Monthly Archives: November 2016

Would Should You Do When PERFECT Credit Score

I’m in the military. People around the office ask me for for financial advice. They know I’m a “money guy” and word gets around that I like talking investing and real estate.

I warn people they won’t like my advice. They usually don’t.

This guy didn’t.

Recently a co-worker told me he’s got $20,000 burning a hole in his pocket, and what I think about investing in the British Pound. With the Brexit, it seems like a sure thing!

I told him this kind of speculation in currency isn’t for everyone. Even those who devote their lives to studying this are wrong more often then right. I warned him this would be a fun way to lose money quickly on something he doesn’t understand. It seemed like he took that to heart.

Guy: “Ok, I got a better idea! What about gold!?!?!?”

Me: Shit. (silently in my head)

I told him I have a different approach to investing. With an extra $20k and with no debt (awesome), consider fully funding retirement accounts first.

Guy: “O no, I still have debt!”

Me: How much?

Guy: $20,000 in credit cards.

Me: Pay off your credit cards. Then we’ll talk.

Guy: Won’t paying off my cards ruin my credit?

Me: WTF are you talking about?

Guy: A financial advisor told me to carry credit card debt to boost my credit score.

WHAT THE!!!!!!

This is a high-ranking, intelligent military member.

Who spreads this crap around? The idea of taking out debt on purpose to raise your credit score so you can qualify for more debt sounds stupid if you say it out loud a few times.

I remember in college how I was targeted by credit card companies that told me their cards would help build my credit. They set up booths on campus with attractive woman giving out gifts for signups.

Yes, they gave me some free shit when I signed up (frisbee), but I didn’t read the fine print, and paid annual fees and high interest.  I maxed them out and paid late fees a few times.  CREDIT ROCKS!!!!!

Debt and know more about it

Oh, hi. I’m assuming 90% of you are here because you saw the title of this blog, had a mini fit, thought about how stupid the writer must be, and well, now you’re here shaking your head and fuming even further.

When I say “good debt” doesn’t exist, most people fire back with the usual responses like:

  • My student loans ended up tripling my income.
  • My mortgage provides me with a roof over my head
  • Investments, my business, my blah blah blah blah and one more blah for “good” measure.

These are all great things. I mean, do I have anything against people who take out student loans for a career that will help them become financially successful?
No. In fact, I did the same.

Do I have anything against people who take out a mortgage on a home that they needed, wanted, and could afford?
No. I’m actually pretty jealous.

But do I have a problem with you (yeah, all of you) who say that some types of debt are good? Yup.

Why? Because of the following sentence I once heard someone (AKA Preet Banerjee) say:

Calling it bad debt and good debt is like calling it good sh*t or bad sh*t. At the end of the day, it’s all still sh*t.

When I tossed the question out to my internet friends, asking what “good debt” was, most of their responses were what I mentioned above.

In my personal (and charming) opinion, one of the worst ones anyone will ever tell you is “the best one” is a mortgage.

I mean yes, I’m happy for you and your home. But what makes us think we can just call that good debt?
Is it the BEST POSSIBLE investment you can make? No. Absolutely not. But is it an investment none the less? Yes.

A house is the one I could argue the most. I mean, if we’re going to call anything “good debt” here (which we’re not), it’s the investment that increased your net worth by a lot more than this:

“Over 30 years, stocks made 8.5 per cent and houses 5.5 per cent.”

So maybe “good debt” isn’t a thing at all. Maybe instead we should call these “good debts” investments, or better yet, side effects of bad and good investments.
Because just tossing an adjective in front of the word debt is pretty easy to do.

 

Exhibit A

Happy Debt: The type of debt where it’s still debt but it made you happy for a split second in time.

LOOK AT ME, I coined a term.

Maybe the idea was invented by some insanely brilliant marketing agency who was trying to sell the first piece of property ever.

“You know what would go great with that cave, sir? A ridiculously high mortgage.”

Money on dating

Samantha: When we first dated, in Toledo, it was cheaper. We would go on dates a lot, and he would pay. But now that we’ve moved to L.A., and it’s kind of pricey, and we’re budgeting, it’s just easier if we do everything 50-50. I think that started with the first meal, seriously. But my reaction was like—I understood it.

Branden: She understands that I have a lot more bills, and that I’m investing in something that is risky as hell. The band is called Bonavega. I never want to turn down a music opportunity. It’s like I need to put all of my eggs in that basket right now, because in another five years it’s going to be a lot, lot harder. I’ve got this span of time where I just have to f—ing laser focus. I’m in the right spot, where if you hit the jackpot, you can really, really go far.

Samantha: He has a new video coming out that’s super high-quality, and it’s going to blow the other ones away.

Branden: She’s overly honest. Imagewise, I almost always take her advice, because she knows what she’s talking about. She’s supportive, and I like letting her take the reins in some things, because I’m in a relationship with her and I need her support. So I totally let her run with ideas. She actually lent me money at first.

Samantha: I definitely feel like I’m invested in Bonavega in some way. I would feel—I would want to kill him if he made it big and then we didn’t date anymore, because I basically am the mastermind behind it all. So it would be an issue.