Debt Free for Life (Canadian Edition)

Debt Free for Life (Canadian Edition)

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by David Bach

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The #1 bestselling author presents his most important book since The Automatic Millionaire and gives Canadians the knowledge, the tools, and the mindset to get out of debt — forever.

Whether you are working off student loans or trying to meet the minimum balance on your credit card bill, you are probably worried every time you open your mailbox.


The #1 bestselling author presents his most important book since The Automatic Millionaire and gives Canadians the knowledge, the tools, and the mindset to get out of debt — forever.

Whether you are working off student loans or trying to meet the minimum balance on your credit card bill, you are probably worried every time you open your mailbox. With salaries frozen and layoffs looming, how will you ever be able to pay down that debt, let alone retire in peace?

Here, David Bach offers a new philosophy made for our times, a paradigm-shifting approach to finance that teaches you how to pay down your debt and adopt a whole new way of living. If you have debt, you can be rich but still not free. When you pay down your debt, you reach Freedom Day, that glorious moment when you need a lot less money just to live. On that day, you are truly free. You can have a smaller nest egg and still retire, perhaps even earlier than you expected.

With his trademark motivational energy and take-action step by step advice, Bach helps you revolutionize your finances. In these lean times, it's still possible to live your financial dreams. Let David Bach show you how.

Product Details

Doubleday Canada
Publication date:
Product dimensions:
5.78(w) x 8.60(h) x 0.89(d)

