Daily Lessons

The Passion of Your Idea

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“Success has a simple formula: do your best, and people may like it.” — Sam Ewing

I sometimes worry too much about selling an idea, even before it has developed.  As I’m mapping out my vision, my mind begins to wander into other facets of the soon-to-be business. My mind leads me into market segmentation, financing, company structure, etc. and I soon get farther and farther away from developing my idea.

I don’t know why I do that, but what I realized is that too many times, I don’t put enough emphasis on forming the core idea before moving on to how to sell it.  I know I am no the only one.  There are many who suffer from the same symptoms. Here is the solution though, if you can focus 100% on forming the idea, and put your passions into developing a complete product or service, you will find someone who is passionate about selling and the art of marketing to get involved and sell it.  Even if that person is you alone at first.

In this digital world, people are reaching out for something genuine and are gravitating towards ideas that convey passion.

Slow down, take the time to put passion back into your ideas.

Daily Lessons, Personal Finance

A Vision Worth Planning For: Live at Water-Front Property in Belize For Under $1500 a Month

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$1500 dollars a month can get you a maid, gardener,  and water-front property in a Santa Fe adobe-style home with gardens all around in the beautiful country of Belize.

Something worth planning for

Here is a simple monthly budget for a couple living an expatriate life in Belize:

  • Rent: $300
  • Utilities, telephone, and Internet: $500 (Your biggest expense in this country.)
  • Groceries: $150
  • Health insurance: $50
  • Entertainment: $100
  • Car expenses: $300

Understanding Personal Finance and how to effectively manage your finances at home is crucial to not only improving your present livelihood, but can also allow you to plan for a comfortable lifestyle after you retire – Be that at 40 or 65 years old!

Read more about the Belize Life Style Here

Personal Finance, The FICO Score

Better Financial Habits, Better Financial Results:How to Improve Your FICO Score | Personal Finance

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How do you improve your FICO credit score?

So first we covered, What is your FICO score? Part 2 of this FICO series, I will share how to improve your FICO score.

I have found that the way to improve your credit score is pretty consistent. This is a good thing in my opinion.  The reason being, there is some what of a set standard on how to do it.  You won’t be taking a shot in the dark and, in addition, you will be utilizing a type of “shared” opinion and/or solution from financial professionals.  But just like in health care, there is a pro-active and reactive approach.  This post will cover both.  I will share the most repetitive answers I saw, but also share certain lifestyle changes that will help support and promote your new ambition towards a better FICO score.

Top 5 Ways of Improving Your FICO:

  1. “Think of credit as a privilege to be used sparingly.” — THIS IS HUGE! Sparingly DOES NOT mean not at all. (See Improvement #3)
  2. Pay on your bills! — You have to cover your expenses and them some in order to begin paying off your debts as well.
  3. You must use credit to improve credit — switching to a cash only lifestyle is pragmatic, but not financially conscientious.
  4. Pay your credit balances on-time. — Myth: keeping a balance on my credit card improves my score.  Truth: Using your credit improves your score, paying off your balances immediately, improves it even more.  You DON’T have to pay a lick of interest if you pay your balances off.
  5. Have patience — you may see your credit improve if you being paying off large chunks of your debt.  But if you have accumulated many negative marks on your accounts, your score will improve as time passes or those marks drop off your credit report completely.

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So imagine, you wake up in the morning, run 5 miles, do push-ups and stretch. Then, you cook a breakfast with: eggs, bacon, toast, cereal, pancakes (with powdered sugar and butter), syrup, cheese, etc. etc. The run was made POINTLESS!

You may be asking yourself, what is my point? Simple, you may be trimming down your debt and credit balances, but if you are out accumulating more debt and adding to your balance each month, what’s the point! Habits take time to build, but they also take time to break.  I don’t want to get into the psychology of it, but in order to improve your credit score, you must also change your life stlye and spending habits.  BECAUSE THAT IS WHAT GOT YOU THERE IN THE FIRST PLACE!

I read this great article on Yahoo! about a couple who were able to reduce their debt by $30k dollars within 3 years, here are the highlights:

  • They were inspired by books and blog entries that they read about living simply.
  • They begin to reduce their possessions to under 100 items. Idea came from a blog post the couple read.
  • After 3 years, they have reduced their $30k debt and are now living Debt Free
  • Life improvements:
    • Debt Free
    • Money to Travel
    • Able to Contribute to Education Funds for Family
    • Involved in Volunteer Work

You goals in life may be different, or more grandiose, but do not let your fiscally waning life style keep you from them.

