A Healthy and Wealthy Being

I moved here to United States from the Philippines in August 1999. My first job here ever was picking up dog poops! From then on, I would never forget the true value of money.

In High School, I picked up trash and cleaned the hallways after school. On weekends, I would go to my mother’s friend’s house to clean her yard and water the plants. During summer, I was doing landscaping at school, planting trees, and digging ditches and trenches. I also harvested grapefruits. I saved a lot of money.

Before attending college, I paid my first car, a purple Dodge Neon, in cash. I also saved enough to pay for 1 year of college schooling. I wrote a lot of essays and received several scholarships for that. My high school efforts were rewarded through college scholarships, accolades and academic awards, and became the Salutatorian of my class.

I joined a summer program called Summer Bridge. This program allowed incoming students to experience the college life by staying on campus and taking introductory classes for a month before starting the regular school year. I also received credits towards my college classes. These credits allowed me to skip some classes I would have to take during my freshman year. That was awesome, I took advance classes immediately.

In college, I did the same things back when I was in High School. I worked while studying. I was a tutor in Mathematics for 3 years at several Middle School and High School in town. During the summer, I would drive up to the Bay Area (San Ramon, Novato, and Danville) where I took the job as an office assistant. I worked for an Insurance Marketing company. I worked closely with a CEO and the CPA.

How does this story relate to the title of this article? My attitude and behavior towards money.

Let’s talk about credit cards and why they are dangerous. Especially for those of you who are in college, parents with teenage kids, and those of you who currently have credit cards.

Only use credit card to build your credit score, your FICO. My rule of thumb with Credit Card is that, if I use $100 on that credit card today, I better have $100 tomorrow to pay if off. If I used that credit card to buy something that is worth $2,000 today, I better be able to pay that $2,000 tomorrow to pay it off. Basically, I don’t buy things I can’t afford to pay in cash by the end of the money. Otherwise, I will never be wealthy. I will explain this later.

Let’s outline a quick history about credit card.

In 1956, there were no credit cards. In 1970, only 15% of Americans have credit cards. In 1978, only millionaires could own these “gold” or “platinum” credit cards. In 1980s, banks realized the extreme profit opportunity with credit card, using 18-32% yearly rate in charges for money loaned. Today, almost everyone with a wallet has a credit card or two. Credit cards are marketed aggressively in a sophisticated manner. Over 6 billion are sent out into our mailboxes with that “pre-approved” credit card Visa, Discover Card, or Master Card.

Today, having debt in credit cards and/or student loans has become normal – the American way of life! The 75% of the Fortune 400 people, basically those who are wealthy and rich, disagreed with this normal way of life. These rich people paid everything in cash. These people worked hard.

An older lady told me once, “Mike, live the American dream but never forget where you came from, your heritage, and your culture.” I honestly didn’t know what she meant but I agreed anyways. I’m starting to realize that she might have been talking about my values and principles. This applied to my personal financing.

One thing I came to realize is that I’ve never learned about personal financing while taking every other possible academic subject there is in college. So, by the time I got out of college, I was in debt. Eventually, I will be debt-free and wants to stay that way. I will pay everything in cash and invest the rest because I am tired of paying interest. I want to eventually live on my investment income.

I use credit card only to maintain or increase my FICO score, which is currently nearing 800. Otherwise, I pay everything in cash or debit. I will never fall for credit card purchases, which I don’t have money for. In the future, I want my money to work harder that I can. Investment! Money is a reliable worker. It is never late, never sick, and can never get pregnant. Money just needs a disciplined master. My goal at this time is to pay off the rest of my student loan. I’m nearing DEBT-FREE!

What is your behavior towards your personal finance? Paying the minimum on that card for the rest of your life? Buy cars you don’t have money for so you have payments for the remainder of your life? Lenders are selling you interest and neither a services nor products. You are a slave to the lenders.

Spend less than what you make. Don’t fall for borrowing too much money just because you can make minimum payments. Credit Cards are the worst. You will drown yourself in payments and it’s not even funny. Soon, collections will be out to get you. Invest your saving money so that someday, your money will work harder than you. Imagine living off of your investment income.