FINANCE LOVE: Forever Indebted And Written by Reginald A. Craig

FINANCE LOVE: Forever Indebted And Written by Reginald A. Craig

The average person when trying to make a living must seek Financial Institutions that lend various bank loans for different stages of your life. If we’re discipline and follow the rules someday we’ll be debt free and live off our retirement nest egg. If you’re fortunate to have generational knowledge or a substantial inheritance cash might not be an issue. However for the majority of the population in order to create sustainable independence requires a job, “not so” - common sense, and carrying debt with interest. If you relate to this situation please stick around and gather these dollar stretching suggestions for you and a friend.
 

NEW ADULT ESTABLISHING CREDIT:

When I was age 18 Chase Bank solicited to me a Student Visa Credit Card. This was in the early 90’s so being issued plastic money felt like a grown-up thing. If I recall the credit limit was somewhere between $250 - $500. Chase originally watchdogged my spending habits, but ironically as my balance increased the threshold slowly lifted. It wasn't until years later that I realized the manipulative false sense of relief by Chase increasing my credit, became the shift in mentality from paying off balances to adopting the revolving credit cycle. The real trick was as my spending increased the purchasing interest rate reduced along with the minimum monthly payment due to only a fraction of the total balance. There became absolutely no pressure to pay off my credit card, in addition I was falsely rewarded to graduate past the student card status. Sure I accepted responsibly for my spending decisions and I make no excuses. However, if I could go back in time I would make myself clear that a credit card is not an installment loan. Thankfully I always paid the minimums on time and never opted for cash advancements, now that’s a horse of a different color.

Today’s young adults use Debit Cards, which is a smart thing but they're trapped full of fees if you're careless. Keep track of your activities and save a whole lot of money.

UNEDUCATED STUDENT AID:

Long ago I attended business trade school where I had a Parent Student Loan. During the study course my mom paid monthly installments and shortly after I received a certificate my portion kicked in. The total loan wasn't substantial so everything was paid off within 3 years, plus as a bonus it helped me establish positive credit history. Fast forwarding to the present, both of my children attend Universities with tuition payments made in combination from scholarships, Federal Loan and Private Co-Sign. The many finance loans available to pay for college are mind boggling. However the attainability and affordability to repay dwindles your options greatly. I know the old folks would always lecture new parent to save for the kids education, but that’s advice I wish I’d done more than just heard. Let me say it like this, you can’t even have peace of mind after you secure all your loans. Once you’re on campus it’s possible to find yourself in all types of financial hardships that may impede the quality of your total experience. At any given semester the school may reject payment disbursement because of private to federal loan ratio. In this event the student must pay the difference immediately to maintain eligibility for future Financial Aid.

((( Parents ))) definitely save for education…  And if that’s not practical just like my situation, opt for at least a loan with In School Interest Payments. Just whatever the case DON’T DEFER payment for graduation, because you’ll end up paying interest on top of interest.

THE AUTO LOAN YOU CAN’T AFFORD:

My first car I saved up for a couple summers and paid cash. Approximately four years later I financed a slightly used compact SUV. The loan required very little downpayment at 60 months term. The vehicle was a returning lease that basically exchanged hands through the dealer. In retrospect I didn't negotiate enough on the sales price and had no idea I could arrange my own financing elsewhere. The final two mistakes I made was getting an extended warranty packed in and then just two years later I traded the truck in for a different used car. Because I still owed a balance plus negative equity, I had to roll the difference into the next Auto Loan. With all this business my new payment was in the stratosphere of what a new car would've cost. Fortunately I followed through the whole term and allowed myself a fresh start. Eventually I did buy a brand new car, but I must say between the manufacture recalls and regular maintenance you're still in the service center like the guy with the used car. 

Nowadays mobility options are expanding and the need to take possession is diminishing. Rather you choose to lease or buy seriously count the cost. Insurance companies redline cities with a large minority population, and when you have a bank lien on your auto you're required to have premium coverage.

