(This is the 2nd article in a series about “Gurus” — See Suze Orman’s story here.)
Dave’s story is very different from Suze’s. At the age of 26, Suze was struggling to save money as a waitress, while Dave, at the same age, was earning $250,000 a year and had about $4 million worth of real estate in his name, likely accompanied by about $3 million in debt used to purchase it. On the surface, he and his wife were living a life of material success, but the truth was that they too were struggling to keep up with their lifestyle and associated debt payments, and ultimately had to file for bankruptcy, losing almost everything. Dave puts the blame on himself, for being “stupid” enough to turn his life into a financial house of cards without truly understanding money. After pulling his family out of bankruptcy, he looked in the mirror and decided to help other people overcome financial stress as he had.
Dave’s Recommendation for Paying Off Debt
The core of Dave’s strategy, the “Debt Snowball Plan”, is to pay off your smallest debts first to achieve positive feedback and a sense of progress. He instructs people to clear all their debts (aside from first mortgage) by scaling back to the minimum payments allowed on each, and focusing firepower on the smallest to eliminate it quickly. Then, move on to the next biggest debt with the money that was freed up from the first chunk. Just like building a snowman, start with a small handful of snow and start rolling until you build momentum and can see your accomplishments. See our recommendation on the best way to pay off debt.