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Updated: 2018-01-20T20:08:35Z

 



GRS Theater: You and Your Work — Employment tips from 1948

2018-01-20T20:06:54Z

This month is “back to basics” month at Get Rich Slowly, and this week we turned our attention to you and your work. Yesterday we explored landing your dream job. On Thursday, ESI Money shared tips for making more while growing your career. (And this coming Monday, I’ll give tips for negotiating your salary.) In […] The post GRS Theater: You and Your Work — Employment tips from 1948 appeared first on Get Rich Slowly. This month is “back to basics” month at Get Rich Slowly, and this week we turned our attention to you and your work. Yesterday we explored landing your dream job. On Thursday, ESI Money shared tips for making more while growing your career. (And this coming Monday, I’ll give tips for negotiating your salary.) In today’s installment of GRS Theater, we’re going to enjoy another educational film designed for high school students in the post-WWII era. This ten-minute video was put out by Coronet Films in 1948. In “You and Your Work”, a young worker learns the value of a positive attitude. Why loathe your life as a shoe salesman when you can learn to love it instead? width="100%" src="https://www.youtube.com/embed/zEBizJWOoVM?rel=0" frameborder="0" allowfullscreen class="aligncenter"> High-school student Frank Taylor wants to earn some spending cash, so he takes a job as a shoe salesman. The job is okay at first, but gradually Frank grows tired of it. Plus, the pay sucks: “That wouldn’t buy many of the things I wanted. The shoe business was no good!” After Frank is fired at the shoe store, he goes to his high-school guidance counselor for help. You and Your Work argues that there’s no such thing as a dull job. What’s important is the worker’s attitude. Frank wants a glamorous, interesting job — like an architect — but his counselor points out that even architects get bored with their work. And even teachers, chemists, and fishermen can be proud of what they do. So, too, can a shoe salesman. “Any job is as important as you make it,” says the guidance counselor. “If you think it’s not important, whatever it is, you’ll soon become bored with it and do it poorly.” To enjoy your work, you don’t need just a good income. You also need personal satisfaction, pride of accomplishment, and a sense of importance to others. This is true whether you’re talking about a part-time job or a life-time career. “And as for money,” says the counselor, “well, we all want money. But if you don’t perform any service, or if you don’t do your work well, you can’t expect much in return.” I can relate to poor Frank Taylor’s position. His shoe-selling experience reminds me of the worst job I ever had, selling insurance door-to-door when I was fresh out of college. In my case, I was able to get things turned around — eventually. And Frank, too, comes out ahead. He changes his attitude, and, in fact, becomes manager of the shoe store. This video reminds me of another piece of pop culture from the same era. Here’s an ad that ran in October 1956 issues of certain comic books. It’s all about the TRUE STORY of a guy who made good money with his side hustle selling shoes! Click through for a slightly larger version of this ad. (I know it’s a bit tough to read.) I’ve said it before and I’ll say it again: I love these old films. Sure, they simplify things. And sometimes their notions are sexist and/or racist, or otherwise outdated. But generally they have sound messages, even for the kids of today. They’re just dressed in the trappings of a world that no longer exists. Someday I’ll find the time to do a round-up of all these old educational money movies. I’d love to have them all in one place. The post GRS Theater: You and Your Work — Employment tips from 1948 appeared first on Get Rich Slowly. [...]



