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I did OK, but my venture into that are was over 35 years ago. I took out mostly recyclable metals. It almost brings tears to my eyes when I think of the hardwood floors and woodwork that were bulldozed in a couple of the buildings I was in. One commercial building had marble floors that are now in a dump somewhere!Quote:
Originally Posted by MJZiggy
I've heard you can really screw up your credit rating if you do that. They leave the credit card you transferred from open and you end up with a screwed up debt to credit available (is that right?) ratio.Quote:
Originally Posted by MadtownPacker
Good Lord don't tell me stuff like that!! I spent months trying to find decent reclaimed flooring when we remodeled last year. It was more expensive than new and I finally gave up and put bamboo down.Quote:
Originally Posted by shamrockfan
Hmm, but the ratio is based on actual money owed not how many different accounts you have. Right?Quote:
Originally Posted by MJZiggy
Retirement plans
Wow, if I only knew at 22 what I know now!
As others have said, 401k, 401k, 401k! Especially if your employer matches. The match is a "guaranteed" return on your investment, plus you get the earnings on both portions, providing you stay long enough to "vest". Starting in your 20s, even with a reaonsable contribution that is not the maximum, you will do oh so very well!
I worked only for about 12 years at a place that had a 401k. That started a little over 20 years ago, and ended about 10 years ago. Initially I contributed less than the max, for a time I maxed out, but with a large family and some unforeseen things had to cut back some the last few years. For half the time the company matched 50 cents on the dollar. For the rest of the time, there was no match. When I left, the 401k was rolled over into an IRA. Looking back on the cash I contributed, the current value is worth about 6 times what cash I put in. Since my contributions were pre-tax, the net effect on my take-home pay was even less. For every dollar in take home pay that I shorted myself, I probably have about 8 dollars in the account today. Just think if these stretched out for another 20 years?
Compounding interest is so huge on the investments you will make in your 20s. Put whatever you can into it, no matter how small it seems to you today. You will thank yourself 35 years from now.
Investing
Stocks, bonds, mutual funds, etc. I've done good, I've done bad. DOn't even consider these until you have maxed out your 401k or other company matching program you might have. Returns on those are much better for what you put into them.
The hardest thing that an individual has to cope with in investing is keeping emotions out of it. Make a decision, and DON"T LOOK BACK, except to learn from what you did. If you sold and made money, don't regret that it went even higher after you sold. If you wait too long to sell, don't dwell on it. No one buys at the absolute bottom and sells at the absolute peak. The key is make money when you can and minimize losses when possible.
To be honest, I think most people need the advice of a professional in this area, unless you have lots of time to put into it. I don't mean that you should do everything they tell you, but let them sift through the chaff and make suggestions for you to consider. They can be a check on your emotions, too. Alternatively, become an expert on a few companies or in a few areas. But know the companies, where they've been and where they are headed.
Whatever you do, diversify. Thats why mutual funds can be good, because they provide some natural diversification, even within a fund. Even more so if you buy funds empahsizing different market segments.
Let me see if I can get this right. It's based on how much money you owe against the credit limits of all your accounts. I'm guessing the worry is that if you take out a mortgage with having only $2K on credit cards, but have $40K available to you, you could go out and amass all sorts of debt and default on your loan. Can any of the numbers people tell me if that's why?Quote:
Originally Posted by MadtownPacker
Thanks for the great advice Rock. Ive only been doing it for 2 years and after 4 years you are "vested" which means its all yours to keep right?.
I read an article about a company that wants to "mine" older landfills just because of all the stuff in them.Quote:
Originally Posted by MJZiggy
I have several clients who have did the credit card at 0% flipping for some time. If you do it right this it should not seriously damage your credit score.Quote:
Originally Posted by MadtownPacker
Your credit scores are based on a number of things, a few of which include payments made on time and delinquent payments (by far the most important factor), any current liens or judgements, revolving debt balances, and the number of times your credit is pulled by companies. Having a few unused credit cards should not hurt you much unless you are carrying balances and not making payments on time.
