Mike Michalowicz
speaker
1,537 appearances
2 recordings
1 series
first heard Feb 2026
last heard 20 Feb
Mike Michalowicz’s voice in public audio — every appearance, attributed to the second.
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recordings per month · last 12 monthsRecordings per month over the last 12 months — 2 in all, peaking in Feb 2026 with 2.
Appearances
This was at least documented by Dave Ramsey.
I don't know if he's the creator of it, but he calls it the debt snowball.
And it's illogical, but it's very behavioral.
The logic is pay your debts with the highest interest rates because that's the most expensive.
The behavior, though, is if we can get early wins, we're more likely to stick with something.
So in his concept, sort debt by smallest amount due first to your larger debts and get rid of the small debts first because it'll trigger that momentum because you can tear up those bills and get the next one taken care of.
So we found deploying that debt snowball effect, sorting by amount due as opposed to interest rate, actually gets better momentum in debt eradication.
It's usually a scarcity mindset that triggers that, meaning I'm afraid the business can't do this on its own yet, so I'm going to put the money back in.
It's like starting riding a bike with training wheels, and every time you start getting momentum, you're going to put the training wheels back on, and you never allow yourself to get the training wheels off.
Well, by reinvesting or plowing back, and those are words I can't stand, because what they are, they're soft terms for extra money for expenses.
It's basically saying, here's an expense.
You're not strong enough or healthy enough yet, company, not to get by without more expense cash.
When you, as the owner, start taking profit distributions out of the business, the business now can't have the training wheels anymore.
It has to sustain on its own.
It has to work within its true budget.
It doesn't get a little extra feed from the owner, the parent.
So first thing is it harms a company by replowing back money in over and over again.
The second thing is we want to empower the entrepreneur.
So when you take that reward mechanism, when you get into the habit, you're like, wow, maybe you reward yourself by expanding your lifestyle in certain ways, or maybe you like to donate to charities or have an impact in some other capacity.
But what it does, it starts empowering you to have a greater impact as an individual.
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