SMALL BUSINESS INVESTMENT

Solowork was my first and only DBA (Doing Business As) established 1999. I was the sole proprietor and the Intern with no employees. Honestly I never made a profit, it was a labor of love for approximately three years. Solowork was my outlet to create and distribute Electronic Music on vinyl and Compact Disc. Early business was promising and I was able to reinvest earnings into followup projects.  I learned a lot from running a small home based business. First of all graduating with an Associate's in Hindsight was my biggest achievement. My initial misstep was involving too much of my personal income to start up. Solowork was much like a hobby that I flew by the seat of my pants. Ideally starting with a business plan and an Investor would've been proper, but instead I used my tax refund to get wind beneath my wings. Eventually I would arrange a one time deal with my sister to invest in a singular project in exchange for a percentage of the sales, but after recouping no surplus developed. To my credit though I did have a basic daily business structure modeled after larger indie labels.  This example allowed me to establish a release schedule that would successfully synchronize with the manufacturing process. Actually I was kinda on a roll leading up to my 5th and unexpected final release. Unfortunately as it would happen the tragedy of 9/11 created major instability and unraveled the economy which left loose ends. Because Solowork basically operated release to release, there was no dependable cash to pursue the next project. https://soundcloud.com/solowork-detroit

If you're serious about starting a business consider applying for grants, partnering up, and (or) securing a business loan. Statistics show the average business takes three years to turn a profit, with restaurants struggling the most among them. Having venture capital will be your saving grace to weather the storm.  As the old saying goes, “It takes money to make money”.

HOME MORTGAGE FOREVER:

First time homeowners make rookie mistakes with the biggest smiles. I remember when my wife and I purchased our starter home. It was during a strong sellers market pre 9/11. We both were confidently employed and with established credit. Our biggest weakness was little cash in the bank and much credit card debt. Considering our available resources or lack there of, we thought buying a home in my birth city would be the responsible thing to do. We found a modest little bungalow on the edge of the city convenient to major shopping centers and freeways. In spite of all that glittered the education system was not gold. School ratings is one of the biggest contributor to sustaining home values. Remember Location, Location, Location.

Lost Savings Opportunities

• Selected a home without energy efficient upgrades
• Should've negotiated below appraisal value
• 2x financial verifications after realtor dropped the ball - Could've walked 
• Only qualified for 30 YEAR - FHA 
• Loyal to my (then) bank but they sold our mortgage 1st note
• Missed timeline to have water bill dispute credited via sellers escrow
• That “responsible” birth city had hidden cost by redlining insurance policies for home & auto
• Got complacent and lived in the starter home 13 years straight through the housing bubble

Life lessons are a real trip though. What took a relentless 6 months to accomplish originally, was knocked out the park in only 2 months on our second home purchase. This time we implemented concessions and were willing to walk away if not agreed. Also we prepared ourselves better and were approved for a conventional loan. One thing we can do even better next time is apply for the shortest manageable term loan, preferably 20 years or less.

PAYING FOR YOUR DREAMS:

Traveling to events with my family is one of my favorite things to do, especially when we have to hit the open road. After arriving one of the highlights I enjoy is the hotel stay. The only thing I require is our home away from home to be just as clean. In past experiences many hotels like HolidayInn offered room service prepared from their very own dining room. Also In good weather the pool was a welcoming standard for guest and often indoor accommodations were available to take pleasure year round. It seems like nowadays quality options are hard to come by on a budget. Many hotel chains today strip back all the extras and lack luster on cleanliness. It’s getting to the point that my homestead is more exciting to return to than the anticipation they’ll leave the light on. Only recently my travels reduced in frequency which I account to the rising cost and reduced conditions certainly have played a large factor. It would definitely rekindle my traveling excitement and go further with spontaneity if I owned a Recreational Vehicle. Often in the back of my mind I wished I could've afford a Winnebago and rolled with my room and board. The prices on the Luxo models are well in the six-figures though. However, to my surprise I stumbled up and learned you can actually get an RV Mortgage for these things. In my case this new found knowledge is a day late and a dollar short. This would've been fantastic when the kids were young. At this point in my life we’ve acquired so much responsibility that to take on this expense right now would be an absolute train wreck.

 

People please don’t wait and assume like I did. Get informed and save money. There’s always a better way to get it done. Time is your only limitation. For me it’s the RV, but for you maybe a private yacht.  Remember, don't kill the opportunity by being afraid of your dreams. Get the facts sooner than later and turn your thoughts into reality. 

CLOSING THOUGHTS:

Life is more than money, things and places. Yes, it may accentuate enjoyment temporally while here on earth, but it’s how you acquire this stuff that determines its weight in gold. Quality relationships bring more value to all your accomplishments. To make the path to sustainable independence more successful, please identify with your Role Models and Mentors for guidance. 

Hey! Sounds like a win Win Winnebago to me : )

PS… Look below to find my previous Blog post:

Lincoln Love: A True Story Experienced

Food Love: Learned Experimented

Music Love: Listened Enjoyed

Parenting Love: Meaningfully Communicated
Vehicle Love: Desired Admired