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Additional Tips

  • Know your score! — If you don’t manage it, you can’t measure it.  Go to www.annualcreditreport.com to get a free credit report.
  • Use an older credit card! — history is a factor when evaluating your FICO score.  An older card has an older credit history. Best way is to use it once a month or so and pay off the balance immediately, in order to keep it active.
  • Good Will Adjustments! — If you have been on top of your game, and slipped at one moment and missed a payment, you may be able to get a lender to agree to erase that late payment.

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If you need more information or are inspired to research the FICO score a bit more, I have listed my references below.

References:

http://articles.moneycentral.msn.com/Banking/YourCreditRating/weston-raise-your-credit-score-to-740.aspx
http://articles.moneycentral.msn.com/Banking/YourCreditRating/7FastFixesForYourCreditScore.aspx

Personal Finance, The FICO Score

Your FICO Score: What It Is and How It Is Calculated | Personal Finance

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The Fair Isaac Corporation Score a.k.a.

THE FICO SCORE

Who is the Fair Isaac Corporation?  That is a good question to know the answer to because they created the numeric system that a majority of lenders use when deciding to extend you credit or not.  They are the masterminds behind the FICO score.

Now that you know who created it — You need to know What it is, How it is measured, and Where improvements have been made in calculating your FICO score.  This is step one in improving your credit as a part of getting in control of your personal finances.

What is the FICO Score?

FICO stands for Fair Isaac Corporation.  They are the corporation that created the standard for credit scores that are used by almost all lenders.  The Fair Issac Corporation has been in business since the 1950s and actually began building the FICO score around the mid 1980s.

In simple, your FICO score is a number assigned to you after reviewing your credit report. It represents your potential credit risk.   It ranges from 300, being the lowest score, to 850, being the highest.

Your FICO is a tool of measurement not only when applying for credit cards or major loans like mortgages, but it can also be used by an employer to determine your potential as a new employee.  So monitoring your credit score is doubly important.

How is your FICO Calculated?

  • 35% Punctuality – Are you paying your bills on time?
  • 30% Debt vs. Total Available Credit –  Amount of outstanding debt

ex:If you have 3 credit cards with $1,000 each on them.  2 of your cards are maxed out (i.e. no credit available) and one has a balance of $500 dollars. That means you have $2500 in debt of a $3000 Total Available Credit.  You have spent about 83% of your available credit. Not good.

  • 15% Length of payment history – How long have you been using credit?
  • 10% Installment Accounts vs. Revolving Accounts – How many & what types of credit accounts do you have?
  • 10% Number of Credit Checks, Credit currently applied for – Have you applied for new credit?

How the FICO Formula Improved

Sometimes the most responsible borrower may slip up and miss a payment on a utility bill after moving and it went into collections or maybe there is an old library fine or parking ticket sitting in collections that has haunted you since high school?  These collections could be appearing on your credit history and negatively affecting your FICO score.

The newest version of FICO, the ‘FICO 08’ addresses these minor delinquencies  and are now overlooked when calculating your creditworthiness.  Under the new model:

  • Small missed payments with original amounts of $100 or less will no longer damage your score.
  • You are less likely to be penalized for any single missed payment if it occurred 2 or more years ago AND if your credit history is clean.
  • BUT if you have a pattern of habitually paying your accounts late, your chances increase of being penalized for that.

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WANT TO FIND OUT YOUR CREDIT SCORE???

The only authorized online source for a free credit report:

www.annualcreditreport.com

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Additional Facts

  • Average credit score in the United States is around 680.
  • If your credit usage is high, it will more than likely hurt your credit score with FICO 08 (Remember Debt vs. Total Available Credit?)
  • Getting close to your credit limits, EVEN IF YOU PAY ON-TIME, hurts your FICO score in some way.

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If you need more information or are inspired to research the FICO score a bit more, I have listed my references below.

References:

http://www.federalreserve.gov/consumerinfo/fivetips_creditscore.htm
https://www.annualcreditreport.com/cra/index.jsp
http://www.fdic.gov/consumers/consumer/alerts/facta.html
http://articles.moneycentral.msn.com/SavingandDebt/ConsumerActionGuide/tell-congress-no-more-secret-scores.aspx
http://articles.moneycentral.msn.com/Banking/YourCreditRating/the-new-math-of-FICO-credit-scores.aspx
http://www.credit.com/answers/questions/210/How-will-the-new-version-of-FICO-affect-how-collection-accounts-appear-on-credit-reports%3F
http://www.wisegeek.com/what-is-a-fico-score.htm

Personal Finance

Fico Scores, Credit Cards, and Online Banking: what finance class never taught you.