Remember each time you sign up for a no interest rate CC that company has to pull your credit, and if you do that too much, it will damage your credit. If you are doing this with one or two cards (resulting in 1-2 credit checks per year), this won't have a lot of adverse impact from the credit pulls.
But if people are doing this, and then running up these cards and never paying any principal off, this will have a long term bad effect because their debt loads are constantly going the wrong way.
But the #1 factor in building credit is making your payments on time. Every time you make a payment to a CC company, even a minimal payment, if it's on time they report this to the credit bureau and that helps your score. Likewise, if your bill is 2G and you don't have much money and neglect to send in a minimum payment, they will report you being late and that will have a very bad effect on your score.
As a banker, the first details I look at on a credit report (after the scores) are how many late payments people have made in their lifespan. People with perfect credit can usually get approved for much higher payments on a loan than they normally want or can afford.
Thanks B!! :D
If you are 100% vested after four years. Things may be different now, but some that I knew about before had staged vesting, where after a few years you vested in 25% of the company contributions, a few years later it was 50%, etc. The company I was at it took 10 years to vest 100% in their contributions. I think some of that has changed since many companies no longer offer traditional pension plans anymore. Vesting periods in 401ks have become shorter.Quote:
Originally Posted by MadtownPacker
Quote:
Originally Posted by MJZiggy
If you are maxed out on all of your credit limits then the current debt ratios are high, which has an adverse effect on credit.
I don't think individuals are penalized at all credit wise if they have access to 40G but only have balances of 2500. In reality the reason they have so much available is because their credit is good.
Quote:
Originally Posted by shamrockfan
In WI most companies have a 5 year vesting period from what I see. If Mad has 4 years that would mean after 4 years all company contrubitions as well as his own are his. And most likely, if it's 4, then each year you work there you are 25% more vested.
Yeah its 100% after 4 years. After reading all this stuff Im thinking I might have a sweet deal cuz after 6 years they match $4 for every $1 of mine. After like 10 years it is $6 for every $1.Quote:
Originally Posted by shamrockfan
Far be it from me to argue with a banker, but I will!Quote:
Originally Posted by Bretsky
I don't think that is entirely correct. Its not a serious penalty, but your credit score can be decreased for high outstanding available credit lines. I was real curious when the annual free reports came out last year, so I called and talked to a couple. One of the things I found out was that if you have a lot of unused credit cards, such that you could, if you were of a mind to do it, go out and charge $50,000 tomorrow using 25 different cards, you will lose some score points because of it.
The solution is simple. You call some of the unused card companies, and formally cancel the card. You can even request them to report that to the credit agencies.
It's kind of a Catch 22, though, because it also is not good if you have no available credit, or so I was told. It's good to have some, but not too much!
That is pretty impressive. You make 400% on your money the year you invest it! What is the maximum that you are allowed to contribute that they will match? Whatever it is, do it!!!!Quote:
Originally Posted by MadtownPacker
I guess I'm lucky. My company matches 100% of the first 3% you put in and 50% on the next 2% and it's fully vested - immediately. I then have plan setup with my financial company that pours the money into diversified accounts automatically. Very little work required on my end.Quote:
Originally Posted by MadtownPacker
I can buy this, but rather than penalized "at all" I will preface by saying penalized "minimally".Quote:
Originally Posted by shamrockfan
I've witnessed scores dip hard after the fact when people who had a lot of revolving credit available used it.
And I have seen the message "too many revolving accounts" on credit reports so you are right in that it has some impact.
But to take things a bit further, most of the time when I see "too many revolving accounts" it is on a credit report with a person who has great credit.
And in the notes on each credit report, it lists reasons (normally four) of why you don't have a "perfect" score. And if there are no great reasons why somebody's score is 825 instead of 850 that seems to be the message it spits out on the credit report every time.
That being said, being responsible and making payments on time is most of what defines your credit.
Quote:
Originally Posted by shamrockfan
I'd agree that you have an amzing plan; that sounds too good to be true in Wisconsin. If you stay at that company forever you are pretty much going to retire wealthy.