BigSoccer Personal Finance and Credit Repair: New low 2% APR

Discussion in 'Finance, Investing & Economy' started by Ian Lozada, Jun 29, 2005.

  1. Sachin

    Sachin New Member

    Jan 14, 2000
    La Norte
    Club:
    DC United
    Here is some information on reverse mortgages:

    http://moneycentral.msn.com/content/retirementandwills/retireinstyle/p34814.asp

    Also, make sure your grandparents have completed their estate planning. I presume your mother will become thier medical guardian as they age. She will need a medical power of attorney, or a general power of attorney, depending on thier situation. They should also have an Advance Medical Directive, which can specifiy exactly which treatments are authorized and which ones are not.

    Having these documents in place made taking care of my parents much easier as they both passed on. If you want more advice, please feel free to ask.

    Sachin
     
  2. soccernutter

    soccernutter Moderator
    Staff Member

    Aug 22, 2001
    Don't drink beer but like cheese
    Club:
    Tottenham Hotspur FC
    Nat'l Team:
    United States
    Prk, that is a great idea. If I get the time tormorrow, I'll take a look at that. As for the reverse mortgage, it is to pay for home health care. My mom believes, as do her doctor (whom he has known/gone to for 30 years) that if they move, it will be a very stressful event and one if not both will die quickly. Thus, she is looking at how to fund that...

    Legally/medically, everything is covered - it appears that she got everything signed just in the nick of time (and getting it signed was a struggle...). We are so far ahead of the game on this that I'm even getting the point where my mom is thinking about putting me on her estate stuff.

    Oh, I might mention that my grandfather was a doctor...

    And when I learn more, I'll share. Look for the running commentary on this...

    Sachin, look for several PMs.
     
  3. taylor

    taylor Member+

    Jun 9, 2000
    Fav team: FC CARL ZEISS JENA
    Club:
    --other--
    Nat'l Team:
    Germany
    Thanks for everything guys. I remember reading this thread a couple of years ago and it popped into my head to check my credit rating this past week when I was in the US again, because I am flirting with buying a house.

    Well, I was pretty shocked.

    My question is... what do you do with probable identity theft when you live in a foreign country?

    There were multiple things on the report where I had no idea what it was or where it was. Given that I paid off 60K of student loans (in less than 18 months of repayment) in the past year and have a (relatively) large line of mostly unused credit and was also just issued a platinum CC with a differing company, I found it hard to believe that I could get a low 500 score.

    What should/can I do?

    Thanks a lot!
    T.

    Also, on a seperate note, does airline status have any effect (i.e. platinum/gold etc. member)
     
  4. Ian Lozada

    Ian Lozada New Member

    May 29, 2001
    The Pick Four Pool
    Club:
    Arsenal FC
    Nat'l Team:
    United States

    The first thing you should do is to make sure you have all three credit bureau's reports. All of them should have places on their sites to dispute information, and you should bring the incorrect stuff to their attention immediately.

    I honestly don't know how living abroad would affect your case. If it turns out that some of the data was used to open accounts abroad, you're probably looking at needing to take up the case in your current country of residence as well.

    Here's the FTC's site on identity theft: It's probably as good a place as any to start, now.

    http://www.ftc.gov/bcp/edu/microsites/idtheft//
     
  5. taylor

    taylor Member+

    Jun 9, 2000
    Fav team: FC CARL ZEISS JENA
    Club:
    --other--
    Nat'l Team:
    Germany


    First, thank you very much Ian.

    The problem is that I first tried it to check my one free annual report, but since I was abroad, it stated that I couldn't check my report. So I therefore checked when I went over to the US.

    I have several problems. 1) Due to IP control, the cite can not be accessed from abroad, so I can't revisit the report until I return to the US this coming weekend, so I can't write the activity theft down.

    2) I don't understand how I can have such a poor score and still have the credit line and type of cc I have

    3) How different is the freeanualreport.com from the other three scores?

    4) so I take it Airline status doesn't matter (it could be a good proxy????:)

    Also, I do have one legitmate credit agency thing from way back when. Back when I was still principled, I didn't pay a Sprint bill, because they basically lied & cheated me, so I decided not to pay the creditor/agency out of protest....for a couple of months.

    I think I changed my mind when I read your posts a couple of years ago and so I assumed it hasn't hurt too much.
     
  6. Ian Lozada

    Ian Lozada New Member

    May 29, 2001
    The Pick Four Pool
    Club:
    Arsenal FC
    Nat'l Team:
    United States
    1) Yeah, unless you have someone Stateside who you trust who can make the credit bureau inquiries for you and send you printouts, that's a problem.

    2) Bad credit isn't going to lead to people closing your existing credit lines in most cases.

    3) There are three credit bureaus in the US. Freecreditreport.com is a service of Experian, one of the three. If you don't get the other two, you may find that there's additional incorrect stuff out there later on.