Land your dream job: How to find work that brings both joy and money

2018-01-19T15:41:26Z

In 1987, Marsha Sinetar published Do What You Love, the Money Will Follow, a popular book about finding your dream job based on your passions. She urged readers to “follow their own hearts to the work of their dreams”. Sinetar is a proponent of what she calls Right Livelihood: Doing your best at what you […] The post Land your dream job: How to find work that brings both joy and money appeared first on Get Rich Slowly. In 1987, Marsha Sinetar published Do What You Love, the Money Will Follow, a popular book about finding your dream job based on your passions. She urged readers to “follow their own hearts to the work of their dreams”. Sinetar is a proponent of what she calls Right Livelihood: Doing your best at what you do best. “Each of us, no matter how ordinary we consider our talents, wants and needs to use them. Right Livelihood is the natural expression of this need,” she wrote. “When we consciously choose to do work we enjoy, not only can we get things done, we can get them done well and be intrinsically rewarded for the effort. Money and security cease to be our only payments.” “Do what you love” sounds like a great idea — who wouldn’t want a dream job that was both fun and paid the bills? — but as many people have pointed out over the past thirty years, it’s generally poor career advice. When folks cling to the belief that they’ll have no trouble if they do what they love, they run the risk of not being able to make ends meet. One obvious problem is that not everything you enjoy doing can generate a reliable source of income. I like videogames, for instance, but I’ll never make big bucks playing Hearthstone. It’d be foolish to try. A few years ago, career columnist Penelope Trunk put it this way: “I am a writer, but I love sex more than I love writing…I don’t sit up at night thinking, should I do writing or sex? Because career decisions are not decisions about ‘what do I love most?'” There’s another problem that’s seldom mentioned. When people do manage to find what they think is their dream job, to make a career out of what they love, they frequently lose enthusiasm for the very thing they once valued. I’ve experienced this first-hand. When I started Get Rich Slowly in 2006, I was working as a salesman for the family box factory. I didn’t like my day job, so blogging was a fun escape. Eventually, I made enough from blogging that I could quit my job selling boxes to write full time. I was going to do what I loved! Awesome, right? In many ways, it was awesome — but it also quickly became a curse. Writing went from a fun escape to a tedious chore, a slog instead of a joy. (That’s one reason I sold this site in 2009.) When I repurchased the site last fall, I thought long and hard about how to avoid falling into that trap once again. (So far, so good!) Having said all that, I don’t think it’s bad to seek your dream job. In fact, I believe it’s a worthwhile goal — as long as you have realistic expectations (and can be patient). The challenge is to juggle what you’re good at, what you enjoy, and what people will pay you to do. The Intersection of Joy, Money, and Flow In 2016, my friend and colleague Chris Guillebeau published a book called Born for This: How to Find the Work You Were Meant to Do. “There’s more than one possible path to career success,” Guillebeau writes, “but you want to find the best one — the thing you were born to do.” He says that this “best path” is located at the intersection of joy, money, and flow. Ideally: Your work should make you happy. Similar to Sinetar, Guillebeau believes you should enjoy what you do for work. In a way, it’s like the Konmari Method of organization, which argues you should own only things that “spark joy”. Guillebeau seems to be saying that ideally your work will “spark joy&#[...]



