Q&A: T. Harv Eker Talks Money, Debt and Breaking Bad Habits

Credit card with dollars

T. Harv Eker knows a thing or two about money and debt.

As the son of European immigrants, the "Secrets of the Millionaire Mind" author and motivational speaker Eker always knew he wanted to be rich, but he didn't know how to get there. Starting at 13, he worked hard at a variety of jobs and eventually started several businesses, but true financial success seemed out of reach.

Eker eventually struck gold with a chain of retail fitness stores and, in less than three years, achieved his dream of becoming a millionaire. But poor money management skills and lavish spending caused him to lose it all less than two years later.

It was at that point in his life when Eker started analyzing the relationships rich people have with their money. What he learned made such an impact in his thinking that he went from being broke to becoming a millionaire again, and he vowed to share his knowledge. He is now a top speaker,  trainer and international bestselling author of "Secrets of the Millionaire Mind" and "SpeedWealth."

CreditCards.com asked Eker to talk about good debt versus bad debt, financial optimism and consumers' relationships with credit cards.

CreditCards.com: In your book, you talk about a personal money blueprint each of us has ingrained in our subconscious mind. What is one way our blueprint affects the way we think about spending and credit card debt?

T. Harv Eker: Our personal money blueprint is based on our past experiences with money that we learned from family and the messages we received as a child -- for example, "Money doesn't grow on trees" and, "'What do you think I am, made of money?" This influences our money blueprint or our preset program or way of being in relation to money. As a result, some of us become spenders and some savers.

CreditCards.com: Do you think it's possible for the majority of Americans to learn to live without carrying a burden of consumer debt, or has "buy now, pay later" become something that's ingrained into our national conscience?

Eker: If we are taught from a young age the difference between good and bad debt, the difference between an asset and a liability, and how to manage our money, this may have an impact.  Likewise, a collective uniting in diminishing consumerism may make a difference, although this may be unrealistic.

CreditCards.com: If someone told you they are unemployed or going back to school, so they plan to live off their credit cards for the next six months or year, what would you tell him?

Eker: I'd tell him that is not a smart thing to do, ever. You never want to be spending more than you have. So it becomes a whatever-it-takes thing. To eat you must earn. So do what it takes to earn any amount of money and then adjust your lifestyle to that. The biggest issue is habit. It may seem as though this will only be temporary, but that's not what happens in the real world because we're creatures of habit. So spending more than you earn becomes a habit. Living off credit cards becomes a habit. Neither is OK. Ever. Period.

CreditCards.com: Should people pay off their credit card debt before they start investing?

Eker: Not necessarily.  You must acquire the habits and skills of managing a small amount of money before you can have a large amount. Remember, we are creatures of habit and, therefore, the habit of managing your money is more important than the amount.

Saying, "I'll start managing my money as soon as I get caught up," is like an overweight person saying, "I'll start exercising and diet as soon as I lose 20 pounds."  It's putting the cart before the horse, which leads to going nowhere ... or even backward! First you start properly handling the money you have, then you'll have more money to handle.

CreditCards.com: How does consumer debt affect people's optimism about their financial futures?

Eker: We are all in debt to a certain degree -- whether it be a mortgage, car loan or standard credit card. It depends on why debt accrues; for example, do you spend because you are unhappy and go on sprees, or do you use debt to buy homes that you then rent out?  Now more than ever is the time to really work on learning a money management system that can work, no matter how low things seem right now. Remember, either you control your money or it will control you.

CreditCards.com: Do you prefer debit cards or credit cards?

Eker: There is definitely a place for both. If you don't have the money management skills yet, using a debit card will ensure you don't overspend and rack up debt on a credit card. I use a credit card for most of my purchases so that I get lots of travel points. Using a credit card wisely also impacts positively on [%Link?type=glossary&id=71&text="credit scoring"%].  But if you use a credit card, you must be able to pay off the entire amount each month so there is no interest -- otherwise you're spending more on interest than you are gaining in travel points and just getting further into debt.

CreditCards.com: There's a lot of animosity lately toward rich people. Do you think it is greedy to want to be rich?

Eker: Some of the anger is based on envy; some may be well placed as ego can also take over when you make money.  Wanting to be rich is more about having the freedom of choice of how to live your life than anything else.  But you don't achieve greatness in any discipline without hard work, commitment and continuous action. Remember that you cannot be that which you resent. If you have animosity towards rich people, your subconscious mind will make sure that you never become rich.  Some people say they just want to be able to give to others when they choose to. How better to do that than to get rich and have the money to give?

CreditCards.com: When did you learn the "wealth mindset"?

Eker: I learned about the wealth mindset in spite of my upbringing and as a result of the recurring mistakes I kept making along the way. I talked to a wealthy friend of my father's, and he told me to model rich people, so that's what I did. I studied the differences between rich people and poor or middle-class people. In my book, "Secrets of the Millionaire Mind," I explain what I found in the 17 ways that rich people think and act differently from poor and middle-class people. What I learned through this research changed my life.

CreditCards.com: What money decisions of yours would you like to do over?

Eker: Perhaps how I ran my first sports business, although it was through these very experiences that the light bulb went on as to how I should be correctly managing my money and life. Thereafter, my world-class trainings and book were born.

CreditCards.com: How is "Secrets of the Millionaire Mind" different from other personal finance books?

Eker: It asks the reader some difficult questions about their personal relationship with money, family and friends. It makes us look inside out.  Many personal finance books advise on the how to make money aspect. I focus initially on the why -- we take a look at your past and your upbringing and determine why you are the way you are today around money and provide specific action steps to help you change.

CreditCards.com: If you could say one thing to people today who are frustrated with the banking system, with their debt loads and their financial lives, what would it be?

Eker: Create your own financial security for yourself and your loved ones. The best way to do this is to take action, invest in yourself through training, start where you can right now and build from there.