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Video transcript of the exclusive interview

You can also have a look at the video transcript of the exclusive interview between Gerri Detweiler and Steve Rhode.

Gerri: Hi, I am Gerri Detweiler. I am doing a video blog for debtconsolidationcare.com.
Today I am interviewing Steve Rhode. Steve Rhode is the 'Get Out of Debt Guy'. I met Steve over a decade ago when he was starting what would go on to become one of the most successful credit counseling agencies in the country. Now he helps people through his website "getoutofdebt.org". Thanks Steve for joining me.

Steve Rhode: Hey Gerri, it is my pleasure and you know what, it has been over a decade, in fact it is probably been 15 years!

Gerri: Oh! Don't reveal it, come on! Can I edit that out. (chuckle)

Well Steve, one of the things that I have always admired about you is that you really tell like it is. Today I am going talk about one of your post. You have a post called "unvarnished truth about getting out of debt" and I am going to talk about that post because it is pretty provocative and I know that for most people debt is extremely agonizing, and a lot of moral and unethical issues come into play. But you say debt is just debt – Explain what you mean.

Steve: Well, people attach all sorts of meanings to their financial problems. They think that they are somehow losers or failures and they make bad decisions based upon what they think other people will think about it. Another thing I find ironic is in the business world, things like bankruptcies are applauded and rewarded on the Wall Street as they are appropriate and logical action that a company should take. Yet, when it comes to personal finances, consumers are easily manipulated and fooled into taking other actions, not because it is in their interests but it is in the interest of the companies that selling what ever it is.

Gerri: You know one of the comments I often hear is that Steve when I am talking about the creditors group or even in the news media is that, they'll say - "wow! people don’t pay their bills and hurt all of us'. So, what you say to that argument?

Steve: Well, I say that the creditor is being hurt because some people aren’t paying, some can’t afford to pay and then the price of the product are co-related because the product needs to be sold and this is always the way it has been. A creditor needs to price a credit product and so they included an appropriate amount of loss and they know what those losses are and that what facts the interest rate. Interest rate is actually a calculation that involves the cost of money, profit and the approximate losses. Now the people you are talking about here, who should consider bankruptcy, who need to take a good, honest, unvarnished look at the situation are people who otherwise don't have a solution to their debt because these are the folks who are draining their retirement plans just to make few more months payment.

Gerri: Well, I think that you’re referring to a post about the ultimate sin that tempts us when we are getting out of debt - Explain what you mean by that.

Steve: Well, people are afraid of the collection company calling, they are afraid what the collector might think of them, they are afraid of what their neighbors might think of them if they had financial problems and so because of that emotional fear, what they wind up doing – is draining their eye arrays, draining their retirement money in order to not satisfy debt but continue making payments and the only thing that happens then is you’re out of money but you’re not out of debt.

Gerri: Yeah, I have seen so that many times, so many consumers wind up in bankruptcy any way and at least they would have the money they really desperately for retirement had they gotten help for that situation sooner.

Steve: Well that money is money that is saved for when you're least likely to be able to earn. So, when you make nature of reaction and you blow through that money now when you’re 40 or 50 or 60, you’re not going to be able to easily replace that money and then the only thing that is going to happen is when you get old enough where you can't work, you know what you're going to do? You don't have the money any more and I'm afraid for some people it is going to be really tough times.

Gerri: Yeah, I agree. So, what you would say to someone who is conversing with you through your website. For example: He is saying "I am really struggling and I want to do the right thing but I am having a hard time paying my bills" – What you say to those folks?

Steve: Well, The first thing I ask is this - "Do you have a greater responsibility to repair the past or to fix the future? Because it is one thing to want to repair your debts because you feel like you've the moral, religious, ethical opportunities, so, but you also need to consider the implications and sacrifices that are going to be created in future to go down that path. For example: I and you, we both have seen these examples. Somebody, who decides that they're going to repay their debts at all costs and in doing that they're just living a barely month-to-month, they can’t afford to save, there are no emergency fund, they are living in an area which is not very safe and the whole reason they are doing this, is because they want to repair their past. So, let’s go to the basics first. What is the goal you want to achieve? That is always my first question.