Five steps to make more money while growing your career

2018-01-18T17:24:56Z

This is a guest post from ESI of ESI Money, a blog about achieving financial independence through earning, saving, and investing (“E”, “S”, and “I” — get it?). It’s written by an early-50s retiree who achieved financial independence, shares what’s worked for him, and details how others can implement those ideas in their own lives. […] The post Five steps to make more money while growing your career appeared first on Get Rich Slowly. This is a guest post from ESI of ESI Money, a blog about achieving financial independence through earning, saving, and investing (“E”, “S”, and “I” — get it?). It’s written by an early-50s retiree who achieved financial independence, shares what’s worked for him, and details how others can implement those ideas in their own lives. (Note: ESI is also the owner of Rockstar Finance, the leading curation site for top personal finance articles.) You’ve heard it a million times before: To build wealth, you have to spend less than you earn. It’s a great piece of advice — one of my favorites, actually. Too often, however, people take this to mean simply “control your spending”. While your spending is certainly part of the equation, there’s an equally-important component: your earning. Here’s what I think a lot of people miss: It’s easier to spend less than you earn when you earn more. It’s also easier to reach your financial goals. From my experience, the best way for most people to earn more is to grow their careers. Today I want to show you five ways to grow your career so that you make more money and enjoy greater job satisfaction. The Case for Career Growth I know, I can hear the collective groan. For myriad reasons, many people dislike advice about growing their careers. It’s probably because so many hate their jobs. I get it. I’ve been there myself. But I also understand that there’s a paradox between hating a career and achieving your money goals. If you hate your job so much that you don’t want to focus one extra second on it, you will actually prolong the time you need to work — the very thing you hate so much! Instead, if you put a bit of time and effort into growing your career, you’ll end up making millions more (literally), hitting your financial goals earlier, and (very likely) enjoying your career more. If I were able to give you a few, simple, easy-to-implement tips to help you achieve this, would you be interested? How Can I Be So Sure? Before we get to the tips, let’s address the elephant in the room: How can you be sure that the Bozo writing this piece can actually deliver? In all honesty, you can’t. But I do have a few accomplishments that might give you some confidence: Personal experience. I was able to grow my income by 8.16% per year throughout my career. Obviously people have done much better than this, but 8%+ isn’t too shabby over almost 30 years. If you don’t believe what a huge impact this can make, pick a starting salary and increase it by 8% each year for 28 years. Corporate experience. In addition to managing my own career, I saw countless colleagues and subordinates managing (or, mostly, not managing) theirs. I eventually became the president of a $100 million company, supervising the careers of hundreds of people. So along the way I learned a bit about growing your career, how to get ahead, and how companies view employees. Education. There are thousands of books (and millions of web pages) about career management. I’ve read many of them and tried a variety of techniques. I will say that most of them are virtually worthless, but there are some nuggets of wisdom that I’ve applied and learned from. Millionaires do it. I’ve interviewed over 30 millionaires (and more on the way.) Almost every one of them has developed a high income by applying the skills below which have acc[...]



On the importance of putting first things first

2018-01-17T22:40:09Z

Holy cats! That was an interesting 72 hours. For the past three days, I’ve been fighting a terrible cold. Or maybe the flu. I’m not sure which. It hasn’t been fun. On Sunday, while I was in Florida attending an early-retirement retreat, I woke with crap in my lungs. All day, I was coughing and […] The post On the importance of putting first things first appeared first on Get Rich Slowly. Holy cats! That was an interesting 72 hours. For the past three days, I’ve been fighting a terrible cold. Or maybe the flu. I’m not sure which. It hasn’t been fun. On Sunday, while I was in Florida attending an early-retirement retreat, I woke with crap in my lungs. All day, I was coughing and sneezing and hacking. I still felt relatively strong, though, so I made sure to get in my four-mile training run. (I made two goals involving running this year: I want to run at least one mile every day and I want to run a half marathon at the end of March.) On Monday morning, I felt worse. Still, I rolled out of bed and tromped the one mile I had scheduled for myself. It was a l-o-n-g mile, let me tell you. I was wheezing and gasping the entire ten minutes. The six-hour flight home to Portland on Monday afternoon was miserable. I hate flying when I’m sick, and I know how much that sucks for other passengers. I huddled next to the window and tried not to breathe too deeply. Breathing too deeply rattled the crap in my lungs and sent me into fits of coughing, so I mainly zoned out and made an effort to take shallow breaths. “You sound terrible,” Kim said when she picked me up from the airport. That night, she made me sleep in the guest room. I spent all yesterday fighting a high fever. I tried to write an article, but it was a futile endeavor. I couldn’t focus. I couldn’t write or read or even watch TV. (I starting watching the new Blade Runner movie, but I couldn’t focus for more than a few minutes at a time.) I could barely focus on videogames. In the afternoon, I felt a little better, so I decided to take the dog for a walk. “I have a three-mile training run scheduled today,” I thought to myself. “I probably shouldn’t do that. But surely I can do just a mile.” I put on my running clothes, grabbed the leash and the dog, and headed outside. After two minutes of running — and less than a quarter mile — I pulled up short. I couldn’t catch my breath. I felt like I was going to faint. I walked the dog back home and crawled into bed. And that’s how my goal of running at least one mile each day in 2018 came to an end. Blind Pursuit of the Less Important My example of blindly pursuing a small goal at the expense of the Big Picture is relatively minor. It’s not a big deal. But it’s not hard to find examples of people doing this on a grander scale, which can lead to all sorts of complications. I’ve noticed, for instance, that many people who discover the ideas behind early retirement become laser-focused on their “number” — the amount they need to save in order to reach financial independence (a.k.a. FI). They rearrange their lives so that they can save 50% or 70% or 85% of their income, but never take time to figure out what they’re saving for. Why are they saving for financial independence? What’s the purpose? Then a crisis occurs and they realize the goal they’ve been pursuing was a red herring. Financial independence and early retirement aren’t the actual objective — and they never were. A happy life filled with meaning and purpose is what they really want; financial independence is merely a tool to help them achieve it. I see this all of the time in the financial independence community. Everyone who reads FI forums can tell me what their number is — but only a handful can tell me why they’re pursuing FI. Here’s a classic example. Yesterday, in the financial ind[...]



