My sig explained (finally..and it's a fricken' novel) - Page 11

spdfrek · 06-21-2005, 07:53 PM

I've found buying cheap things(like vehicles) dosen't save much money in the long run.My parents talked me out of buying a high miles pickup and into getting a low miles newer truck that wouldnt need repairs 6 months after I bought it.I'm 21,and i have about $1100 I owe on a creddit card.3/4 of that is because,long story short,I spent money before I had it,then the money never came.Guy still owe's me $525,and I dunno if I'll ever see it.So now,I'm selling a few toys to pay off what I owe.Speaking of which...theres an lcd in the f/s forum....:P

Amazing work on the debt wizard.My parents don't have a loan out on anything.Even when they bought a truck,the walked in and wrote out a check for it.We own our house,and everything else around here.Hopefully I can be the same when I'm their age.

RS3RS · 06-22-2005, 05:36 AM

Good luck with the whole debt thing man... Debt is a terrible thing to get into.

I'm only 17, so I have a fresh start, and I'm pretty much determined to never let myself get into debt... I'm sure everyone else in the world has said that when they are my age, but still, I'm going to try.

joedaddy · 06-23-2005, 07:48 PM

i work at one of the Big 3 credit firms as an analyst..
and i must recommend that you do NOT cancel your credit cards..
pay them off and cut them..but do not call to cancel.. that will help your credit considerably..

wizardPC · 06-23-2005, 08:55 PM

Quote: Originally Posted by joedaddy

i work at one of the Big 3 credit firms as an analyst..
and i must recommend that you do NOT cancel your credit cards..
pay them off and cut them..but do not call to cancel.. that will help your credit considerably..

You're not paying attention.

WHY would I need a credit score?

I don't borrow money anymore. Except maybe for a house, and in that case open credit cards with zero balances count against you. I used to work for a bank, and I know that to be true--Why?

Because the average behavior of a consumer who purchases a house and has lots of credit cards with nothing owed on them is going to go out an buy furniture, drapes, and new wallpaper with those nifty cards.

Isn't something like 70% of your credit score based on your willingness to stay in debt? That right there should tell you what a load of CRAP a FICO score is.

NiN^_^NiN · 06-23-2005, 11:12 PM

Glad to see everyone is on there way to finishing of there debt.

I was in the boat were i got $140 a week and $40 a week for petrol and had $100 left.

I was a REAL tightass for 2 years and i save up enough money for a deposit on my car.

I now am paying the car off quicker (only $5000 left from $10,000 in 1 year) and i've got lost of extra money left over (got a better job)

Now im still a tightass

but my money goes into a savings account (not through the bank) i trasfere half the money i earn every 2 weeks and put it into this account.

I get 5.45% interest in this account but i never ever have to pay any fee's and i can get the money out in less than a day.

After paying my car, phone, petrol lunch etc i split the money i have and put half into the saver account.

Hopefully in 4 years i'll have enough for a 300k house deposit.

I've made sure that I don't touch the money in the saver account so it's never touched and i save money.

I have been splurging lately but i've been a tight *** to get my dream car so i think splurging isn't so bad im only splurging whats left in my bank account and don't touch the savings account.

I can see how it's easy to fall into these traps I just avoided all credit cards and make 2 withdrawls each month to last me for 2 weeks so i only use cash.

Gives me the mentality of the cash in the hand is all i got

I really should get rid of the coins in my room i've got $152 something dollars in 5 10 and 20 cent coins lol

Im glad to see everyone is learning and trying there hardest to set themselfs free

BTW Im 21 so I don't have to much to worry about

R32 JUhl · 06-27-2005, 08:58 PM

Quote: Originally Posted by wizardPC

Isn't something like 70% of your credit score based on your willingness to stay in debt? That right there should tell you what a load of CRAP a FICO score is.

But sadly, your mortgage interest rate AS WELL AS your auto insurance rates are based on your FICO.

wizardPC · 06-27-2005, 09:33 PM

Quote: Originally Posted by R32 JUhl

But sadly, your mortgage interest rate AS WELL AS your auto insurance rates are based on your FICO.

Only a few companies do that, and if an insurance company wants to up my rates because I don't borrow money, then I'll go somewhere else. That's what a free market economy will get you. Zander Insurance, for example, does not base anything on a FICO score.

To those who might be reading this who DO think that a FICO score is necessary for survival, I'll ask this:

How did people survive 50 years ago, when there was no such thing as a FICO score?

EDIT: Actually, it appears that the FICO score has only been around since 1989. I'm pretty darn sure people were able to buy houses and get car insurance prior to 1989

R32 JUhl · 06-27-2005, 10:01 PM

Quote: Originally Posted by wizardPC

Only a few companies do that, and if an insurance company wants to up my rates because I don't borrow money, then I'll go somewhere else. That's what a free market economy will get you. Zander Insurance, for example, does not base anything on a FICO score.

