I believe that understanding the ins and outs of managing our finances is essential in our quest for leveling up in life. After all, what good is achieving our dreams if we're not equipped with the knowledge and tools to sustain and grow our success? So how did I do it?
1. Living with parents while in school
While I had the advantage of fewer bills to pay, I still encountered challenges in managing my finances effectively. In the past, I used to blow money like it was nothing, with little to no savings to show for it. However, recognizing the opportunity to change my habits, I embarked on a journey of financial education, starting with reading "Rich Dad Poor Dad" by Robert Kiyosaki. Over the course of 6-12 months, I diligently saved and invested most of my income, laying the groundwork for my financial future. This disciplined approach not only helped me build a healthy relationship with money but also demonstrated to the bank that I was responsible and capable of handling a credit card. It was only after this period of financial growth and learning that I felt confident enough to apply for my first credit card. After being rejected 3 times prior!
2. Become Delusional as F**k
The biggest change in my relationship with money came when I realized that it's not inherently bad; I have a good relationship with money, and money works for me—this is my reality i lived in even during the times I was broke. I remained delusional in my belief that financialsuccess for me was attainable, and remarkably, it worked. This perspective empowered me to view money as a tool for creating wealth rather than something to fear. I learned to use a credit card to work for me, not as a slave to debt, and discovered how to leverage debt to make more money. This shift in mindset helped me overcome financial fears and embrace opportunities for growth.
For more financial literacy context read these posts
Escape Your 9-5 Job If You Don’t Want to Work
“Make Money When your Young, Pretty & Ambitious.”
How to make a credit card work for you
Keep Low Credit Utilization:
Aim to keep your credit card balances low relative to your credit limits. This utilization ratio should ideally be below 30%, with lower percentages being even better. High credit utilization can negatively impact your credit score.
Pay On Time, DONT MISS PAYMENTS
Consistently paying your credit card bills on time is crucial for maintaining a high credit score. Late payments can significantly damage your credit score and stay on your credit report for years.
Keep Old Accounts Open:
The length of your credit history is an essential factor in determining your credit score. Keeping old credit card accounts open, even if you're not actively using them, can help lengthen your credit history and improve your score.
Monitor Your Credit Report:
Reviewing your credit report allows you to identify any errors or inaccuracies that could be negatively impacting your score. You're entitled to a free credit report from each of the major credit bureaus—Equifax, Experian, and TransUnion—once every 12 months.
Avoid Closing Old Accounts
Closing old credit card accounts can shorten your credit history and reduce your overall available credit, both of which can lower your credit score. Unless the account carries high fees or you're unable to manage it responsibly, consider keeping it open.
Conclusion:
Through disciplined financial habits and strategic planning, I achieved and maintained a high credit score. This journey is only the beginning of my commitment to financial responsibility. For more insights on financial literacy, be sure to check out my other posts. Remember, with dedication and planning, anyone can achieve their financial goals
some interesting history I learned today: how Lehman’s racist origins ultimately killed their bank 160 years later.
Lehman Brothers was one of the biggest investment banks and it came crashing down during the 2008 crisis. A lot of people know this crisis has to do with mortgages but don’t know exactly how it works. In short, predatory lenders were harassing people for years convincing them to “refinance” their house. Say I have a $100,000 house that I’ve paid the mortgage for 15 years so I own 50% of it (the bank that made the loan owns the other 50%). So I have $50,000 in equity on the house. What these predatory lenders would do was to harass people to do this deal: the lender would give them $50,000 in exchange for the equity. So you’d go from half owning your house to not owning it at all. People would do this to maybe send a kid to school or pay a medical bill. But the new loan you got was HORRIBLE and impossible to pay. Which means you lose your house if you miss payments.
Well this all was awful, so why was it allowed? Well, because for 20 years before the crisis these lenders had targeted only black neighborhoods for this. They perfected these process by stripping houses from black homeowners. So while yes the majority of people who lost their houses in 2008 were white, black and latino homeowners were disproportionally affected. For 20 years community organizers were warning legislators about what was being done to black communities and no one in power did anything. It wasn’t their communities, they didn’t care. The crisis could have been avoided if people had listened.
Lehman would buy these loans which (to summarize a lot) means that they were the ones keeping these businesses going. They made insane amounts of money by financing these lenders that were convincing black people to take bad loans (even when they had excellent credit and could qualify for a premium loan).
This wasn’t the first time that Lehman was exploiting black people, however. The Lehman brothers that started the bank in 1847 made their fortune by buying cotton produced using slave labor in the South and reselling it in the North and in Europe. They made money by “cleaning up” the purchase: a northerner/european didn’t want to purchase from a plantation directly because supporting slavery was frowned upon there but they would happily buy the same exact product if it came from a “neutral” party.