Read an Excerpt

Once upon a time (in the decades after the Great Depression), Canadians desired a life of financial freedom. To our grandparents and great-grandparents, this meant staying out of debt. Living through the Great Depression, our great-grandparents learned the hard way that debt was bad, that owing money could destroy your life. So they paid for things in cash, they bought homes with big down payments, and they worked hard to pay their mortgages off as quickly as possible. They even had “mortgage-burning parties” in their backyards, where they celebrated their FREEDOM from the banks after the last payment was made. As a result, many of them were able to retire in their early sixties without financial worry. Retirement wasn’t a dream for our great-grandparents (and often our grandparents, who learned prudent financial behaviour from their parents), it was a promise! For them, the dream was real—you went to work, you worked hard, you saved money, you paid down your debt, and then you retired with a pension and you lived happily ever after.
These days, the dream of financial freedom—freedom from worry, freedom from living paycheque to paycheque—has become a nightmare. We bought the myth—or, I should say, we bought the lie and turned it into a myth. As I write this, Statistics Canada reports that Canadians are on the hook for more than $1.4 TRILLION in consumer and mortgage debt. This translates to an average of $96,000 of debt per Canadian household. At the beginning of 2010, credit card debt in Canada amounted to $78 billion—about $2,225 for every man, woman, and child in the country. The number of people in Canada who hadn’t made a payment on their credit cards in three months or more rose by 50% between 2008 and 2009. At more than 2%, the delinquency rate in Toronto was higher than the Canadian average of 1.7%.
Compared to the United States, Canada remains relatively unscathed by the global recession. Housing prices remain fairly stable, even if housing has become increasingly expensive in places like Toronto and Vancouver. Unemployment rates have fallen, and although many Canadians continue to live paycheque to paycheque, the number of personal bankruptcies in Canada has fallen, as well.
Canada’s government incurred a $55-billion deficit in fiscal 2009 to shore up the nation’s economy against the aftermath of a worldwide recession, but the government anticipates that it will balance this deficit within five years.
This doesn’t mean that Canadians have clear sailing ahead. Housing prices have risen to five times the average after-tax income of Canadian households, and interest rates will likely rise by 2011. For every dollar of income, the average Canadian household carries $1.45 in debt. More than half of employed Canadians say they live paycheque to paycheque. If mortgage rates hit 5.25%, about 375,000 mortgage holders in Canada would have trouble making their payments. So perhaps we should all take a page from the government’s book and figure out how to get rid of our debt.
So let’s be honest. Do you have more debt than you want?
Chances are, you do—or you wouldn’t have picked up this book.
Are you paying a huge percentage of your paycheque each month to just cover the interest on what you’ve borrowed for your home, your car, your student loans, your credit cards, etc.? Are you frustrated that no matter how hard you try to pay off your debt, it seems to take forever and you don’t see any progress happening fast enough? Are you worried about your ability to retire someday because of your debt?
Or is it even worse than that? Are you unable to make even the minimum payments on your loans and find yourself falling behind, with your debt growing? Did you know that if you are carrying $10,000 in credit card debt and your card is charging you 25% interest, and you’re making minimum payments, it will take you more than 50 years to pay off your debt—without borrowing another penny? Did you know if you have a $250,000 mortgage with a low fixed rate of 6%, paying it off over 30 years will cost you just under $540,000?
The reason I am sharing these figures with you not to be negative or to depress you. What I want to do is start this book and your journey to being debt free for life with the truth. And the truth is that HUNDREDS OF THOUSANDS of Canadians are hugely in debt and want out!
A study by the Certified General Accountants of Canada says 20% of Canadians with debt think they have too much and have trouble managing it. These individuals want to improve their financial well-being through debt reduction. Indeed, in the recent rush to take advantage of low mortgage rates by refinancing, many loan applicants have been putting money into their homes—meaning they are reducing the amount they owe—rather than taking money out.
So you see—you’re not alone! And like so many others, you can do something quickly to change your situation, reduce your debt, and become DEBT FREE FOR LIFE!
It’s easy to get into debt. Getting out is another story. Some so-called debt-settlement companies will market to you and tell you “We can cut your debt in half in minutes and save you thousands of dollars.” Sorry, but that’s just nonsense!
This book is about the truth. It offers an honest plan that will work—if you work it! I know some of you are reading this book because you are really drowning in debt and are looking for a life preserver. If this is your situation, I believe this book can be the life raft that gets you back to dry land. But let me be clear: You don’t need to be in over your head to benefit from this book or the Debt Free for Life Plan I’m about to share. This book is about a totally new approach to building financial freedom that stresses “paying down your debt” so you can buy back your freedom. I’ve been teaching my readers for years how to pay down their debt, and maybe I have taught you already—but the Debt Free for Life Plan is a revolutionary new system that that will make paying off your debt easier than it has ever been.
Most people who apply the Debt Free for Life Program I will share in the pages that follow will be able to get themselves out of debt an average of 15 years faster and save themselves at least $30,000 in the process. Some of you will do this even faster than that and be out of debt in as little as seven, five, or even just three years. (I’ve even seen people get out of debt using these tools in less than a year.) How quickly you can do it will depend on you—on how much debt you have, how much you can cut your expenses, and how fast you want to make it happen.
Some of you have debt that is so long overdue that you can no longer be forced to pay it, and you don’t even know it. (You will once you read this book.) Some of you can save six figures by simply applying one idea in this book (you’ll find it on page 102 in Chapter Nine).
The fact is that the math of debt is not complicated. You simply need to apply the principals I will share and then, like the Nike slogan says, “Just Do It.”
Now don’t get me wrong—I am not promising you overnight freedom from debt. But what I can promise is that the moment you start on this plan, you will begin to feel better. Just knowing that you have a plan in place to pay down your debt in the right order, the right way—a plan you can carry out yourself that will save you thousands of dollars in interest fees and cut years off your indebtedness—will truly lighten your burden, however light or heavy it may be.