    4) Neither airline memberships nor your Sprint bill should affect your credit, since neither requires you to borrow money. That said, if your Sprint bill went into collections, then it does affect your scores.
     
  7. taylor

    taylor Member+

    Jun 9, 2000
    Fav team: FC CARL ZEISS JENA
    Club:
    --other--
    Nat'l Team:
    Germany

    Thanks Ian. I appreciate it. I guess I have another thing to do on the weekends now, apart from soccer.....
     
  8. MLSNHTOWN

    MLSNHTOWN Member+

    Oct 27, 1999
    Houston, TX
    Ok....I am back......0 credit card debt and have already paid off one student loan thanks in part to you guys and some of the advice in here. So now things are going well and I need to figure out which things I should pay off first.....

    A) Student Loan Debt - 66K over 25 more years, 3.15% interest currently
    B) Car Loan - 12K, two years left of payments, 0% interest
    C) Mortgage - 70K, 30 years, 5-year ARM for another 1.5 years at 5% then it starts varying.

    My gut says that I am not going to get any interest rates better than A and B, so I should move/refinance my mortgage and just invest the rest. I have a decent amount in savings(5.05% interest account through emigrantdirect.com) ---- (built up a 6 month emergency fund), and am getting ready to throw an additional 8K in an IRA. After that, what should I do with my money? Am I doing the right thing if I decide to start investing?

    I am going to buy some of the investing books discussed in these two threads as well to make sure I know exactly what I am doing. I don't anticipate that I am financially smart enough to buy and sell stocks on my own or anything of that nature, so I plan on investing in mutual funds right now. I am meeting wtih some financial advisors (USB, fidelity, etc.) over the next month to really get this moving...but wanted the thought of the general thread.
     
  9. Ian Lozada

    Ian Lozada New Member

    May 29, 2001
    The Pick Four Pool
    Club:
    Arsenal FC
    Nat'l Team:
    United States
    You're definitely on the right track. Make sure you're taking full advantage of your 401K at work first-- matching funds are free money. Then you can put the yearly 4K in the IRA-- Roth will leave you with more money at takeout time because the taxes are already paid, Traditional will get you a tax break this year, but you pay taxes on withdrawal. I'm like you-- not enough time to do all the research for investing, so I stick with S&P500 index funds, as well as MSCI EAFE index funds. Other people here are more investing gurus than I am, but remember, 80% of all mutual funds each year don't beat the S&P 500.
     
  10. peledre

    peledre Member

    Mar 25, 2001
    Sioux Falls, SD
    Club:
    Chicago Fire
    Nat'l Team:
    United States
    Great Work Man. You're doing really well. You're in a pretty good situation, so long as you stick to your budget there's really no wrong way to do it. If it was me I'd pay the car loan off ASAP and then never finance an auto again. If you can take advantage of 0% financing and invest the money you would've spent on the car that's another way to do it. Certainly nothing wrong with that. Paying cash for a car is a great feeling though.

    Neither your mortgage nor your student loans are bad debt, but if you want to attack it I'd go for the student loan debt first and refinance the ARM in 1.5 years into a 15 yr fixed loan. You can probably get around 6.09-6.25%

    Mutual funds are a great way to go for long term retirement planning. Does your company offer a 401(k) with match? If it does, you need to be maxing out whatever your company offers as a matching amount, and putting the rest into the IRA. I'm currently spreading around my IRA savings into about some various mutual funds; a russell 2000 and s&p index fund, a couple of templeton international funds, emerging markets funds, and some legg mason aggressive growth funds. I'm more on the aggressive end since I still have approximately 40 years before I'll be retiring. :D
     
  11. peledre

    peledre Member

    Mar 25, 2001
    Sioux Falls, SD
    Club:
    Chicago Fire
    Nat'l Team:
    United States
    BTW just a sidenote. Citigroup recently just reorganized their company retirement plans. They're basically getting rid of the pension program altogether in favor of 401(k). In lieu of a pension they are automatically putting 2% of an employee's yearly salary into the 401(k) plan into funds of their choice, and will match 1 for 1 up to an additional 6%. So with a 6% contribution by the employee they'll be investing 14% of gross salary into a QRP. I wish every company in America had as generous a plan.
     
  12. MLSNHTOWN

    MLSNHTOWN Member+

    Oct 27, 1999
    Houston, TX
    A bit of a follow up regarding me and some of the questions/thoughts....

    1. No 401K for work...so no matching or tax benefits.
    2. I will never finance a car payment ever again....even though I got a great deal and got thrown out of two car dealerships in the process, I know better now.
    3. Can't do the Roth IRA....I make too much.
    4. I am leaning towards using whatever $$$$ I do get into some aggressive mutual funds as I am also young. I am thinking that my IRA will be in more conservative investment vehicles while the rest of my investments will be very aggressive. Who knows....

