Teaching you to embrace today while making yourself a millionaire!

I wish I would have understood how easy it is to become a millionaire by starting to save small amounts of money when I was younger...

I feel compelled to share the simple concepts you can apply today....


29 November 2009

FICO Credit scores revealed

Your actions make a huge difference in your credit score and the cost of doing business.

FICO Reveals How Common Credit Mistakes Affect Scores
by Jeremy M. SimonSunday, November 29, 2009

Did you max out your credit card? Expect a credit score drop of 10 to 45 points. Declare bankruptcy? Your score will plummet by up to 240 points, and your odds of getting credit will nosedive with it.

The "damage points" data, unveiled recently by FICO, are part of the most revealing glimpse into the firm's once-secret -- and still mysterious -- credit scoring model. The new information discloses how many points borrowers' scores will drop when they make the most-common mistakes.

'Help People Understand' Scores
"I hope this information will help people to better understand FICO scores and the value for them of avoiding credit missteps. It illustrates key points such as the higher your score, the farther it can fall if you stumble," says FICO spokesman Craig Watts. "Getting and maintaining a good score isn't complicated. We all just need to pay our bills on time, keep credit card balances low and take on new debt sparingly. "

The greater transparency about FICO scores is important because American consumers' ability to get credit rises and falls with the number. FICO, the company that pioneered credit scoring, assigns consumers a three-digit number from 300 to 850, depending on how well they handle credit. Other companies also offer scores, but FICO's version is the most widely used by lenders in determining whether a consumer can borrow, and at what rate.
FICO's credit score has been around for decades, but only within the past decade have consumers gradually gained access to theirs. Though the raw numbers can be purchased, how they're figured remains a FICO secret, as closely guarded as the formula for Coca-Cola. Until Thursday, FICO revealed only broad categories of factors influencing the score, but not the number of points at stake for consumers who fail to pay as agreed. The "damage points" information, revealed in a report by personal finance writer Liz Pulliam Weston, will be made available through its Web site starting this weekend.

FICO's information shows that bankruptcy does the most serious damage to a credit score (up to 240 points), followed by foreclosure (up to 160 points) while maxing out a credit card has the least numerical impact (as few as 10 points).
Those with good or excellent credit -- so-called prime borrowers -- put more points at risk with each mistake. For example, someone with an average credit score of 680 who pays a bill 30 days late will see a drop of 60 to 80 points. But for someone with an excellent credit score -- 780 -- that same delinquency can send a FICO score tumbling by 90 to 100 points.

The Cost in Dollars
In order to show just how badly a drop in your FICO score can hurt your wallet, we spoke with members of the home mortgage, auto and credit card lending industries. We presented hypothetical scenarios of a consumer who decided to apply for a $200,000, 30-year mortgage; a $20,000, five-year auto loan and a credit card. While all the industry insiders stressed that a FICO score isn't the only factor in determining who gets credit and at what cost (other factors they cited include the borrower's debt-to-income ratio and whether they have already established a relationship with the lender), they were able to provide an idea of what a borrower who had the following credit scores could expect.

For a Consumer Who Started With a FICO Score of 780:
Following a 30-day late payment, the consumer's car loan rate would jump nearly 3 percent, costing the borrower $26 more each month.

Following a debt settlement, the consumer would pay as much as $109 more each month on a home mortgage.

For a Consumer Who Started With a FICO Score of 680:
Following a 30-day late payment, the consumer would pay $41 more each month for a car loan.

Following a 30-day late payment, the consumer would pay as much as $95 more each month on a home mortgage.
Following a debt settlement, the consumer would no longer qualify for a credit card.

Some Surprised By the Details
Consumer advocates say it's important for borrowers to know what can damage their FICO scores. "If they know it in advance, they won't go out and step in a pile of doo-doo. They won't go out and do some of these things," says Linda Sherry, director of national priorities with advocacy group Consumer Action. Even experts found some surprises in today's news. "FICO imposes bigger hits than I would have thought for being maxed out or 30-days late just once, reinforcing my view that it is a cruder, blunter instrument than they like to claim. Nevertheless, it is a powerful, widely used crude blunt instrument," says Ed Mierzwinski, consumer program director for the U.S. PIRG consumer advocacy group.