How to get out of debt (without gimmicks or games)

2018-01-12T12:58:59Z

As part of back to basics month, let’s use today to explore how you can get out of debt without gimmicks or games. After twelve years of reading and writing about money, I’ve come to believe that debt reduction ought to be a side effect and not a goal. Getting out of debt is a […] The post How to get out of debt (without gimmicks or games) appeared first on Get Rich Slowly. As part of back to basics month, let’s use today to explore how you can get out of debt without gimmicks or games. After twelve years of reading and writing about money, I’ve come to believe that debt reduction ought to be a side effect and not a goal. Getting out of debt is a target, not a habit. And, as we’ve been discussing recently, good goals are built around actions instead of numbers. If you restructure your life so that you’re spending less than you earn, you will get out of debt. It’s a natural side effect. Having said that, I realize that a lot of GRS readers are struggling to get to square one. Getting out of debt is their goal and primary obsession. That’s okay. Before you can begin repaying your debt, you must be earning a profit. Unless your income exceeds your expenses, your debt is actually increasing. If you’re continuing to add debt, or if you’re only able to make minimum payments, you must first find ways to spend less and earn more until you have a positive “saving rate”. (Both businesses and people earn profits. But when individuals earn a personal profit, we call it “savings”.) After you’re earning a personal profit, you can (and should) make debt elimination a priority. Why You Should Pay Off Your Debt Debt repayment can improve your credit score, meaning you’ll pay less on everything from rent to car insurance to future borrowing needs. Plus, debt reduction is one of the best returns you can earn on your money. Investing in the stock market provides an average annual return of about 10% — but that return isn’t guaranteed. Some years the market is up 30%, but other years it drops by 40%. When you pay down a credit card, you earn a guaranteed return of 20% (or whatever your interest rate is). That’s tough to beat. There are also non-financial benefits to paying off debt, including: Simplicity. The more debt you have, the more bills you have. It’s easier to manage your money when you have a simple, efficient financial infrastructure. Each time you pay off a debt, you move one step closer to this ideal. Cash flow. Whenever you eliminate a debt, the money formerly used for that monthly payment becomes available to pursue other goals – including fun stuff like ski trips and knitting supplies. Freedom. When you have monthly payments to meet, you’re chained to your job. You’re unable to take risks. Once your debt is gone, a wider range of options becomes available to you. Peace of mind. Best of all, once you’re debt-free, you can sleep easier at night. You’ll put less pressure on yourself, and you’ll have fewer fights about money with your partner. When I first tried to get out of debt, I lacked a system. Without a plan, I sent extra money to one credit card and then another. As a result, I never seemed to make any progress. After deciding to become boss of my own life, however, I researched how to get out of debt. Many books recommended a strategy called the “debt snowball”. Although I was skeptical, I gave it a try. The method worked. Using it, I managed to eliminate my debt and begin saving for the future. The Debt Snowball With the debt snowball, you set aside a specific amount of cash each month to pay off the money you owe. At first, progress is slow. In time, however, you begin to make rapid progress, picking up speed like a snowball rolling downhill. Step One The first step is to make a list of your debts. For each obligation, include the balance you owe, the interest rate, and the minimum payment[...]