Gerri: Okay, and then after you look at the goal you want to achieve, then, beyond getting out of debt, I imagine for other people it feels pretty bleak like “I am never going to have a future”.

Steve: Well, it does feel bleak. I filed bankruptcy myself in 1990 and it sucks. But, the bottom line to it is, is it appropriate for you? Do you want to get storm down a path that is not appropriate for you and lose more money and more time or you want to start your life over menially. Now, for example, let’s say you engage in some solutions that take you years down the road and you’re still working on repairing your debt. Now, if you had actually considered bankruptcy and gone bankrupt now, most people or 75% of people qualify for Chapter 7 bankruptcy and their debt is eliminated within few months and they can begin to repair their credit immediately. Now, some people say, you know "I am a loser, I filed bankruptcy". And I have to be honest that at one point in my life, I actually felt that too.

But, more I looked into it and more situations I saw, I realized 2 things – I realized number 1 – if business can be rewarded for bankruptcy and it is the appropriate thing for them, why isn’t for the consumers? And the number two, I realized the way I was feeling, it was about my internal feeling and not about the world. Now, I went bankrupt in 1990. I told you that. I have told the world. I told over the years. But for 10 years or so, I didn't tell the world. I was ashamed how people will think and you know what, not only did I tell my friends I have gone bankrupt but it is all over the web, the newspapers, everybody knows it, u know what, my life is not changed one bit. (Smile). So, it doesn’t take you down the dark path but what does take you down the dark path is falling for false debt relief promises, falling for these incredible benefits - "We'll get you out of debt in 12 months or "Sign up now and we'll invalidate your credit contacts" or "Sign up now and pay $9000, we’ll teach you how to trip up the debt collectors, how to sue them and eliminate your debt. These are all, almost all; unequivocally these are all scams that will separate you from your remaining money.

Gerri: Yeah, and unfortunately, it is all too common today.

Steve: Yeah, and you know, the bankruptcy attorneys is like "don't buy". And even if you decide, even if you say I am never filing bankruptcy, you owe to yourself and you owe to your family to go and talk to a bankruptcy attorney and find out the facts. Is there making assumptions and judgments, find out the facts, sleep on it, and then think about whether or not bankruptcy is appropriate for you. The thing I was here to tell you is that "if I am go bankrupt, I am not going to get credit for 10 years, I will never get credit again, I'll never be able to buy a house or a car", and that is simply not true.

Gerri: Yeah

Steve: You can get, in fact if you do a Chapter 7 bankruptcy, you'll get discharge notice in a few months and very shortly thereafter, I mean within weeks, you'll start to get new credit offers. And it is easy to rebuild your credit and once you rebuild your credit, once your debt is gone, and you're able to save again, you've the down payment, you can buy a house, a car. It is not the stigma that we hear and the people who are promoting that stigma are technically debt collectors who are trying to manipulate you in the plain and our own fear based upon what the people say, rather than what they do.

Gerri: Yeah

Steve: Well, Steve, like I said, you always say like what it is and I really appreciate your time today and any one who is watching, make sure you check out Steve posts at "getoutofdebt.org" to know more about unvarnished truth about getting out of debt in more detail. If you have questions about your credit, you can visit "debtconsolidationcare.com".

Ray of financialhighway.com, is a personal finance enthusiast based in Toronto. He believes that financial education is an essential part of life. Through his blog, he wants to share with the readers as to how one should be financially independent. His blog covers topic such as debt elimination, credit card usage, savings and investing, consumer protection and other personal finance topics.

Let us have a look at what Ray has to say about his blogging and personal finance experiences.

Sarah : From where did you get the idea of blogging?
Ray : I have always spent a lot of time online reading news and blogs, in 2007 I started to follow a few personal finance blogs as I found them very different then mainstream media.

Sarah :What is the significance of “Financial Highway”?
Ray : Good question! I used to work as a financial adviser before I started blogging, during that time I spent most of my time doing group presentations to educate people about the importance of early financial planning. of group presentation on the importance of having a financial plan. During the presentations I used driving on the highway as a metaphor for financial planning.

Imagine you are going from Toronto to Montreal, about a 6 hour drive on the highway, and you have to be there by a certain time. If you leave early you can drive on the first lane and chances of you getting there in one piece and on time are very good. However the longer you wait and later you leave the faster and more reckless you'll have to drive to make it there on time and chances of collision and injury are higher.

