I'm just a local business and finance nerd looking to help people get educated about small business, marketing, and personal finance! I write about anything and everything that I can tie into those themes. I'm also Central Florida's only Kilted Realtor, so I write about Real Estate too! Check out my About Me page to see the origins of Cash Flow Celt.
Conquering Your Financial Empire
Hey everyone, I’m a Millennial. Rather shocking I’m sure. It’s amazing a young fella like me can find time to write a blog in between stuffing myself with avocado toast and mochachinnos and working 24 hours a week. If you didn’t catch the reference, you’ve probably avoided reading the news in the last week. Click the link to catch up. A brief recap: Aussie developer Tim Gurner said that, in no short sum of words, the biggest obstacle Millennials face in wealth creation and home ownership is themselves.
Needless to say, I’m rather perturbed by Gurner’s assessment. I know personally, I’m not the preferred audience of his Millennial bashing. I am an educated, money-saving, hustler. Heck, I get mad when my kid only eats half of his $7 kid’s meal! I only want to pay $3.50! It’s not the words that upset me. It’s the perspective. Gurner is intentionally ignoring all of the data that says, even though he’s only a decade older than me, he entered a vastly different marketplace than I did – in terms of both home prices and opportunities. Continue reading
One of the major reasons I started this blog was because my friends asked for it. Many of them asked for it because they were entering, or finishing, law school and were faced with enormous debt loads and were coming to an age where they were becoming classier consumers. Trading in their futons and beanbag chairs for sofas and dining tables. While they sought practical applications for money, what they were really asking for was how to become more financially literate. An important topic for upcoming professionals that need to fund retirement 40 years down the road.
Financial literacy has been an avid passion of mine for many years. Advocating the benefits and small research costs involved is something I do for pleasure. It’s why I got the title of the money guy in my sphere of influence. Much to my chagrin though, financial literacy rates are still garbage in America. I was reminded of this fact while listening to NPR when they had a segment on the topic. While listening, all I could think about was a paper out of Wharton School of Business on the topic (you can read the overview of it here). This paper described the dire state of financial literacy in America and abroad.
Consequently, I thought a paper on the value of financial literacy might be in order. Continue reading
Personal finance is an everyday endeavor. It is present in nearly every decision you make from the time you get up; to the time you go to bed. Ironically, because finances are so ingrained into our daily living it actually becomes harder to do well by your budget. Imagine having to whip out an Excel spreadsheet every time you wanted Starbucks over making coffee at home. Seems ridiculous doesn’t it?
However, just because it’s impractical doesn’t mean we should ignore our finances until the end of the month. Finding the right balance between thrift and fun is just part of the struggle. That said, there are a few “constants” in personal finance. A budget is by far the most important, but you may be surprised at some others. That’s why I wanted to share this article with you all. It’s the six ways you’re ruining your finances without even knowing it! Continue reading
I’ve written before about how I’m paying extra payments on my car loan because of the higher than average interest rate. Well, as of July 7th of 2016, I officially own my car outright with no lien. I still had just under $1,000 left to pay on it; however, with lack of faith in the stock market upcoming, I decided to deploy my capital and pay off a loan that was costing me 5.65% a year. At the end of it all, I was expected to pay $534 in interest on the loan and I only paid $215. I saved $319 by paying early!
While I did finance my car, I don’t actually recommend it. You buy a new car for $15,000 and you’re feeling good. Then, when you arrive home, you realize your new car has a $15,000 loan on a $12,000 asset. That’s depressing. Yet a car is a necessity in many areas. I could not function properly in Florida because our public transportation isn’t adequate for daily living. As the King or Queen to your own financial empire, how do you protect yourself from such a dastardly good? Read on financial conquerors, read on. Continue reading
Talk to anyone and they’ll tell you a high score is a good credit score. Press them any further, and they may not have much insight into how else a good credit score benefits you. Essentially, a credit score is an investment grade for people. Just as we rate government and junk bonds, and restrict IRA’s to “investment grade” options, banks and other lenders need a way to tell if lending credit to a person will be a good or bad decision. This decision isn’t a function of how much they’ll make, but rather if they’ll get their money back – a good credit score is a quick signal to them that, you’re worth it to them.