Money story: I was a frugal jerk

2018-01-05T16:08:11Z

This guest post from the Frugal Jerk is part of the “money stories” feature at Get Rich Slowly. Some stories contain general advice; others are examples of how a GRS reader achieved financial success — or failure. These stories feature folks from all stages of financial maturity. Today, the Frugal Jerk — who has asked […] The post Money story: I was a frugal jerk appeared first on Get Rich Slowly. This guest post from the Frugal Jerk is part of the “money stories” feature at Get Rich Slowly. Some stories contain general advice; others are examples of how a GRS reader achieved financial success — or failure. These stories feature folks from all stages of financial maturity. Today, the Frugal Jerk — who has asked to remain anonymous for now — shares the first half of his story about going from internet entrepreneur to busted and broke. You might know me. I’m a blogger and entrepreneur. I’ve had tens of thousands of customers during the last decade, so it’s very possible that you’ve purchased something from me in the past. I’ve been read by millions of readers on my own sites and I’ve appeared as a guest writer on popular websites you’ve surely heard of. I’ve also been featured in New York Times bestselling books that may sit on your shelf. At my peak, my income was $300,000 per year. By many accounts I would be considered successful. But I’ve made many dumb mistakes with money. We’re not going to bury the lede: At a certain point, because of a perfect storm of mistakes and problems, the smartest move was to foreclose my home. This move may have even saved my life. This is that story. What’s interesting about all of this is that I grew up fairly poor and conservative with money. If I couldn’t pay for something in cash then I didn’t buy it. I didn’t make stupid financial decisions. Those decisions were for idiots. I was no idiot! (Reality check: Everyone is an idiot sometimes.) Buying the Hype When I bought my home, everything was going great. In the run-up to the U.S. recession, houses wouldn’t stay on the market for long. If you remember those days, you know that you could go to a first open house and the house would often be sold before you got there. It got to the point where houses were regularly selling for more than asking price. Bidding battles were not uncommon. This should have been a warning. But I was young and dumb and flush with cash. I had a business generating almost $1,000 in profit per day. Mostly automated. All online. What to do with all that money? Home values always go up, right? It’s always smart to “Buy! Buy! Buy!” isn’t it? We all heard it daily. (You might still hear it regularly since the economy has improved lately.) Plus, it’s the alleged American Dream. Quite literally everybody around me told me to buy, particularly those who knew my income. Parents, friends, the echo chamber in the media. I didn’t hear a single dissenting opinion. (Besides my own, which I steadfastly ignored.) So I bought a home. Considering my income, I thought I was making a smart choice. I settled — and I do mean settled because I didn’t even like the home — on a $300,000 four-bedroom three-bath two-car-garage home. I was a young single guy with a huge family home. I know what you’re probably thinking. But it was “only” one year’s income and I put 20% down. What could possibly go wrong? Hahahaha. If you’ve been a working adult over the past decade, you know the answer. Nearly everything went wrong. The stock market tanked. The housing market tanked. And, most relevant to my eventual foreclosure decision, my income tanked. The year I bought my home, I made about $300,000. The year after, I made less than $50,000. The year after that? Less than $20,000. It was a massive blow to not only my finances but also my ego. In the Beginning My b[...]