Now think of your financial goal (retirement in most cases) as your final destination (Montreal). The earlier you start planning the less risk you need to take to reach them, the later you started the more risk you'll need to take and decrease your chances of reaching your financial goals.

A financial plan is your map on your financial highway!

Sarah : What do you do in real life and how’d you get started?
Ray : I can't tell you exactly what I do and where I work, but I am in the financial industry currently and completing the CFA program.

Sarah : Do you think blogging has changed your life in some way or the other?
Ray : Not sure if it has changed my life, but it definitely has impacted my life. I have met some great people from all over the world (Australia, US, Europe and Canada), over time we have become good friends and on regular basis share ideas and collaborate.

Sarah : Where do you see yourself in 10 years down the lane?
Ray : 10 years is a long time! In the past when I have made plans for long term future things have always turned out different. 5 years ago I never thought I'd be blogging leave alone running a successful blog and expanding it. I have had two successful businesses and have ended up selling both and ended in the financial industry, now I am building a good online presence through our blog and social media. I have no idea where I'll be in 10 years from now. I hope whatever it is that I'll be doing I'll be enjoying it as much as I enjoy Financial Highway.

Sarah : What are the three biggest finance mistakes you have ever made in your life?
Ray : To be honest I have not made too many financial mistakes, when I was younger my parents have made some serious financial mistakes which has taught me to be more responsible with money. Having said that my worst mistake was signing up for credit cards while in University. I had about 5 different credit cards and probably about $5000 in debt with minimum wage job and sky-high tuition it was impossible to pay them back. Everything ended up in collection agency and ruined my credit for many years.

Sarah : There’s A Million Money Blogs Out There; Why Should I Read Yours?
Ray : There are many finance blogs out there and everyday more and more pop up, it is hard to be different and stand out. We mainly thrive to educate our readers in their financial planning process, we also try to promote DIY investing to avoid the cruel and expensive mutual fund industry.

Sarah : So can you tell our readers about some of your Famous Followers?
Ray : Most of our followers are either journalists or finance bloggers a few famous ones are: Mighty Bargain Blogger, Million Dollar Journey, MSN Smart Spending, Wisebread, Wallet Pop Canada, Rob Carrick from Globe and Mail and Larry MacDonald.

Sarah : Please advice our readers how to pay off their debts from your past experiences?
Ray : First of all don't get in debt! If you already are and truly want to get out of debt, you'll need to make some sacrifices. Have a written plan in place and start following it, no excuses no if's, but's and why's just do it! Forgo some of your luxuries, pick up a part time job, stop using credit cards basically live a more frugal life. When you see the large amount of debt decreasing and your networth increasing you will not stop until it's all over. Then NEVER DO IT AGAIN!

Sarah : How do feel by becoming a part of world’s largest debt consolidation community now?
Ray : I feel very honored to be part of such great community.

Little People Wealth by Heidi is a blog based on frugal living and money saving tips to help you learn how to save money on purchases and everyday living costs. The blog also has articles based on making money, managing your money better, and tutorials on frugal living. Right from her childhood, Heidi has learned how to live frugally and save more money which you can later use for various purposes like paying down debts, making big purchases or getting over emergencies.

Let's take a look at what Heidi has to say about her experiences with blogging and managing finance better.

Sarah : From where did you get the idea of blogging?
Heidi : Blogging was originally a way to hold myself accountable. After I received a few emails from readers asking questions and thanking me for the information I had posted already I learned that I really liked the feeling that came with helping people. From there, I grew my blog into what it is today.

Sarah : We just noticed the title on your blog is, “Spend Small to Live Large”. How can you say that one can live largely by spending small?
Heidi : Too many frugal sites and lifestyles focus on how you can save money on everything without explaining why. I believe being "cheap" is just as unhealthy as people who go deep into debt without any means to pull out. I go on vacations, always tip at least 20%, give to charities, and I am usually the first to offer to pay for a lunch or dinner group.

It's all about priorities. You need to figure out what your priorities are and then align your financial goals around them. If you save money on the things that are not in your priority list and on the things that are easy to save on then you will have more money for your priorities. It could mean early retirement or it could mean name brand shoes - that's up to you. The goal is to learn how to save money while purchasing the items and living the life you want not to refuse to spend a dime while life passes you by.

