Does This Video Help You Understand "What is a Credit Bureau?"

I found this video on youtube. I wonder if people learn anything they didn't already know. Let me know.

The Richest Man in Bablyon: The 5 Laws of Gold

I recently read the Grandfather of all "grow rich" books. The book is titled, "The Richest Man in Babylon". It was written by George S. Claxon. The first important lesson in the book is the 5 Laws of Gold. To save you time, I will give these to you right now.

1. Gold cometh gladly and in increasing quantity to any man who will put by not less than one-tenth of his earnings to create an estate for his future and that of his family.

2. Gold laboreth diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field.

3. Gold clingeth to the protection of the cautious owner who invests it under the advice of wise men in its handling.

4. Gold slippeth away from the man who invests it in businesses or purposes with which he is not familiar or which are not approved by those skilled in its keeping.

5. Gold flees the man who would force it to impossible earnings or who followeth the advice of tricksters and schemers or who trusts it to his own inexperience and romantic desires in investment.

Sound financial advice that is used by everyone including Rich Dad Poor Dad and others.

Are You a Slave or Freeman?

If you have any debts, you are a slave to that company. Think about it. You are working to earn money to pay your bills. For each bill you have, you are basically working for them. You cable bill $100, you are a slave for Comcast. Your car loan is $300 per month, you are a slave to your bank. The way you break the chains is to pay off all your debts and start paying yourself. Pay your self by saving your money, investing your money, and wisely spending money you have. Slave or free man...your choice...

You know you are spending too much when...

You know you are spending too much when you have to borrow to pay other debts...
You know you are spending too much when you cannot even make all the minumum payments on your credit cards...
You know you are spending too much when you eat out more than you eat in...
You know you are spending too much when your car payment is greater than your rent or mortgage...
You know you are spending too much when your bar tab exceeds the amount you saved from your last paycheck...

Remember, there is no shame in having debt if you are paying it back with the intention of paying it off as quickly as possible. Americans are saving less now that ever before. It is important that we as a nation put more emphasis on sound financial planning. The more of our fellow citizens that our financially fit, the better off the country will be as a whole.

Book Review: Rich Dad, Poor Dad

I first heard about this book some time ago, but never felt the desire to read it until recently. I was looking on amazon for a Christmas gift for my father-in-law. I came across this book and began to read the reviews. I liked what I read and made the purchase. I soon wanted to read the book myself even though he had not started it yet. Well, I can tell you after reading the book, I should have read it a long time ago.

This book is filled with great lessons about financial intelligence. They are presented in a fun and interesting way to teach you principles that will help you become rich. The key message in the book is that most people work to make money while the rich makes money work for them. This is accomplished by only buying money producing assets, not liabilities.

Overall, I highly recommend this book to all my readers. It will open your eyes and help you understand how money works. Because you need to understand how money works if you ever want to be rich. That is the secret. Enjoy!

So You Have Spent All Your Money on Christmas Presents, Now What...

Many Americans woke up Friday morning before the sun was up, got in line at a retailer, and when the doors flew open grabbed everything they wanted and paid for it with money they did not have. I personally know people who have financial troubles but somehow found $500 or $1k to buy Christmas gifts. If you have to take out debt to buy Christmas presents, what is the point? You are creating a bigger hole for you to big yourself out of and this stuff is not even for you! You are just going to give it away! If this is you, WAKE UP! You are under no obligation to buy gifts for anyone. If a friend or family member gives you a hard time about you not giving them a gift, then they are not truly a friend OR family to you. If someone really cares about you, they will not let you do something so detrimental to your well-being.

Remember, spend only what you have, not what you want to spend. If you have any debt, give yourself the greatest Christmas present of all and pay down you debt.

Do Not Go Into Debt to Buy Gifts...

Whether it is for Christmas, Anniversary, Birthday, House Warming, or any other occasion, people tend to spend way too much. Don't get me wrong, it is a great thing to give a gift. It shows you care, love, and/or respect the recipient. The mistake that most people make is they use a credit card or take out a loan because they do not have the money.

There are many times I have had people come into my office and say to me, "I need a loan to buy (someone) a gift." Do you ever ask someone how they paid for a gift? No, we never do. So it is up to the purchaser to be responsible for their finances. I can guarantee you that no matter what you get someone, they are going to appreciate it. If they don't like it, then most likely they will keep from saying anything anyways. Plus if they were the type of person to look down on your for the kind of gift you got them, are they worth keeping as a friend, girl/boy friend, or partner?

So my advice, try giving a gift that has a low price tag but is high on thought and creativity. Here are some examples:

*99 Cent cards at most retailers like Wal-Mart and CVS: This will allow you to not spend a lot, but also you can write in a clever poem, story, or anything pithy comment that you think the recipient will cherish.

*Candy: The right candy will go a long way. If you know what there favorite candy is, get them a $2 -$3 bag of their favorite. They will love it!