GRS Theater: Developing Self-Reliance — Personal empowerment lessons from 1951

2018-01-20T20:03:12Z

Earlier this week, I encouraged readers to become proactive by developing an internal locus of control. In that article, I wrote: You are the boss of you. You don’t need anybody’s permission to get out of debt or to buy a house or to ask for a raise. And nobody’s going to come to you […] The post GRS Theater: Developing Self-Reliance — Personal empowerment lessons from 1951 appeared first on Get Rich Slowly. Earlier this week, I encouraged readers to become proactive by developing an internal locus of control. In that article, I wrote: You are the boss of you. You don’t need anybody’s permission to get out of debt or to buy a house or to ask for a raise. And nobody’s going to come to you out of the blue to explain investing or health insurance or your credit card contract. Take charge yourself. “I get it,” you might be thinking. “Self-reliance is great. But how do I change? How do I get from where I am to becoming a more self-reliant person?” In today’s installment of GRS Theater, we’re going to look at another fun educational film nearly seventy years ago. This short video (targeted at teenagers) aims to help viewers become more proactive. “If you’re not self-reliant, you’ll never do any more than just ‘get by’,” says the narrator. width="100%" src="https://www.youtube.com/embed/v9iflUfYRTc?rel=0" frameborder="0" allowfullscreen class="aligncenter"> I love how in his desk, Mr. Carson, the French teacher, just happens to have a typewritten card with the four steps to self-reliance. “Learning to be self-reliant takes time…and hard work,” he says, handing young Allen the list. Here are Mr. Carson’s steps, with a bit of elaboration. Assume responsibility. Take the blame for things that are your fault; look after your own work; plan your own time; depend on yourself to get things done. Be informed. If you don’t know some vital piece of information, find it out. Ask. Get the facts you need to make smart decisions. Knowledge gives you power. Ignorance puts you at the mercy of others. Know where you’re going. Set smart goals. Have a long-range plan so that you understand the general course you’re trying to make through life. Don’t simply react passively to the world around you. Make your own decisions. Develop the ability to think for yourself. Don’t rely on others to make choices for you — that’s a sure route to unhappiness. Be decisive. These steps are very similar to habits espoused by modern self-help gurus. Taking control of your own destiny is a great way to improve your satisfaction with life, to increase your happiness. The film picks up bonus points from this lit geek by name-dropping Ralph Waldo Emerson and his essay, “Self-Reliance”: There is a time in every man’s education when he arrives at the conviction that envy is ignorance; that imitation is suicide; that he must take himself for better, for worse, as his portion; that though the wide universe is full of good, no kernel of nourishing corn can come to him but through his toil bestowed on that plot of ground which is given to him to till. The power which resides in him is new in nature, and none but he knows what that is which he can do, nor does he know until he has tried. In the film, we get to watch as young Allen gains self-reliance, which transforms him from a dependent child to a confident young adult. Eventually, he becomes a leader among his classmates. “Yessir,” says Mr. Carson. “That was self-reliance — the kind we can all use. It’s hard work to become self-reliant…[but] Allen learned to do it, and he’s a certainly a happier and a better person for it. Will you develop the habit of self-reliance?” The post GRS Theater: Developing Self-Reliance — Personal empowerment[...]