Heidi : My life is actually in transition right now. I have a biology/chemistry undergrad degree and two years of masters work towards microbiology under my belt. I taught at a Junior college for two years then I worked in a chemistry lab and finally an ecotoxicology lab for five years. Two weeks ago I decided to stop working outside the home and focus on my blog. It is taking a lot of my time and I have two small children. It made more sense to work from home. I think everybody should strive to get a college degree. It opened many doors for me and it is there for me to use in the future.

Heidi : Absolutely! Since it is now my full time job it has completely transformed my life and allowed me to stay home with my children. Heidi : Hopefully I am still teaching others how to save money so they can live the life they want! I have thought about teaching a few community classes on the subject so I may do that. I'd love to get more into teaching investing and finance along with how to save in your everyday life. Heidi : My biggest financial mistake is renting rather than buying when I went to grad school. Houses in the area were really cheap so I had enough saved up to purchase a small house outright, but instead I rented. Landlords in the area were by every definition, slum lords. I even ended up having to take one to court ( I did win my safety deposit back and he had to pay my court fees, but it was a pain ). I could have sold the house for much more than I bought it had I done that since it was in the middle of the housing bubble. I was only twenty at the time and had no idea that I would be in the area that long or that it would be such a nuisance to have to rent. Other than that, honestly I'm pretty boring in the financial mistakes department. I started working when I was eleven (babysitting). Being the oldest of nine (at the time) meant that people actually seeked me out to babysit. I saved almost all of the money I made. I bought mostly name brand clothing, but I would find sales to do that and since that was a priority for me I do not regret it (and value comes into play here as well). I am definitely not one who thinks you need somebody who has made mistakes to teach you. Heidi : I think you should read many different money and finance blogs. They all offer a different perspective and you can take pieces that work for you from each. What makes my blog different than most the other money and finance blogs is that it covers both sides of the coin. By that I mean increasing your income and decreasing your expenses. To live below your means you need to do both. My blog has tutorials for Ebay, mystery shopping, blogging for income, and ways to earn income online. It also has tutorials for CVS, Couponing, and Walgreens to help save you money. Later this year there are going to be a series on different ways to invest your money right along side my ever popular Budget Christmas Challenge. I answer all my readers financial questions, whether they are about investing in a 410K, IRA, or 529 or if they are about where to find the highest value coupons. Heidi : I don't know of any famous followers unless you count other bloggers. I've had news reporters and book authors contact me about my blog, but as far as regular followers I do not know of any famous ones. Heidi : Paying off debts is partially emotional and you need to know yourself to really decide how to handle it. The best way to do it is to break it down by interest rate and pay the highest rate first. This makes the most sense financially and the latest research shows that this group is most likely to actually get rid of their debt. Figure out what you can save each month and apply the extra to the debt with the highest interest rate. After that one is paid off use the extra plus the monthly amount from the paid off debt to pay down the next highest interest rate. Continue doing this until all the debts are gone. If you need a mental boost to continue then you can pay the lowest debt first. This allows you to cross a debt out and creates a quicker win. It will cost you more in the long run, but there is a lot to say about that mental boost for paying a debt off! I have both mortgage and student loan debt. My extra goes toward my higher interest and higher debt mortgage. I pay my credit card debt off each month, but if I ever got behind then the extra would go toward that first. Heidi : I love it! I love helping people become financially free and this is yet another step in that direction.

Len Penzo is a personal finance blogger. His blog is based on finance and there’s a lot of emphasis on staying responsible throughout one’s life. The articles in his blogs are about budgeting, saving more money, and how to get debt-free. He also shares his real life experiences and the money mistakes he has made. His blog was selected by Political Calculations as one of the best blogs in 2009.

Let us see what Len has to say about his blogging and financing experiences.

Sarah : From where did you get the idea of blogging?
Len : You know, I never ever intended to be a blogger, but I became one out of desperation. Yep. I got tired of writing op-ed pieces that continually got rejected by all the major newspapers, so I decided I would start my own forum!