    Like I said my gut feeling is to not attack my student loan or car loan. I can pay the 12K car loan off right now if I wanted, but like I said before 0% and 3% means that I am in no hurry to knock that one out yet. Just wanted to make sure the train of thought there was ok thinking.

    What about refinancing my ARM on my mortgage....Wait 1.5 years that way I have maximum flexibility to sell my house in case a better job comes along in another city.......or........refinance now as interest rates may go up?
     
  13. peledre

    peledre Member

    Mar 25, 2001
    Sioux Falls, SD
    Club:
    Chicago Fire
    Nat'l Team:
    United States
    It's always a bit of a gamble to bet on interest rates, but my gut feeling is that they are not going to be significantly different in a year than they are now. I would wait to refinance if it was me, especially if you are willing to move for a better job. It would be a waste to refinance if you're thinking of moving in the next 3-4 years, closing costs would outweigh any savings on rate.
     
  14. Footer Phooter

    Jul 23, 2000
    Falls Church, VA
    I'd start investing if I were you. The rates on your debt are pretty low. Since you don't have a 401(k), I believe you can put a small amount into an IRA (non-Roth) for yourself, and exclude that money from your taxable income.

    You might want to ask about that in the Tax Advice thread.
     
  15. Footer Phooter

    Jul 23, 2000
    Falls Church, VA
    Story please. :D
     
  16. Footer Phooter

    Jul 23, 2000
    Falls Church, VA
    Now if they could just get their expenses under control........stock's kind of stagnated in the low 50's.
     
  17. Ian Lozada

    Ian Lozada New Member

    May 29, 2001
    The Pick Four Pool
    Club:
    Arsenal FC
    Nat'l Team:
    United States
    What he said. I do my gambling at the racetrack with money I can afford to lose, not with big ticket items.
     
  18. MLSNHTOWN

    MLSNHTOWN Member+

    Oct 27, 1999
    Houston, TX
    Story starts wtih pretty much me knowing how the game works. Pick your car with whatever upgrades you want. The car is constant. Then there are three other values.....Trade In Value, Price of car I am Purchasing, and INterest Rate. Everything else is irrelevant (assuming the five years stays constant for payment term).

    So.....

    Thrown out of the dealership story #1 - My dad and I go to the local dealer. We spend the first hour getting a very very good deal on the trade in value. Not outrageous mind you....but a good start to the deal. Then we go tot he price. We spend the next two hours negotiating over the price (mostly with the sales manager because the peon who is the salesman doesn't have the authority to make the deal at the price that we want). So we get a very good deal on trade in value and price. Then we agree upon a low interest rate (5%) on the loan. So while the day was long and tiresome and it really sucked....we spent a good four hours getting the car that I wanted at the price and interest rate we wanted (based on the research on all of the details on the car....and of course...the dealers own invoice).

    So we are sitting in the finance guy's office waiting for him to finalize the deal and we reject all the b.s. addons that they try to sell that are a crock of shit. So the finance guy figures out the dealership isn't making enough money on me......weirdly he gets up and talks to the sales manager a couple of times while talking to us. Then he trys to run out forms with an 11% interest rate on them and just have us sign them like that was the deal we agreed upon. We are like WTF.....give us the interst rate that we agreed upon. The finance guy says no. I can't give you that interest rate that you agreed upon. So my dad and I got absolutely livid. We were more or less told 11% or no deal by the finance guy. We went out to the sales manager and said...don't you stand by your deal....and he said I can't do anything blah blah blah. So we said, well 11% is no deal. Then we starting yelling about their unethical negotiating practices and the bullshit they tried to pull with us in the middle of their sales floor and they surprisingly :) didn't take too kindly to it. We were told to leave....and then of course we became even more livid. Then they went and got security and we were even more livid. Until security showed up and escorted us off the premises.


    Story #2 - I go to another dealership. This one is one of those slimy ones that everyone knows is slimy ahead of time. No big deal. The one above was not a slimey dealership before my story and had a good reputation. So go into scuzzfest. Sit down and start negotiating after I select the model and options I like. We start negotiating and within the first hour I get told by the salesman that because of my negotiation tactics that I am not there to buy a car. I assure the salesman, I am there to by a car, I just want to get a good deal etc. They always hit you with....."well what do I have to get the car pricewise for you to take it?" I always hit them with a number that is well below the invoice(which they have already pulled out). So after about 30 minutes...the guy gets up and says...you are not intersted in buying a car stop wasting my time ...get out. I was like are you kidding me? Let me speak to your manager.....manager comes out and hits me with the same line that my negotiations indicate that I am not there to buy a car so I should stop wasting their time. I was like...trust me..I am buying a car today if the price is right. They say, we don't believe you...stop wasting our time and leave. I said that is ridiculous. They said go or we are going to call security. I said fine, you don't want to business fine.