How to shop for high-quality clothes

2018-01-12T15:50:25Z

I’m in Florida for ten days to attend a couple of weekend early retirement retreats. At Camp FI, about 50 or 60 people gather for three days of what Mr. Money Mustache calls “crazy rich people talk” — real estate investing, travel hacking, gift card arbitrage, 70% saving rates, and the rewards of frugality and […] The post How to shop for high-quality clothes appeared first on Get Rich Slowly. I’m in Florida for ten days to attend a couple of weekend early retirement retreats. At Camp FI, about 50 or 60 people gather for three days of what Mr. Money Mustache calls “crazy rich people talk” — real estate investing, travel hacking, gift card arbitrage, 70% saving rates, and the rewards of frugality and thrift. One afternoon, the conversation turned to clothing. Given that so many people in the room had a net worth of more than a million dollars, a surprising number of us still bought our clothes at thrift stores. width="100%" src="https://www.youtube.com/embed/QK8mJJJvaes?rel=0" frameborder="0" allowfullscreen class="aligncenter"> Cheapskate Millionaires “I can’t bring myself to pay more than ten dollars for a t-shirt,” one guy said. We all nodded in agreement. “I don’t pay anything for t-shirts,” said another fellow. “I travel a lot for work. When I go to conferences, I often come home with three or five or ten t-shirts. There’s no point in ever paying for them.” Throughout the weekend, I noticed that a lot of us wore t-shirts we’d picked up for free. (Because we’re money nerds, Choose FI t-shirts were prominent.) “But what about quality clothes?” asked one woman. “I get why we’re all so cheap on the everyday stuff. But sometimes, I want clothing that looks good, that I can go out in.” “I’m a long-time thrift store shopper,” I said, “and it’s taken some effort to allow myself to shop in regular stores. For quality stuff, I think it’s important to find a store with styles you like where the clothes also fit well.” “I’ll give you an example. In the fall of 2016, I made a trip to New York City. The forecast was for warm weather, so I took warm weather clothes. Turns out, temperatures were much lower than expected. And it rained. I was unprepared. My hotel was next to a J. Crew store, so I stopped in. I had never shopped there before in my life, but I discovered I liked the stuff they had and their clothes fit me well. I didn’t like the prices, but I managed to find a few things on sale, so I bought them.” I paused and looked down at the clothes that I had on. “Ha,” I said. “Right now, I’m wearing the dress shirt and sweater I bought that day in New York.” Beyond Cheap “I don’t shop at thrift stores,” said the man standing next to me. “I don’t like to have a lot of cheap clothes. I like simplicity and minimalism. So, I’m willing to pay more for my clothes because I buy only a handful of items and expect them to last a long time.” “Can you give some examples?” somebody asked. “Take this shirt I’m wearing now,” he said. “It’s a wool t-shirt from Icebreaker. And this jacket is from the same company. It’s more expensive — probably a lot more expensive — but it lasts a long time, looks good, and is very versatile. Merino wool is warm when it’s cold and cool when it’s warm. Plus, I can wear it for days on end without it stinking. I think that J.D. likes Icebreaker stuff too, right?” “I do,” I said. “I brought two of their wool t-shirts with me on this trip. And because it’s freezing here in Florida right now, I brought an Icebreaker jacket.” “I try[...]



Your credit score — and why it matters

2018-01-14T20:44:52Z

For today’s edition of “back to basics” month at Get Rich Slowly, we’re going to talk about credit scores. What is a credit score? Why should you care? As you go about your life, you leave a trail of transactions. You take out a mortgage, you buy a new car, you use your credit card […] The post Your credit score — and why it matters appeared first on Get Rich Slowly. For today’s edition of “back to basics” month at Get Rich Slowly, we’re going to talk about credit scores. What is a credit score? Why should you care? As you go about your life, you leave a trail of transactions. You take out a mortgage, you buy a new car, you use your credit card to buy new clothes and your debit car to purchase groceries. Every month, your creditors — the companies to which you owe money — send info about your recent activity to a variety of credit reporting agencies (commonly referred to as credit bureaus). Each agency collects this info into a file called a credit report. Your credit report is a history of how well you’ve managed your credit. It contains info about where you’ve lived, how much you’ve borrowed, and whether you tend to pay your bills on time. It also notes if you’ve ever filed for bankruptcy. The credit bureaus — Equifax, Experian, and TransUnion — sell your credit report to other businesses so they can decide whether to lend you money, sell you insurance, rent you a home, or give you a job. Credit reports may be boring, but they’re vitally important because they provide the basis for your credit score. How to Get Your Free Credit Report The U.S. government has mandated that consumers be allowed to view their credit reports from each of the three major reporting agencies once every year. This is easy to do via the free AnnualCreditReport.com website. (Beware of scammy lookalikes. This one is the official government-sanctioned site.) To get your report, you need to provide some basic info like your Social Security number. You might also need to answer some questions about current and/or past accounts. Sometimes these questions get tricky if you don’t have quick access to your files. (When Kim had to check her credit report recently, she couldn’t remember the amount of her mortgage payment from 2005. Her request was denied.) If you’d like, you can obtain reports from all three credit reporting agencies at once. Or, you can stagger your requests, possibly requesting one report every four months from a different agency. Your Credit Score While your credit report collects info about your debt history, your credit score is a single number that summarizes all of that data. Credit scoring has been around for decades in one form or another. It only became widely used during the 1980s after a fim called Fair Isaac (now known as FICO) developed a new type of credit score called a FICO score. The mortgage industry recognized the usefulness of credit scores, widely adopting them in the mid-1990s. Other industries followed suit. To generate your credit score, FICO takes bits of data from your personal credit report and compares this info to similar data from millions of other people. FICO then uses secret formulas to squeeze all of this information into a single number, which can range from 300 to 850. This number is a measure of risk. It gives lenders a good idea of how likely you are to pay them back. They use it to decide how much to lend you, what interest rates to charge, and what terms to set. Note Although the FICO score is the most widely used credit score — used in over 90% of U.S. lending decisions — it’s not the only credit score. Other companies offer competing credit scores, and FICO (the company) offers a variety of specialized scores to measure things like how[...]