Sarah : Do you think blogging has changed your life in some way or the other?
Len : Oh yes. It has given me a brand new hobby that I love. I can't imagine not blogging now.

Sarah : There are so many topics on which you can blog. But why Personal Finance?
Len : I've always been extremely good with managing my money. I've always detested debt and lived well below my means. That's not to say I am a cheapskate or live so frugally that I don't enjoy life. My family has everything they need, and we go on nice family vacations every year. But I refuse to squander my money trying to impress others. And while most people over the past decade were taking cash-out home refis to live way beyond their means, I was paying down my mortgage and taking advantage refis to lower my interest rates. At the time people thought I was being overly conservative. Well, over the years I have lowered my mortgage payment from over $1400 to $600 - and I live in Southern California, where home prices aren't cheap by national standards. Most of my friends are now in hangover mode, stuck in homes they owe more on than they're worth - and very little money in the bank. Anyway, what was the question? LOL Oh yeah, I thought personal finance was the area where I could be most effective. (Sorry, can you tell I'm a bit passionate about the topic?) LOL

Sarah : What was your best personal finance decision ever made?
Len : That is a tough one. I've made so many good ones. LOL But seriously, I've made PLENTY of dumb mistakes. As for the best one, it is probably a dead heat between: 1) making the conscious decision out of college to never put anything on my credit card that I couldn't pay off at the end of the month, and; 2) pulling all of my money out of the stock market at the start of 2008, and completely avoiding the market crash later that fall, as well as the subsequent erosion that followed.

Sarah : Where do you see yourself in 10 years down the lane?
Len : One year into a debt-free happy retirement, which I intend to start at age 55 - if not sooner. :)

Sarah : What made your blog as one of the best blogs of 2009 by Political Calculations??
Len : Well, here's what they said: “What happens when you combine a lot of common sense, a lot of irreverence and really entertaining writing? You get Len Penzo’s blog, that’s what you get! Maybe the best description that we can offer is that reading Len is like reading what Dave Barry might be able to achieve if Dave Barry wrote about personal finance.” Those are their words, not mine. It was a great honor, to be sure, and I am very humbled that Political Calculations would even consider mentioning me and Dave Berry in the same breath.

Sarah : What is a major personal finance issue that is on your mind right now?
Len : I think most people are so over-extended after the party that occurred prior to the housing bubble bursting that they are just not able to save enough now for their retirements. And to compound the problem, the safety net of Social Security will probably not be there to help them when they need it. The US has roughly $110 trillion in unfunded liabilities (including Social Security and Medicare - but not counting the new Obamacare law!) and I just fail to see how the US will be able to cover any of that without destroying the dollar - and everyone's standard of living - via massive inflation.

Sarah : Please advice our readers how to pay off their debts from your past experiences?
Len : Don't accrue them. The only good debt I recommend taking on is mortgage debt, debt to start-up and/or expand a business, and (possibly) education debt. I say possibly because I would only take on education debt if it went toward certain degrees that can be used across broad swaths of industries and are always in high demand - like engineering. Some might say I am biased because I have a degree in electrical engineering, but it's true. When it comes to paying off your debt, pay off the highest interest debt first.

Sarah : We saw that you have huge number of networking with other finance bloggers. Do you think this networking is necessary to survive in the finance blogging industry?
Len : Absolutely. I didn't network with anybody for the first five months and my blog suffered for it. Once I started networking my readership numbers started taking off - relatively speaking, that is. I realize nobody is going to confuse my blog with Get Rich Slowly or the Simple Dollar. LOL

Sarah : I see that you have written a review for "Get Financially Naked". Please tell our readers what have you learnt from this book?
Len : At the risk of sounding like a pompous horse's behind (I know, too late) it really didn't tell me anything I didn't already know. But I highly recommend the book - especially for anybody who is seriously considering marriage. When you are married, personal finance becomes a team sport, so to speak. You and your spouse have to be on the same page or the marriage definitely suffer - if not outright fail. So it's best to get your money expectations and personal finance philosophies out in the open BEFORE you get married. If there is a major disconnect that can't be resolved - don't get married. Once married, it is also important that both parties stay involved in their personal finances.

Sarah : How do feel by becoming a part of world’s largest debt consolidation community now?
Len : You better pinch me, because I still don't really believe it. :)