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  • Do you know how your FICO score is calculate?
  • Did you know that Credit Card Companies cannot raise your APR within the first year?
  • Do you know there is only ONE government backed website that allows you to check your credit score annually, FOR FREE?  (Like really free. Not sign-up for this program and then it’s free)

I didn’t know the specific answers to these questions until recently and there are a number of policies, processes, and formulas that I wish I had educated myself on, or been taught while in high school or during undergrad.  For example, a financial adviser informed me recently that:

  • If your balance is 50% above your credit limit, it can adversely affect your credit.
  • So as a benchmark, it is best to not go above 30% of your credit limit.
  • I thought you just had to pay your bills on time and never go over your credit limit.  (sneaky credit agencies)

Due to my education in finance — I can read a balance sheet & income statement, recite ratios that determine if a company is leveraged, understand cash flow, and depreciate capital assets (MACRS or Straight Line). Anything you need financially to operate a business, both digital and brick and mortar.

What my institutions of education failed to teach me were the rules that govern personal finance. I had to self educate myself on that.   So if I had to educate myself, then how many other people are out there financially burying themselves (according to most news sources, A LOT)?

Over the next couple of months, I’ll share with you some finance issues and topics that effect your every day life and mines as well*. I’ll simplify and cover topics like:

  • What is your FICO (Credit) Score and how do credit bureaus calculate it?
  • New Credit Card Laws
  • Cautionary tales with Online Banking
  • How to build your credit WHILE IN SCHOOL
  • and more!

If you choose to pay attention to the rules of personal finance or not, you still exist in its world and follows its rules.  But if you take the time to understand the rules, it’ll make budgeting, planning, accounting, and improving your personal finances that much easier.

*I am no expert nor am I certified, so I will not be giving out investment advice or suggest any particular bank or recommend one particular investment vehicle over another.  This is strictly for educational purposes. My hope is to inspire an exchange of ideas and provide a great resource of facts that will help improve management of personal finance.

Daily Lessons

Birthday Reflection: Stay In The Climb

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What a great birthday weekend this has been for me!  I cannot express my appreciation enough for those who took the time to reach out and say ‘Happy Birthday’ and to those who I had the chance to celebrate my birthday weekend with.   I hadn’t heard from some of them in years and I am really glad to see that they are happy and healthy. I was excited to hear about new children born and seeing daughters and sons of my friends and wedding photos.  From coast to coast ,what a vibe!  My people who I kicked it with this weekend–Chu, Randy, Patrick, Gina, Trish–Thanks for hanging tough with me! We hit Casino Parties at the Citrus Club, Re-invention Parties, Corona’s –the Cigar Spot, the drink count was crazy, and you put me into a food coma on Sunday Night!!!  I know we all work 50-65 hour weeks, so it was no easy feat, but you are the reason why I had a great time!

On a more sobering note, I didn’t hear from people whom I have considered friends from over the years.  That was a bit of shock to me.  This last year has been a rocky one, so at times I can take things a bit too seriously, but I was climbing up hill, and that made it worth the struggle.   Old friends have faded, new friends have appeared and even some friendships, that I thought were irreparable,  were mended!

So at last, it is now quiet.  I now have had a chance to reflect a bit on not only the last year, but the last 26 years, and more recently, the last 36 hours. This last year has been an emotionally and spiritually draining one.  I took the road less traveled and am carving my own path in a new area, with no family around me.  I cannot tell you the doubts, frustrations, and even loneliness that i have had to battle over the course of this year.  I have realized that there is no one that can replace the team and family that I left in DC, but I have also realized that there is a reason I left DC, and holding on to times past isn’t fair on myself or those who have made the effort to become my friends and family in the south!   It only slows my progression, it only makes those new people around me begin to feel unappreciated. So my focus is forward.

To promises I made to my friends and family back at home, I will hold myself to them until they are accomplished or I die trying.

Thank you to my friends and fam in the South.  Shout out to the local camp, the super friends, and my new co-workers at evolveALOUD with whom I have the opportunity to build better friendships with.

I am going to end this first entry with a quote that moved me when I read it. It is from Tyler Perry’s Journal in regard to his Mountain Climbing trip in Hawaii:

“Sometimes in life dreams are hard to follow, like that climb. You don’t know how high you’re going or even if you’re moving, but every step, even when you can’t see what’s behind you, will take you closer to your goals. It’s in the climb. I know you may be struggling right now, but you’re in the climb; things may be hard right now, but you’re in the climb; people may not believe in you, but it’s part of the climb. They may take shots at you, but stay in the climb; you may have to stand alone, but you’re in the climb. Even if you’re not where you want to be right now, I want to say to you what she said to me, ‘This is the best part, now turn around.’ Look how far you’ve come. God has not brought you this far to leave you. Stay in the climb.”

-Tyler Perry

1% Inspiration ~ 99% Perspiration