I also promise you that having less debt will feel GREAT.
Debt creates fear. Not having it creates peace of mind. This may sound like a cliche, but it’s true. When you have less debt, you will feel more FREE. You will have fewer worries, less stress, less tension, fewer fights at home. In short, your life will have less fear and more serenity. Not only that, but you will also be able to build wealth faster.
I cannot express my gratitude for what your books Start Late, Finish Rich and Smart Women Finish Rich have done for me. They’ve helped me change not only my financial life, but my physical life as well. My “latte factor” (the way I wasted money) was food! I could not believe how much I was wasting on “occasional” snacks. It was atrocious—and so was my waist line! The one major thing you said that stuck in my head and changed my actions was, “Is this purchase really necessary?” I now ask myself that question every time I think about spending money—and doing this has truly changed my life. I have saved over $6,000 in six months and I have lost 21 pounds. David, you are a lifesaver, in more ways than one! Thank you for everything!
Nicole D.
Yuba City, CA
We’re going to start the process of achieving financial freedom by learning how to change your mindset, cut your expenses, and live within your means. Next, I’ll shoe you how the credit card companies imprison you with tricks and traps in order to keep you in debt for life. Once you understand their games, you’ll be able to fight back and win—and achieve real financial freedom.
Then we will look at what I call the DEBT FREE FOR LIFE MINDSET. This will help you get to the root of why you got into debt in the first place—and how you can get out of it once and for all.
Debt is often created because, without thinking about it, we spend money we don’t have to buy things we were subconsciously PROGRAMMED to buy. Re-read that sentence! Companies spend BILLIONS AND BILLIONS of marketing dollars each and every year to bombard you with enticements to spend money. Trust me when I tell you that just about anyone can get out of debt once they become conscious of this. On the other hand, if your mindset on debt is wrong, you’ll probably never get out of debt—and if you do, the odds are that you’ll get right back in. That’s not good enough. We want you DEBT FREE FOR LIFE!
Once we’ve got your DEBT FREE FOR LIFE MINDSET right, we’ll look at my do-it-yourself system for getting out of debt. It’s called DOLPR, which stands for “Done on Last Payment.” This is a simple system that I have taught for more a decade to prioritize your debt so you can pay it off as fast and cheaply as possible. One of the great things about DOLP is that you can do it from the comfort and safety of your own home with zero technology. All you need is a pen or pencil and a sheet or two of paper.
Although I believe that most of you who read this book should be able to implement the do-it-yourself systems I will teach you to reduce your debt, I know that some people would prefer to have the help of a professional who can personally help guide them through the process. If you’re one of these people, don’t worry. Once I’ve finished explaining the ins and outs of DOLP, I will share everything you need to know about how to find a qualified expert who can help you get out of debt.
As part of this process, I will explain in detail how the nonprofit consumer credit counselling world works and what credit counsellors can do for you. We’ll also explore the debt-settlement industry (the “for-profit” debt-reduction business) and what to watch out for, since this is a world filled with pitfalls. This is important for everyone to know, whether you plan to seek out counselling or not.
We will then cover the secrets to getting out of debt that the credit card companies don’t want me to share, including how to get your interest rates lowered, your late fees waived, your annual fees credited back, and more. I will teach you how to negotiate for a better rate, and if you can’t get a better deal on your current card, how to find a new one.
Along the way, I will share with you everything you need to know about your all-important credit score and credit reports. You’ll learn how to protect and improve your score—which ultimately will make it easier to renegotiate your debt. And I will help you better understand your mortgage and student loans and what you can do to pay them off faster.
I will also cover bankruptcy (although I hope you never need this chapter) and share with you a ten-minute plan to put your entire financial life on Automatic Pilot (called The Automatic Millionaire System). Lastly, I will suggest some ways to find some extra money you may not have realized you have—money you could use to help you pay down your debt.
It’s a lot to cover, but I have done my best to make it all easy to understand and—most importantly—to ACT ON.
As in many of my previous books, each chapter ends with a series of action steps—in this case, “Debt Free for Life Action Steps”—a condensed “to-do” list designed to remind you what you need to do and to help you keep track of your progress.
After reading The Automatic Millionaire, my first goal was to become debt-free within a year. So we started putting 20% of our family income toward paying off our debt. This limited our available money, but it was not a burden to us since we had decided to simplify our lives. We did this by cutting down on shopping, doing more meaningful activities, and driving our paid-off car longer instead of getting a new one with a consumer loan. Now, after only one year, we paid off all of our debt ($12,000), plus I was able to establish a four-month financial cushion for security. Before I read your book and worked your plan, I would have spent the “extra money” I was earning from freelancing on all kinds of things, but now I am determined to act differently. This time I have goals. It has not been as hard as I expected. For the first time, our family doesn’t have to live paycheque to paycheque. I can’t wait to achieve the next goals on my list and to put more of your advice to work. Once again thank you very much!
Brigitte R.
Seattle, WA
Before we get started, let me once again say, THANK YOU! Many of you know me for my New York Times #1 bestsellers The Automatic Millionaire and Start Late, Finish Rich. Others may know me from my bestsellers Smart Women Finish Rich, Smart Couples Finish Rich, or last year’s bestseller Start Over, Finish Rich. If you liked those books, I think you will LOVE this one. Many of you have written to me over the last few years and asked me to write a book like this. I hope it meets your expectations.
But whether you’ve read all my previous books or this is the first book of mine that you have picked up, I am truly grateful that we are getting to spend this time together, and I’m excited to have the chance to really help you deal with your debt. Together, I truly believe we can tackle the debt that is holding us back, and move each and every one of our lives forward powerfully.
Reviewing what we discussed in this chapter, here is what you should be doing right now to become Debt Free for Life. Check off each step as you accomplish it.
·     Recognize that we have let debt get out of control—and that as a result, we are in danger of losing once and for all our dream of financial freedom.
·     Commit to taking action now to change your situation, reduce your debt, and become DEBT FREE FOR LIFE! Join the ”Debt Free Challenge” at

