I see personal debt reduction as the single best investment play a person can make. You see, debt reduction is a guaranteed investment strategy that cannot fail. Simply put, if you have an outstanding $10,000 loan note at 9% APR interest, and you refinance that note while making a principle reduction of $2,000 in the process, you're going to be paying 9% interest on two thousand fewer dollars. It is beautiful in its simplicity. What I like even better than the face value reduction of debt are the compound effects that are then presented. I call it the reverse snowball effect. Let me explain, using our situation as a rough example.

We had a consolidated loan note on our two vehicles for a sum total of about $12,000. Today we executed a new loan agreement, we paid $4,000 against the existing principle and we re-extended the term one additional year. The result is that our monthly payment has dropped by over $300 per month and the bank was able to accept just one of our vehicles as security. So basically, we now have nearly an entire paycheck placed back into our monthly budget and we can reduce our insurance cost on the noncollateral vehicle by increasing our deductible, because we are no longer bound by the insurance requirements imposed by a lien holder. Furthermore, because our monthly budget has gained some serious discretionary capital, we can now make additional principle payments at any time and thereby further accelerate retirement of the debt. The investment strategy we executed today shall provide us with "returns" of a couple thousand dollars.

When considering an investment program, always look first within your existing framework. If you can reduce your current debt load, I highly recommend doing that. It's called purchasing equity, it's easy, and it cannot fail. Look at it this way: The less you owe, the less someone else is getting rich off of your hard earned money.