Ultimately, the predatory lending Lehman supported was its demise as houses prices started to fall and its whole business structure crashed and burned. The same racism that founded them, burned them down.
Life overall has been a blessing for sure! I used to write on here depressing poetry. Now I have a wife I love and 2 beautiful children!
But even with these blessings, life is still hard. I fight every day to make sure my family is happy and healthy. I fight everyday to make it to work simply because when I wake up and see my son or my daughters eyes and they plead through those eyes to spend time with me, I still fight on. For without this job and without those struggles there would not be enough for food for these blessings. Or a home to call ours! I will not stop fighting for what I have accomplished and for my family and what is mine.
I am someone who will always do what he can and fight for more. But I love my wife and my children. I miss them everyday I go to work. I know they love me, but everyday I get home I don’t know how to play with them I only know how to ask questions and try to be involved with the toy they’re playing with at that moment or the picture book they’re turning the pages on. Even my kids with me prefer my wife, which I get, they’re young and she’s with them all day. But it still pangs me, that I only see them 3 hours a day and all day Sunday.
Now financially struggling this year also sucks. My job in itself was a blessing. I would not have been able to afford purchasing a home for my family without it. Been here 4 years now and just completed my first year in our first home. It’s not the largest. A small 2 bedroom townhouse built in the 70’s. All the neighbors can be heard unfortunately and the back yard neighbors can see into the kitchen but it’s comfortable enough. But back in June I get a call from my company’s HR department saying that they made a mistake on my raise in January and would owe the company a lot of money. Because yes the raise in January was very very very nice. I said to myself in January. Wow! We just purchased this home in September, 3 months of moving, closing costs, and also to find that the furnace was temporarily fixed for home inspection failed in October so HVAC repairs, we were living paycheck to paycheck in this home. I knew I would get a raise and it would alleviate the sense of barely scraping by. But when I saw my first check in January I said this awesome! I can not only afford my new home and support my family but I can pay off debt or use some extra money for investments! And that’s what I did. I added extra payments into my car, extra payments into some credit cards. I invested in some stocks that were reliable like Amazon, apple, and so on. I bought my son some hot wheels toys, he never had any and I loved them growing up. And now he loves them too! I treated my wife to a spa day before my daughter was born. And I had a plan that with that income. Come December 2020, I would be 90% debt free (not including mortgage and car payments.)
Now of course June comes and I get this news about my raise being wrong, I owe the company a lot of money. I told the HR rep that I wanted to speak to the owner and that I am unable to pay anything back as it was not my mistake. Long story short, the next paycheck was the same as before the raise and have been living paycheck to paycheck again. I know my problem financially was all this credit card debt from before I met my wife. I was dumb and just maxed everything out. Didn’t think anything of it. Some times I can put a little extra payments sometimes it’s just the minimum payment. Other times I can’t pay it at all with the way my paycheck comes in and the timing of the mortgage payment (which I refuse to be late or miss one of these payments) and food necessities. So I understand I’m to blame for living paycheck to paycheck and I hate putting my family through this. And I guess out of spite? Or payment? Or simply bad luck? I get transferred to a new building an hour further from my home and am now spending less time with my family. This happened the same time I said I cannot pay them back so who knows. When I suspected I would be going back to my old pay or a lower pay I was already looking into getting another job. But driving an hour to work every day and back now kills this idea because it would sacrifice the little time I already had with my family. I also took the last 6 months off from school as well. Yes I invested some of that extra income initially towards schooling for myself to be able to some day get a better job to support my family and now can’t even do that because I wouldn’t make it to class on time. I never went to college so I invested in my unionized HVAC school to help better my financial situation. But what can I do but keep fighting on. Struggling. Hoping the light of my family keeps me from breaking down and giving up.
Maybe I can be lucky and someone that reads this post has a home that’s paid off somewhere in oh I don’t know Kentucky? But has no one to leave the house to, no family. And doesn’t want the bank to take it when they pass on. Maybe I’ll be lucky enough to inherit something like this. Lol where I can put my family in a home that I know won’t be taken away. Saving almost $2000 a month on a mortgage and only having to pay taxes. But that’s cheating in life. So I know it’ll never happen. But I’ll keep fighting on and hopefully will find some kind of reprieve in the near future. So I can treat my wife to another spa day. So I can get my daughter that dress she may want in the future or my son those guitar lessons. Or even further! That wedding or that trip to machu pichu! Where they’ll come back and say thank you! Thank you papi for those guitar lessons or that dress.
Some businesses seeking coronavirus loans got to avoid flaky online portals or backed-up queues. Many other small businesses couldn’t get their loan requests submitted before the money dried up.