Free market, sure! And in a free market, we've learned that going with larger companies - corporations - means better rates.... which means FICO score...

Quote: Originally Posted by wizardPC

To those who might be reading this who DO think that a FICO score is necessary for survival, I'll ask this:

How did people survive 50 years ago, when there was no such thing as a FICO score?

That one is simple, too. They did not have the option to shop around for the lowest price. They had little to no leverage with lenders. Competition was practically non-existent. In fact, if they ****ed off Joe Banker, Joe would NEVER give them a loan. Even today, I can work with my single-branch bank down the street who flows 90% of my revenue and they'll take good care of me. But if I want the very best rate on a mortgage, I go to the big boys! They have more money to lend and are therefore more liberal with it. They can give me a lower rate in five minutes than my local bank can give me after seven years of handling my cash.

I don't want to argue about this - it's like arguing religion - your "hell" is owing money, my "hell" is living cheaply <shudders>. I refer to it as subsisting, rather than living, to be perfectly honest with you.

There are rules in place (FICO is a "rule") that once properly understood can be used to improve your life. And I'm not a proponent of owing money! I'm just a firm believer that if you can possess secured debt and find someone else to pay for it, then you should live fully! Unsecured debt - credit cards - are a leverage tool, not the crutch most people use them as today. Car loans? Don't like 'em - investments (read:tenants) should always pay for the cars (interest is deductible, too in America).

Just like religions, we agree on the base concept - it's the finer details we don't see eye-to-eye on.

wizardPC · 06-27-2005, 10:24 PM

hey, I dont plan on living like I am now forever, that's no fun!

Just the next 18 months or so. Maybe the next 4 years if I decide I really do want to go to law school.

Great article from PBS about the FICO score

I just sent for a quote from Zander for insurance comparable to what I have now from a "big company", so we'll see how well that works out. I'll grant you that I will most likely have higher insurance rates because I will have a low FICO score, but I'm willing to bet that I'll still make out better paying higher insurance and NO INTEREST PAYMENTS than lower insurance WITH INTEREST.

Yes, interest is tax deductable, but you deduct from your taxable income, not the taxes that you pay. If you paid $10,000 in interest on a house this year, and you are in a 25% tax bracket, you've only avoided $2500 in taxes. If you want $2500 of your taxes for 2005 paid for you, I'll gladly do it--as soon as your check to me for $10,000 clears the bank.

elmo · 06-28-2005, 03:33 AM

nice to see your debt going down my friend, i have just found out that my girlfriends sister has £25,000 debt on her own and shes 22, her boyfriend has about the same, so we're looking at £50,000 debt, that works out to be about $96,000. And she only works part time... personally i think shes screwed. she cant stop spending

R32 JUhl · 06-28-2005, 10:01 AM

Quote: Originally Posted by wizardPC

hey, I dont plan on living like I am now forever, that's no fun!

Just the next 18 months or so. Maybe the next 4 years if I decide I really do want to go to law school.

Okay! That's a relief!

Quote: Originally Posted by wizardPC

Yes, interest is tax deductable, but you deduct from your taxable income, not the taxes that you pay. If you paid $10,000 in interest on a house this year, and you are in a 25% tax bracket, you've only avoided $2500 in taxes. If you want $2500 of your taxes for 2005 paid for you, I'll gladly do it--as soon as your check to me for $10,000 clears the bank.

I think I explained this once, but here it is again. For your personal home, you don't want to owe unless you have to.

Most of us have to.

However, if I have a house rented out for $1000/mo and there is no mortgage on that house, that income is taxable at my taxable income rate of 30% - I lose $300/mo. If I carry a mortgage on that house and use the equity to cover my living expenses, and the rent is set to cover the mortgage - I'm deducting nearly 100% of my taxable income. In other words, I'm not paying taxes. Your biggest expense in life is taxes - avoid that trap with financing and you'll work a whole lot less! Like I said - it's a matter of knowing the rules of the game and using them to your benefit.

There is risk associated with this approach, just like there is risk associated with EVERY approach. If you lose a renter, it costs money. Then again, if you lose your job, that costs money, too! So a strong savings account is a necessity regardless of what approach you take.

wizardPC · 07-12-2005, 09:42 AM

Debt as of 7/12/2005: $27,891.91

elmo · 07-12-2005, 09:44 AM

how is paying off all this cash affecting your standard of life pal, obviously will be great to have no doubt at the end but are you making your social life suffer because of it?

wizardPC · 07-12-2005, 10:02 AM

for acouple years, yes. But I just spent the last 6 years as a poor college student, so there is no noticable drop in my standard of living. In fact, I'm better off now even though I live on half of my pay

Enforcer · 07-12-2005, 10:12 AM

How the situation looking regarding the takeover?

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