*House Warming Gifts: The most inexpensive gift is to ask the host if you can bring some soda, chips, cookies, etc. that will help them provide the food, and save you some dough!

There are many other ways to save. Stay tuned later in the year when I will give you some money saving tips around Christmas!

Seven Questions You Need to Ask Your Loan Officer

Most consumers who get loans rarely ask any questions. They walk in, sign the documents and start making payments. There are things that consumers need to know in order to understand what exactly they are signing. A great number of consumers with loans cannot tell you what their interest rate is or the term of the loan. This is an unfortunate situation that costs many consumers thousands of dollars each year. Here are seven questions that every consumer needs to ask about their loan before signing the dotted line.

What is the interest rate?

Some consumers do not care what the interest rate is as long as they like the monthly payment amount. This is a common mistake made by many consumers each day. Often times, you can get a shorter term and lower interest rate if you are willing to pay a little bit more each month. It may slightly raise your monthly payment, but you could be saving yourself some serious money.

Are there any discounts I can receive on the interest rate?

In this fast pace world, loan officers sometimes forget to apply available discounts to loans. Many financial institutions offer discounts on the interest rate if you have other relationships with them like a checking or savings account, direct deposit, or sign up for automatic payments.

Does this include any add-ons or additional products?

There could be add-ons including extended warranties that will cover the vehicle mechanically for a set period or GAP protection which covers the difference between your loan balance and what the insurance company pays you in a total loss situation. These add-ons sometimes can be beneficial, but you should weigh the costs with the benefits. Just make sure to find out how much each one costs before agreeing to it.

If I pay more than the minimum payment each month, does it go towards principal?

It is good to know that if you want to pay extra each month that it goes towards principle and not against your next payment due. Some lending institutions have default settings that will only reduce your next payment due instead of having the difference automatically apply to principal. This is because as you pay down the principal, you are saving interest. As you save interest, they make less money. So make sure to ask the bank this important question. If the extra cash you throw in each month does not reduce your principal, you should probably put that extra cash towards your credit cards or to loans that any additional payments actually reduce your principal.

Is there any pre-payment penalty?

Sometimes deals can seem too good to be true. This is the case with pre-payment penalties. Pre-payment penalties are fees imposed by the lender if the consumer pays off a loan before a certain time has been reached. This is in place to ensure that lending institutions that have costs associated with making loans get some type of payback on that investment. These kind of fees are especially common if the lender covers your closing costs or in another words if you have a zero-closing-cost loan. Prepayment penalties are good for lenders, but bad for unwitting consumers who try to pay off loans early. If you are faced with getting a loan with a pre-payment penalty, make sure to ask when the provision expires and to explore all other options before signing.

What options do I have if I cannot make one of my payments by the end of the grace period?

It is always good to know how financial institutions handle this situation. The grace period is the period starting when your payment is due and ends the last day you can make a payment without a late fee. Some institutions have generous grace periods and even options on skipping payments if you had some unexpected bills come up. There usually is a small fee, but it beats being late. Be sure to know all the options you have and who to talk to if the need arises.

Do you report information to the credit bureaus?

For credit conscious consumers, it is important to know that your payment history will be reported to all three credit bureaus. It is common for some loan products to skip the whole credit reporting process. It would be a shame to make years of on time payments and not have anything to show for it. If it is not being reported, it never really happened.

Keep these seven things in mind when you go to close on your loan. Asking the right questions will save you some serious money!

Quick Tip on Paying Down Credit Card Debt

Paying just the minimum payments on all your credit cards means that it will take you years to pay off the balance....5, 10, sometimes 20 years! If you look at your monthly credit card statements, it will tell you how long it will take to pay off the debt just making minimum payments. For those of you trying to pay down your credit card debt, here are some quick helpful tips to help you pay them off as quickly as possible.

First, you need to write down your balances on each card along with the interest rate being charged on each debt. This will allow you to come up with a plan of attack to pay your credit cards off quicker.

Now, instead of paying cards randomly, you need to start paying just the minimum payments on your lowest interest rate debt and apply the most money you can to the debt with the highest interest rate. This will help you tackle your debt faster because you are paying down the most expensive debt first.

After you pay that debt off, move to the next highest debt and repeat until your debt is paid off completely.

The Three Credit Bureaus

When it comes to personal credit in the United States, there are three companies that make up the credit reporting bureaus: Equifax, Experian, and Transunion. These three companies issue scores based on your credit information. Now, I will not go into the details on each company, but your score with each company will be different. This has to do with the differences in the information about you that is reported to each bureau.

I recommend obtaining a complete copy of your credit report from all three bureaus once a year. The best place to go is www.annualcreditreport.com which was established by the credit reporting companies in accordance with the Fair and Accurate Credit Transactions Act or FACT Act. Here is a tip! Since the information reported to each credit bureau is similar, request one free report every four months. That way you are spreading it out over the year and more likely to catch any discrepancies quicker.

Check out my Credit Score Power eTips which is a list of specific actions I have used to help hundreds of people increase their credit score immediately and for the long term!