In my last post, I talked about how I got my credit score from 500 to 720. Because I wanted to be extra helpful I even broke down the composition of a good credit score, so I highly encourage any readers to check that out as well. In this post, I wanted to let you all know the great benefits of keeping your credit score up. There are many different advantages and many are not that obvious.
I’ve been thinking about my credit score recently. I purchased my car last year and will have it paid off in the next two months by paying additional payments. My interest rate was 5.6%, so the opportunity cost to pay the scheduled payments over 48 months was very high which is why I am paying it off early. However, with that loan ending, I would only have two credit lines open – student loans and my one credit card. Having just one installment and one revolving credit account open could negatively impact my chances at getting credit financing because I wouldn’t have enough history on my account.
To remedy this problem, I’ve been researching additional credit cards. I finally chose the one I wanted and it’s a solid complement to the one I already have. After applying and being approved for the card I chose, it noted I had a 727 credit score. 727!? Woohoo! That means since I purchased my car last February I went from a 500 credit score up to 727 on just three accounts.
The American Dream: a two story manor house with white picket fence, two and a half kids, and a Golden Retriever. It’s picturesque. For many Millenials, it remains just a picture because student loan debt, tightening credit standards, and home prices vs wage increases have priced them out of the real estate market. A mortgage is simply out of the question.
However, the market is changing. The National Association of Realtors has multiple guides on how to deal with Millenial buyers. This is because, for the first time, Millenials are about to be the dominant buyer in the market. Sadly, this has less to do with improving wages and debt levels than it does a demographic inevitability. The median age to buy a home is currently sitting at 31 years old; Millenials sit comfortably in there with ages going from 16-35. We’re just “getting to that age” where one buys a home. Still though, through multiple surveys coming from Gallup and the Realtors Association, many Millenials still feel underprepared and overwhelmed with the prospect of home ownership. How do we afford them without a down payment? How will we get approved with student loans? Where the heck is Chip and Joanna Gaines to find my dream home!? All valid questions. Continue reading
I’ve come down hard on credit before, but it’s actually an incredibly useful tool if used correctly. With credit, you can make purchases that were otherwise unavailable (like an investment home), it can be an effective tool to manage your monthly cash flow, and when used in finance, you can make larger real gains (because the debt is fixed, but your overall earnings are larger. Those are the good things about credit.
Credit can also ruin your life. Credit, by its definition, means using money you don’t have. It does have to be paid back. By overextending yourself and having too much debt, you put yourself at a huge risk to not be able to pay it back and be forced into bankruptcy. That’s essentially what happened to Lehman Brothers and Bear Stearns during the 2008 Financial Crisis and what happens to countless consumers through credit cards.
In order to get credit, you must qualify for credit. Sadly, credit is not gifted to you by a Credit Fairy who comes in at night and leaves you a shiny, plastic card under your pillow if she likes you. It’s given by banks or other various lenders who go through a risk determination process called underwriting where they decide if 1. You qualify and 2. What their premium (read: interest rate) will be. Continue reading
Jamie Dimon, CEO of JP Morgan, spoke at a financial conference two weeks ago and said some interesting things. One thing that stuck out for me was his comment about American consumer health. He said we’re doing great in terms of debt. That’s what he said; what he meant was Americans are paying off their debts, and his vacations, at a steady pace. Banks track all kinds of metrics when it comes to consumer debt; however, the most important is months paid. Banks do not want you to default – best case scenario for them is when you pay the minimum payment for the life of the loan. A $5,000 credit card bill, at 18% and just paying the minimum payment, will take nearly 23 years to pay off and you’ll pay an additional $6900 in interest on top of the original balance. Ouch!
Because debt is such a huge financial killer, it tends to be a pretty common question asked by my friends. Usually, it comes with many parts – like, “how do I pay off debt AND save for retirement?” It’s a valid question. It can seem impossible to save for retirement or even a tiny emergency fund when you have revolving credit card debt at 18% looming over your head. So, here’s my method. Continue reading