Of course, knowing the impact on a FICO score and actually avoiding these mistakes are two separate things: Amid rising unemployment and other daily financial struggles, paying bills and staying on-track financially becomes a much bigger challenge for many borrowers.

"Some of these things are out of their control," Sherry says of consumers.
Additionally, as Weston points out, consumers with identical FICO scores can have different credit histories. That means the same slip-up -- such as maxing out a credit card -- could have different impacts on consumers who have the same FICO score. In the examples they provided, FICO assumed each borrower had several active major credit cards, a mortgage, car loan and student loans.
Sherry acknowledges the benefit of putting a number to a financial blunder. "I don't think we necessarily knew the numbers that a bankruptcy could apply to a credit score," Sherry says.

Helping You Make Better Decisions
While knowing the numbers may not keep you filing for bankruptcy if given no other choice, the information may help you make the best decision when faced with a bad situation.

FICO scores -- and the access to credit they provide -- are a valuable asset to consumers and supply a safety net when incomes are stretched. It's an asset that needs to be protected, Sherry says, even if job loss or catastrophic illness makes bill paying problematic.

"In that period of time, paying down debt is the last thing on your mind. Paying the minimum payment may also be the last thing on your mind, but you'll be doing yourself a big favor if you do," Sherry says.

Stay tuned....

24 November 2009

Tuesday's Tips

Hey everyone! Time for another post based on real situations from my life. This week my situation is a bit depressing, but because of preparedness everything is going to be just fine.

1) Have at least 3-6 months of living expenses saved. Put this money in a fund that you never use. It's best to start by figuring out absolute necessities that need to be paid. Mortgage/rent, loans, medication, and utilities. Also add in another hundred or two for food and/or other necessities. If you have credit card debt, which I recommend avoiding, figure out the minimum payment. Start an account that will give you instant access to the money if needed, and then forget you have it. I have money deducted from each paycheck and automatically deposited into my account. That way I don't have to worry about spending what I'm trying to save. I also put part of any bonus money or tax return money into the account so I don't blow it all.

2) This money will be useful for any big event. This event could be anything: a large medical bill, job loss, or car crash. It could be any number of other things, but this money should be for emergencies. If you rack up lots of credit card debt and use your savings then there might be bigger problems that you need to address. This needs to be emergency only money. In my case my girlfriend lost her job recently. However we both have savings for just such an occasion. We won't need to worry about making rent or utility payments because we have our extra savings that we never spend.

So just remember to be prepared for any occasion that could arise. You'd be surprised that you'll save up a pretty large sum if you really want to. And should something come up that will cost a large sum, you'll have your emergency stash ready to go.

I'm on a 168 hour break so until then Stay Tuned...

18 November 2009

Life Partner Choices Can Affect Your Credit

One of the biggest reasons for a marriage to break up is MONEY! Make sure you talk about your views, spending habits, values, and current financial situation. Know what you are signing up for as your partners credit history can affect you.

Also while we are in love our significant other's habits seem cute - but change to a major irritation once you are committed to each other. You are trying to save for a house and they are out buying shoes or buying sporting equipment.

When I think through conversations with my friends and family - their biggest grip is how their significant other views and spends money. To the point of keeping things from them to avoid fights. Do you really want to go there?

Make sure you have conversations and agree on your goals prior to making a commitment.

Marriage doesn't wipe out credit history
BY don taylor, ph.d., cfa, cfp,
© Copyright 2009 Bankrate, Inc. All rights reserved.
Bankrate — 11/10/09

Dear Dr. Don,
I am worried that when my fiance and I get married anything negative on either credit report will affect us. Will it affect us if it is not a joint account together and it happened before we got married? Please help me ease my mind so I can get back to planning my wedding.
— Melissa Matrimony

Dear Melissa,
You both bring your credit histories with you into the marriage. When you jointly apply for credit, the lender will review both credit reports. In a community property state, the lender may consider both credit reports in all cases. That's because in such states, debt taken on during the marriage is a joint obligation even if only one spouse applied for credit.

The community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington or Wisconsin. Alaska allows couples to elect community property treatment. Contact your state's attorney general if you live in a community property state and want more information about community property statutes in general or as it relates to consumer lending. The National Association of Attorneys General Web site provides the contact information for your state.