Meet the Author

DAVID BACH is the author of the runaway bestseller The Automatic Millionaire and the national bestsellers Go Green, Live Rich, Smart Women Finish Rich, Smart Couples Finish Rich, The Finish Rich Workbook, and the number one bestsellers, Start Late Finish Rich and The Automatic Millionaire Homeowner. His latest book is Fight for Your Money. Bach has appeared several times on The Oprah Winfrey Show to share his strategies for living and finishing rich, and in several episodes of the CNBC special, The Millionaire Inside. His FinishRich® seminars are the leading financial seminars in North America, having been taught by thousands of financial advisors to more than half a million people in more than 2,000 cities. He lives in New York and has a young son, Jack.

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Debt Free for Life (Canadian Edition) 3.2 out of 5 based on 0 ratings. 69 reviews.
Anonymous More than 1 year ago
This book is absolutely no help if you've already declared bankruptcy and/or lost a house through foreclosure, and are trying to put your life back together and stay debt-free. An investment in Dave Ramsey's book The Total Money Makeover and Steve and Annette Economides' America's Cheapest Family Put You Right on the Money would be much better choices.
Anonymous More than 1 year ago
I'm a huge Fan of David's but this book seems like the same book he wrote in 2010(Start over 2010). This was the first time i read one of his books and did'nt walk away blow away. Im very disappointed as a fan.
Rocio Jackson More than 1 year ago
Ive never read a financial book with so many ads...the book is suppose to be a guide for being debt free yet all his product mentions really make me question his credibility. Im a finance major and this book really lacks the substance (information) people need to achieve the goal of being debt free...what a waste!! Dont waste your time on this!! Im sticking with dave ramseys books and advice.
24601 More than 1 year ago
I typically love David Bach books, but this was just a glorified commercial for Equifax and Debt-Wise. There are virtually no practical suggestions in here, other than to someone "find" $20 extra a day to pay down your mortgage and credit cards. The DOLP system is unnecessarily complex and doesn't address why people are in debt in the first place - overspending. There are no suggestions on how to cut back spending and live within your means other than a one paragraph box telling you to go to his website and checkout the "latte factor." An entire chapter was devoted to checking the IRS, state treasury, and savings bonds websites for unclaimed property! Yeah, right. Like that is really the most probable way people are going to get out of debt. If you have read any other David Bach books, don't bother with this one. There is no new information, just lots of filler.
Windy Pitcock More than 1 year ago
A few helpful charts. Too commercially written for the purpose of supporting his other books, web based business, hookup with Eqifax, etc.
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