend less than you earn” because once we get accustomed to living a certain way, it’s incredibly difficult to change. If you want to get out of debt by yourself, you need to earn enough money to survive and enough to pay down your debts.

So, I took up a second job as a freelance writer for international companies who needed remote writing services, which racked up my income. I also began my journey as a property salesman for Rent-to-Own(RTO) by Onesqm. Currently in Nigeria, no mortgage or real estate firm offers anyone the kind of mortgage RTO provides.

They build and sell houses through off-plan properties which are obviously cheaper than buying completed properties, especially if they are located in prime locations (which they are😏), and you have a flexible and convenient payment plan (after your first equity contribution of course) to pay up your balance within 2–20 years.

Within my first six months, I was able to roll away my debts completely. Not everybody has to earn more money to get out of debt, but it makes it a lot easier.

• Be smart enough to ask for help: Working hard is one thing, but working smart is another. Getting out of debt on your own is a long and trying process, sometimes what you think you know just doesn’t work. That’s where getting a financial advisor can help you. In my confused state, I didn’t want to get myself into more trouble by acting irrationally so I decided to call my boss to tell him everything. He gave me this e-book to read called “Thrive”. You can get a free copy here.

This book is a comprehensive guide to attaining 100% financial freedom and by the time I was done reading it, I came to realize that getting out of debt is one thing and staying out of debt is another, which should be the ultimate goal.

To speak with a financial advisor when caught up in a mess such as this, you can call us on 08180000113