Tag Archives: personal growth

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Lessons from 5 Years of Credit Repair

One of my companies is getting ready to make a big push at expanding nationwide. In order to finance this, I will once again be applying for a business loan. Because of my efforts at credit repair over the past few years, I am now in the top tier of credit scores, and I expect to be approved easily at a low interest rate.

I thought I would take this opportunity to reflect on the past 5 years of credit repair for myself, my friends, and my clients. And really, when I say “credit repair,” I mean the entire process of climbing up the credit ladder from the worst possible situation (my scores were 500 at Experian, 463 at Equifax, and 466 at TransUnion), getting negative entries removed from my credit report, getting a credit card again, getting an installment loan, being diligent and disciplined about those loans, building positive credit, and eventually arriving at the top tier (760-850 range; any score in this range will get you the lowest interest rates).

I have succeeded at repairing my credit and climbing to the highest rung of the credit ladder, where I have the possibility of using my excellent credit to build my businesses and buy real estate, thereby growing lasting wealth for my family for years–even generations–to come.

I’ve also helped other people do the same. I’ve met with a lot of people at a financial low point in their lives. And while I’d like to say that every single one of them has followed my example and made a complete turnaround, that’s not the case. Some have listened to me and read about my system, but after experiencing an initial surge of inspiration and enthusiasm, fallen back into their old habits of missing payments, and soon it’s as if they had never even attempted credit repair. It’s like ballooning back up to your old weight after losing a few pounds on a crash diet.

So I’ve been reflecting back on the past 5 years with the goal of committing to paper exactly what separates the winners from the losers. Above all else, I’m convinced that it is a few character traits, and not any specific nitty-gritty tactic like how you word your dispute letters to the credit bureaus.

Here’s what I’ve learned:

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Reflections on the IRS and Ashley Madison Data Breaches

We covered the IRS data breach earlier this week, but I haven’t mentioned the hacking incident of Ashley Madison, a website that facilitates adultery. Last month, hackers managed to steal the user names, passwords, and even credit card info for 32 million users of the site. Here’s an article from Wired.com.

Given that the “social network” is a hub for cheating spouses, this will have ramifications far beyond the usual identity theft.

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One in Five Americans Isn’t Saving Anything

For my regular readers, this will come as no surprise. From CNN Money:

Roughly half of Americans are saving 5% or less of their incomes, including 18% that are not saving anything, according to a survey from Bankrate. Only about a quarter of people are saving more than 10% of their earnings.

I have a problem with the way they presented the survey, lumping people saving >5% in with those saving nothing. Making the transition from non-saver to saver is the most important step you’ll ever take in your financial life, even if you’re only saving 1%. Saving small is a starting place; in time, as you develop better habits and are able to watch your savings grow, it will be easier to save a larger portion of each paycheck.

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Why Cutting out Lattes Won’t Improve Your Finances

It seems like up until a few years ago, personal finance literature focused on getting people to give up overpriced luxury items like Starbuck’s coffee.

The argument went like this: if you buy 5 of those lattes a week at $4 each, that’s $1,040 per year you’re spending on coffee. If you contributed that $1,040 to your IRA instead, after 40 years you’d have $222,154. Therefore, giving up coffee will make you $222,154 richer. Case closed.

The math is alluring, but somewhere between theory and reality there’s a breakdown. My favorite retort to this kind of logic is the following from Reddit:

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Tragic Story of Latest Powerball Winner

From Marketwatch:

“I don’t have to worry about the word ‘struggle’ no more, and neither do they,” she said. “I just want them to understand that money doesn’t change you, but it can help you, so they don’t have to worry about debt, none of that. They can go to college; they don’t have to worry about nothing. And I’m glad that I can do that for them.”

Such a strange juxtaposition. On one hand, she says money doesn’t change you. True. But then she said that her children won’t have to worry about debt any more. That’s false. If money doesn’t change you, and you’re in debt now, then you’ll find a way to get back in debt even after a $100 million+ payday.

Without the right mindset and habits around money, you will always be living paycheck to paycheck–no matter how big that paycheck is.

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Checking In: New Year’s Resolutions

As I’ve written before, I’m a big fan of New Year’s resolutions. Studies have shown that people who make resolutions are much more successful than people who don’t.

But goals like this aren’t one-offs; it’s not about getting it right the first time and never thinking about it again. How you readjust and get back on track is the most important part. It’s more of a dance than just being perfect and getting it right the first time. Mastering the art of goals requires you to recalibrate when you get off track.

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Playing the Game of Saving Money

When you think about it, there are lots of ways to put money into savings:

You could deposit money into a savings account manually.

You could automate the process so that part of your paycheck is put into a savings account each month.

Et cetera.

Here’s my favorite way. (It could actually be thousands of different ways: it’s an open-ended invitation)

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How $50/Month Can Make You Richer than a Hedge Fund Manager

My line of work has given me inside access to the financial habits of many, many people. From starving college students to the rich and famous, I have had the opportunity to peer into what money habits really look like for a wide cross section of society.

If I could distill all that into just one observation, it would be that no one is doing as well as you think. I’m thinking specifically of a couple of very rich people I’ve met over the course of the past two years or so. Both worked in high finance. One was a former hedge fund manager.

Both of these guys were in serious financial trouble. They weren’t going to make it through the recession unscathed. They were looking at a major restructuring of their lifestyle. One was facing foreclosure. Think the job market is tough for ex-factory workers? Try being an ex-hedge fund manager.

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What’s Better than Predicting the Future?

Benjamin Graham was the most successful investor the world has ever known. Over the twenty-year period from 1936 to 1956, he achieved a 20% annual return on his stock investments (vs a 12.2% return for the market overall). Legendary investor Warren Buffett was one of Graham’s proteges, and called him the most influential figure in his life after his own father.

Don’t worry, this post isn’t about investing or the stock market. It’s about a principle that Benjamin Graham wrote about in his magnum opus The Intelligent Investor that can be applied to virtually every area of your life (but most especially your financial life).

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Do You Care that the 1% Owns Half the Wealth?

From The Guardian:

Billionaires and politicians gathering in Switzerland this week will come under pressure to tackle rising inequality after a study found that – on current trends – by next year, 1% of the world’s population will own more wealth than the other 99%.

I’ve got to say, whatever your politics are, complaining about how much money someone else has is no way to go through life. At best, that kind of envy is petty; at worst, it is a sin.