J.D. on the NewRetirement podcast: Financial independence, purpose, and happiness

2018-01-10T19:20:44Z

From time to time, I make podcast appearances. Last week, for instance, I recorded three episodes for various shows — including a l-o-n-g discussion with Joe Saul-Sehy from Stacking Benjamins about the pros and cons of the new Star Wars movie. (Our discussion starts at 56:13 and lasts for half an hour!) The afternoon before […] The post J.D. on the NewRetirement podcast: Financial independence, purpose, and happiness appeared first on Get Rich Slowly. From time to time, I make podcast appearances. Last week, for instance, I recorded three episodes for various shows — including a l-o-n-g discussion with Joe Saul-Sehy from Stacking Benjamins about the pros and cons of the new Star Wars movie. (Our discussion starts at 56:13 and lasts for half an hour!) The afternoon before I flew out to Florida, I sat down to chat with Steve Chen from NewRetirement. For those of you unfamiliar, NewRetirement is a retirement planning tool. It’s not just a calculator, but a sophisticated forecaster to help you plan your future. I have no financial stake in the company — not yet, anyhow — I just like it. I think most retirement calculators suck. The NewRetirement tool is one of a handful I like. Anyhow, over the past year, I’ve had a chance to get to know NewRetirement founder Steve Chen. I like and respect him. He’s doing good work and his heart is in the right place. When he asked me to be the first guest on his first podcast, I was eager to do so. We talked about purpose and happiness (Surprise!) frameborder="0" height="94px" scrolling="no" seamless src="https://simplecast.com/e/ac67bca5?style=medium-dark" width="100%"> Steve and I had planned to talk about the pros and cons of early retirement, but, as sometimes happens, our talk strayed to other (equally interesting) topics. I don’t have space to quote the entire transcript. (You can find that here.) Instead, I’ll highlight one of my favorite (edited) sections. Steve I want to ask you another question. One thing that I found really interesting about you is that you’re writing about personal finance and helping people make better choices, but I also know that a big thing for you is purpose — helping people figure out what should they be doing with their time and their lives. I’m wondering if you could elaborate on that a little bit. J.D. I have a money blog. I write about money. I mentioned at the start of the show that I have a degree in psychology. I’ve always been interested in the pursuit of happiness. What does it mean to be happy? What does it take to be happy? Even though I’m writing about money, I’m actually writing about the pursuit of happiness. From my reading and my experience, the best way to achieve well-being is to have a sense of purpose and to pursue that purpose, to build your life around that purpose. I know that sounds New-Agey, maybe a little hokey. I don’t mean it in a hokey, New Age way. I mean it a very real way. As long ago as Aristotle — thousands of years ago — up to modern day, psychologists have found that when you have a purpose, when you have a direction in your life and you build your life around it, you tend to be much more fulfilled. It’s easier to make decisions with your money, with your time, with your friends — with everything — if you know what it is you want to accomplish out of life. I don’t think there’s any one right purpose that’s right for everybody. For some people, your purpose might be your family. For other people, it might be travel. For others, that might be serving a higher calling, whether that’s a God or some other purpose like serving others. It doesn’t really matter. I urge my readers to get clear on what their purpose is so they c[...]