    I went to another dealership that same day and bought a nearly identical SUV and went back to that same dealership. Asked to speak to their sales manager again and said look....see I bought a car. Asked to speak to his boss, he said his boss owns the dealership. So I got his contact information and wrote him a letter about my treatment and faxed over my paperwork.
     
  19. peledre

    peledre Member

    Mar 25, 2001
    Sioux Falls, SD
    Club:
    Chicago Fire
    Nat'l Team:
    United States
    It might help if they stop flying Maria Baritromo all over the world.
     
  20. Footer Phooter

    Jul 23, 2000
    Falls Church, VA
    Well, they just dropped $50 million to be on the Galaxy jersey. :rolleyes:
     
  21. Michael K.

    Michael K. Member

    Mar 3, 1999
    There or Thereabouts
    Nat'l Team:
    United States
    This a great set of threads - I've spent a couple hours over the last few days reading through them from the beginning and still have a lot to pick up.

    After a lot of personal finance ignorance and/or wishing it all would go away in my early days (my conviction has long been that if I don't open the envelope containing the bill, it doesn't actually exist), I've started to get sensible about what I do with my money - to my immense mental and financial benefit. Seeing the stress and trouble that bad financial practices bring, firsthand and secondhand, has been enough to make me start paying attention. Lately I've also started using YNAB, which has helped me out a lot too.

    So with credit cards being a major part of this equation, here's my question:

    I have @$2500 in cc debt on my main card, which I have plans to knock off over the next 8-10 months (I've budgeted it all out, and should be able to manage that without too much trouble). I don't use that card for many everyday purchases, but have racked up those debts over a few years of attending distant conferences and buying the occasional necessity when my stipend ran down (I used to brush against my credit limit, but I've been backing down from that slowly). I have another Mastercard, but it's zeroed out and I keep that way by almost never using it.

    In other words, I'm imperfect in my credit card practices, but I know what I gotta do and am getting better.

    I'm starting a new job in MD soon. Among the many, many great things about this (a real city! real money!) is the fact that I'm a lot closer to the northeastern homeland and family - a four hour train ride instead of a twelve hour drive. I don't plan on going home every weekend, but I'll be able to make it back more than twice a year. I also like the idea of being around several mainlines and definitely foresee doing more of my travel by train, less by car (I'll probably have to bounce down to DC or up to NYC for research over the next year.)

    So with more Amtraking in my future, I'm thinking about opening a couple new credit cards solely for the Amtrak rewards points. The Amtrak MC gets you a piddling 5000 points at the start, but additional purchases on that card (when and if I need them, and at some point I will) score additional points. Then there's a Continental MC out there, which gets you 21,000 miles (I have OnePass). Those miles can then be transferred over in blocks to Amtrak points, one-to-one.

    Now we're talking about gaining enough "free" points to cover many, if not all of my potential trips for a while. I'm no Shaolin when it comes to gaming frequent traveler programs, but this I can do - provided I cancel the Continental card before any annual fee kicks in.

    Are there any major personal-finance pitfalls to this little plan, as long as my credit is solid enough right now? And, of course, as long as I maintain discipline and don't go building balances (again, that's not in my plans).

    There's a larger question of the real value of airline/hotel-branded credit cards - are the points and rewards and perks reason enough to use them as your main card? - wrapped up in here, too.
     
  22. Ian Lozada

    Ian Lozada New Member

    May 29, 2001
    The Pick Four Pool
    Club:
    Arsenal FC
    Nat'l Team:
    United States
    So long as you're not carrying a balance, it's a great way to go.
     
  23. tcmahoney

    tcmahoney New Member

    Feb 14, 1999
    Metronatural
    I worked with a guy who used an Alaska Airlines card and treated it like a debit card -- every time he used it, which was pretty much for everything, he made a note in his checkbook. He then would pay off the bill in full from his checking account each month.
     
  24. Ian Lozada

    Ian Lozada New Member

    May 29, 2001
    The Pick Four Pool
    Club:
    Arsenal FC
    Nat'l Team:
    United States
    I had a USBank Northwest WorldPerks card like that, but USBank was so bad with the dumb policies leading to gotcha fees that I eventually had to close the account.
     
  25. peledre

    peledre Member

    Mar 25, 2001
    Sioux Falls, SD
    Club:
    Chicago Fire
    Nat'l Team:
    United States
    My personal advice to everyone with respect to rewards cards is to get a cash back card where you can bank the money (i.e. not have it use it to pay your bill), and use that cash to buy anything you want, or save it, rather than getting "points" or "miles". It will generally be a lot more hassle free and gives you a lot more flexibility. Every day there seem to be new restrictions of mileage and other rewards cards. Cash is king.
     

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