I think it's better to be proactive and review your credit reports and credit scores to see if one or both of you need to work on improving your credit history. The feature "How to get your free credit report" explains how to get your credit report for free, but you have to pay to get your credit scores.

Correcting mistakes on a credit report through the dispute process can clean up a credit report. Because the information in your credit report determines your credit score, the score will improve. The feature "Fixing mistakes on your credit report" explains the dispute process. Even if everything on the report is accurate, most negative information will drop off a credit report after seven years.

Figure out if there's a problem. If there is, figure out how you're going to handle it as a couple. Then, you can go back to planning your big day.

© Copyright 2009 Bankrate, Inc. All rights reserved.

17 November 2009

Tuesday's Tips

Good afternoon millionaires. I am writing today about a bunch of random thoughts that popped into my head while I was sitting at work today.

1) Check for coupons and sales on your favorite items. This can work very well if your favorite food or items are non perishable. Say you just love Cheese-Its, but you can't afford them every week. Well if you watch for a sale and for coupons you can combine the two into a great savings and get more boxes at once. Then you just stock your pantry and you don't have to worry about spending tons on them, or buying them for a while. I recently did this with corned beef (I LOVE Reuben's) and purchased a bunch when it was half off at the deli. I even purchased enough to make a Reuben pizza (totally delicious) so that's a huge win in my book. The savings are so yummy.

2) Donate something. The holiday season is upon us, and it truly is time to reflect on all we have to be thankful for. But those things we have, and might take for granted, other people can only dream of. Donate some time, money, a gift, etc. this season to help others. It is very easy to get caught up in our own lives and troubles that we forget to reflect and help those around us. The active chapter of my fraternity are holding a toy drive, for the Shriner's Hospital, at a local Wal-Mart this year, so I'm going to buy a toy to donate, and then help them run the booth outside. I encourage everyone else to find something that they are passionate about, and then find a way to donate in some facet, to that cause.

3) Celebrate the season! I am one of those people who typically gets annoyed that people are putting up Christmas displays in October, in spite of the fact that Halloween and Thanksgiving haven't happened yet. The commercialization is nauseating to me. That said, I realized that I was grumbling about it every time I went to the store, and that's not who I want to be. So I changed my tune and I just smile when I see the decorations and hear the music. I spent way too much time being negative about the decorations, and now I just go with it. It may not be the best solution, but I am a lot happier when I go out because I decided to go along with the celebration. So everyone celebrate, and spread the good cheer.

I've got to get back to work, but it'll just be another 168 hours and then I'm back.

Until then Stay Tuned...

10 November 2009

Tuesday's Tips

Hello again everyone! It's time for another edition of Tuesday's Tips. Being that I just went to the grocery store tonight I decided to give my tips on smart shopping.

1) Make a list. This is probably the most important thing, in my opinion, to smart grocery shopping. If you go into the store knowing exactly what you need to buy, and you stick to it, you can avoid impulse purchases that rack up a hefty bill. As a side note, I have been shopping with a list for over a year now and it gets easier every time to stick to it.

2) Allow for one "special" item on your trip. I know it can be hard to stick to a list, and sometimes you need to mix it up so shopping doesn't become mundane. That's why my girlfriend and I decided to implement the special item rule. When we go shopping we allow ourselves to purchase any item ($5 or less) that isn't on the list. So if we have a craving for cookies we can get those. This makes the shopping trip a bit more fun because you can feel good about sticking to the list and get a little reward without breaking the bank.

3) Don't shop when you're hungry. This makes list shopping even more difficult because everything you walk by looks delicious. Even if you have a small snack before heading to the store it will make the trip up and down each aisle less tempting.

4) Check for coupons in the paper and online. This doesn't mean you have to buy only items for which there is a coupon. It simply means there are coupons available for so many items and you're likely buying one of them on any given trip. So take 10 minutes and do some searching because those $0.40 coupons add up (especially if your store doubles or triples coupons).

These tips ought to help some of you out there shave a bit off your food budget. My girlfriend and I spend about $80-$90 each time we go to the store, which means we're eating for around $6/day. But that doesn't mean we're eating canned ham - our meals include salmon, steak, pork chops, fruits and vegetables.

So do yourself a favor and analyze your grocery store habits and see where you could make some small changes and possibly save big time!

I'm on a 168 hour break, so until then Stay Tuned...

06 November 2009

Plan for the Unexpected......

Joseph Henry Smith
June 1, 1974 - June 22, 2008

Today's subject may seem off topic or something you shouldn't have to think about for many years .... but I am going to tell you a true story and the nightmare that has followed.

A year and half ago my 34 year old cousin was killed in an instant in a
motorcycle/automobile accident. This was not his fault, he was wearing a helmet, leather jacket and jeans on a hot June day. The driver of the car a 79 year old women turned right in front of him. If this wasn't tragic enough - He did not have a will or life insurance. Since he did not have a will his estate has to go through probate.

Probate is the legal process of administering the estate of a deceased person by resolving all claims and distributing the deceased person's asset's.

If he had a will - he could have had his asset's distributed to the people or organization's that he choose. Not having a will - the decision goes to the courts.

Here is the tragic part of this story. Joe had not been in contact with his biological father for over 15 years. His father was extremely abusive and he had cut all ties.

Being that he died without a will - his mother and father equally are entitled to what is left in his estate. Something that Joe would NEVER have wanted.

Had he had a will this could have been wrapped up in a few months - distributed the way he would have wanted and not had the courts, lawyers and every detail of his life examined by the courts. 18 months have gone by and it is still not resolved. His mother, who Joe was very close with has had to deal with the fact that her only child has passed away and is left dealing with an unreasonable ex husband. The loss of her son was more than she could handle but the fact that she has to continually relive his accident and fight to get this finished - is unbearable.

The one simple act you can do right now is - get a will. You can get one done on line with
Legalzoom for under $100. If your family has an attorney - that is another option although it might be a bit more expensive. The main point is to have a legal document that will state your intentions if something should happen to you. If you have children - stop reading right now and go get a will. Are you really willing to leave it up to the courts - what happens to your children?

Secondly, he should have had
life insurance. As a young person it is very very inexpensive to get about $100,000 in insurance. That will cover your funeral expenses and cover your debts. If your parents have co-signed student loans for you - they will be responsible for the debt. Life insurance can alleviate that additional burden. If you have children - you should have more insurance as you need to leave money to have them taken care of. If your spouse is left without your income and now has additional expenses, as well as, being devastated by a sudden loss - life insurance will give a cushion to get them through the changes that will need to take place. It may be used to set up college funds, or just keep a roof over their heads. If you are a single parent - it is imperative that you have life insurance as the guardian of your children will have many changes to incorporate them into their lives.

We never want to think about our mortality but it is a reality. As part of Generation Millionaire - these are responsible actions to take and we can be assured that our wishes our followed and we don't leave loved ones in additional turmoil.

We miss Joe everyday and cherish the memories. Godspeed Joe

Stay tuned......

04 November 2009

College Programming - Student Activity

We have just arrived home after visiting Maui Community College and then going to two College Programming Conferences. We have talked with many many students and advisers about the importance of our presentation. We understand the need for fun and stress relieving programs i.e. bands, magicians, poets, and comedians. We are just asking that the schools commit at least one program to educating their students on becoming financially independent in their lives.
The conferences are all about information and fun. The students learn how to pick amongst many very talented people who is best for their school and it's mission. There is networking, educational sessions, numerous show cases acts to see the artists at their best. Long days, little sleep and alot of smiles.

They have budgets and are responsible for bringing programs to their schools that will benefit their student body. Whether a night of fun and stress release or an entertaining yet powerful message about personal growth.

The students go home with bags full of novelty items and memories. Once they get back to school - the tough part begins - who do you bring to your campus? There are many talented individuals and so many different options.

They walk away from the conference with new skills, they learn about bringing in big programs to their schools, budgets, scheduling, negotiating, and balancing the schedule for the campus to ensure variety.

In the end many memories are made, relationships formed and we all want this generation to be successful and live a balanced passion filled life. Thanks to all the students who came to our showcase, stopped by our booth and smiled at us as they passed us in the hallways!
We hope to see you at your college soon!
Stay tuned........

site design: