How to Resolve Information on a Credit Report

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The information in your credit report can affect many areas of your life. It’s important to keep track of what’s in it. If you find incorrect information, it’s your job to dispute it and have it removed from your credit report. ONLY YOU are looking out for your own credit rating, no one else… Pay attention to your report!

There are actually three credit reporting bureaus: Experian, Equifax, and Trans Union. Make sure you are monitoring all three of these credit reports. It’s essential because the information can differ from report to report.

Follow this process to ensure your credit reports are accurate: Request your credit report

There are a few methods to track your credit score and credit reports. The fastest way to get a copy of your credit report is to visit Annual Credit Report. You’re entitled to receive a copy of each of your three reports for free once per year.

If you haven’t been following what’s in your credit reports, start out by requesting all three reports at once. The information they contain can actually vary quite significantly, depending on which creditor has reported what to them. Differences from one report to another can amount to a significant credit score difference.

Once you’ve obtained and corrected past information in your reports, you can stay updated by spreading out your credit report requests to every 4 months. Request your report from one of the credit reporting agencies every 4 months. Over the course of a year, you’ll have received all three.

Promptly correct mistakes in all 3 of them if you find an error.

Information accuracy

Comb over all three credit reports carefully in search of incorrect information. Any detail that isn’t right should be changed, even if it’s just a wrong address, because these pieces of information can have an impact on how lenders view you when considering your loan application.

Contact the credit reporting agency

If you find information that needs to be changed in your credit report, the next step is to contact the agency (Experian, Equifax, or Trans Union) of that specific report. It can take some time to dispute incorrect information, so the sooner you do it, the better.

Writing a dispute letter

You can find sample dispute letters online that will give you a good starting point for writing this letter. Be professional, use facts and not emotions, and include all of the necessary proof that the information is incorrect so the credit agency can make the change.

Be sure to include copies of any documents that support your position. Do not include the originals.

The process of disputing an item

Typically, the credit agency will contact the company that reported the false information, and an investigation will follow to determine whether or not the information is inaccurate.

Add accounts to your file

If you are missing credit accounts on your credit file, then you may want to ensure that missing information is added. You can make this happen by contacting the companies that aren’t reporting your credit history and asking them to begin reporting for you.

* Note: Not every company will want to report this information for you, so it can take some time for you to have this information added to your account. However, if you’re diligent, you should be able to have the information added

Follow up

Be sure to follow up on your requests if you don’t hear anything from the credit reporting agency within 30 days, as this is the normal length of time for an investigation.

The power is in your hands to keep your credit report in good standing. If there is inaccurate information in your credit report, or if important information is missing, then take the steps to get the information corrected. Your next job, home, or loan may depend on it. Are you checking your credit score and credit reports?

Mike Cavaggioni
Mike Cavaggioni

Mike Cavaggioni is an Active Duty Officer in the U.S. Navy, REALTOR-ASSOCIATE®, Real Estate Investor, and Finance Coach located in Honolulu, HI. He is the founder of Average Joe Finances and host of the Average Joe Finances Podcast. Mike owns real estate in Hawaii and Virginia and is building a community for people to come together to learn and build their wealth.

The Market is Crazy! Get In, or Get Out?

Posted Leave a commentPosted in Finances, Investing, Stock Market

The title of this post is what I keep seeing and hearing daily. I joked around with some people at work talking about how I was going to pull everything out of the stock market after the President was diagnosed with Covid-19. The funny thing is, while I was joking, other people said that they fully intend to do just that. This reminded me about how important it is to “stay the course” as we say in the Navy.

It has been clear cut to me that time in the market is more important than timing the market. As we continue down this volatile road of uncertainty, it is important that people do not look at market dips as losing money. YOU ARE NOT LOSING MONEY! Your assets are simply losing value.

Now, let’s take a look at the stock market historically…

https://www.seeitmarket.com/comparing-todays-stock-market-with-the-1970s

Some Bumps Along the Way, but Steady Gains

The portion highlighted in yellow are the dips that happened back in the 1970’s. If you look further back, you can see when the great depression happened in the 1930’s. The main thing I want to point out with this graph is simple… Look at the trend even after all of the dips. What does the Dow Jones continue to do? Over the years, it continues going up…

These dips should be looked at as buying opportunities to purchase stocks at a “discounted” price. Your focus should be on the cost average of each stock you purchase versus the most recent price you paid.

What are your goals?

How you invest should depend on your lifestyle and your goals. Day traders and swing like to buy into individual stocks and us several indicators to know when to buy and when to sell. Buy and hold investors like index funds, exchange-traded funds (ETFs), and diversifying individual stocks. I happen to be a fan of index funds and ETFs vice individual stocks. With an index fund, you are getting a piece of every company in that fund. If one particular company tanks, you are still safe. Index funds/ETFs like the Dow Jones above are consistent in constantly gaining value over time. I do buy individual stocks just to play around with, but it’s nothing serious. Most of the individual stocks I buy are not even “stocks” because they are mostly Real Estate Investment Trusts (REIT). I like REITs because they are normally steady in value and have exceptional dividend returns. I don’t even collect the dividends from those as I set all of them in to a dividend reinvestment plan (DRIP) back into the fund to reinvest into the REIT and buy more.

While you don’t have to invest the same way I do, you should most definitely have a strategy with the assets you are investing in. If you are new to investing, I would highly recommend that you speak with a professional or thoroughly research the asset class you are thinking about investing in. I am not a financial advisor and am only posting my thoughts and sharing what I am doing. However, I would be happy to assist you on your financial freedom journey. My email is always open if you want to reach out. Hope you all were able to get something out of this article. Also, be sure to check out our podcast.

Mike Cavaggioni
Mike Cavaggioni

Mike Cavaggioni is an Active Duty Officer in the U.S. Navy, REALTOR-ASSOCIATE®, Real Estate Investor, and Finance Coach located in Honolulu, HI. He is the founder of Average Joe Finances and host of the Average Joe Finances Podcast. Mike owns real estate in Hawaii and Virginia and is building a community for people to come together to learn and build their wealth.

Payroll Tax Deferral – What does it mean for you?

Posted Leave a commentPosted in Finances, General
Treasury Secretary Steve Mnuchin during a press briefing at the White House in Washington.
Kevin Lamarque | Reuters

Keeping this one short, sweet, and to the point.

Yesterday the U.S. Treasury Department released their guidance on how the President’s tax deferral would apply to companies.

Considerations

There is a key word everyone needs to focus on with this and that word is deferral. While your paycheck might look much nicer, it is important to know that a deferral means you will pay it back at a later time.

This isn’t all doom and gloom. There are things you can do to mitigate the impact of paying the taxes back.

What should you do if your company elects the deferral?

The important thing to do at this time is NOT SPEND THAT EXTRA MONEY! Look at your last paycheck and note how much FICA tax came out. When you get paid, take that amount and put it into a high-yield savings account, do not spend it!

The Fed is hoping this will cause an increase in spending to boost the economy. While this may happen, really consider saving your money and not spending it… yet.

What happens if the Fed forgives the deferral?

This would be the ideal situation for the taxpayer. If the Fed forgives the deferral, you get to keep it. Now your deferral is basically another stimulus check.

Now you can take that money and do whatever you want with it. Since you already did not expect to receive that money, consider investing it. This could be the opportunity for some people that have never invested before, to try their hand at it.

This will only help if you are employed.

This tax deferral will only help people that are currently employed. If you are currently unemployed, you will not see a benefit. This is an emergency action because our politicians cannot come to an agreement on the next stimulus. I am still hopeful that there will be something in the future to help those that are unemployed.

Related: Side Hustles

If you are unemployed and still struggling to find employment, try taking on a side hustle. I know many side hustles cost money to start, but there are many that do not. If you have a car, consider driving for Uber/Uber Eats or Lyft. There are other options as well such as Instacart, Door Dash, and Grub Hub.

Mike Cavaggioni
Mike Cavaggioni

Mike Cavaggioni is an Active Duty Officer in the U.S. Navy, REALTOR-ASSOCIATE®, Real Estate Investor, and Finance Coach located in Honolulu, HI. He is the founder of Average Joe Finances and host of the Average Joe Finances Podcast. Mike owns real estate in Hawaii and Virginia and is building a community for people to come together to learn and build their wealth.

Website Flipping

Posted 2 CommentsPosted in Finances
Website Flipping

Website Flipping

Website flipping… Is that actually something you can make money off of? I am here to tell you that yes, it most definitely is. Going through this process reminded me so much of flipping real estate. This is essentially the same thing. You are flipping digital real estate. Pretty neat!

Related: 6 Ways to Invest in Real Estate

I purchased a few domains a while back and opened a some Shopify stores to try my hand at eCommerce a bit. My day job made it difficult to keep up with my drop shipping store as I had to manually fulfill orders each time someone purchased a product. After feeling a bit overwhelmed, I let it sit for some time. I started doing some research on the international database of Google on how to sell a pre-built website. Well what would you know, it’s a thing! There are website brokers and escrow companies out there, just like we have in the real estate world.

Where Do You Sell?

In my excitement after finding Flippa, I decided to look at different niche products and build a starter store to sell. I won’t go into too much specifics to protect my buyer. I even outsourced some of the building of the store on Fiverr. After getting the niche product set up as well as 24 others, I built the site and launched it to play around and see how it was. Made a few sales without much effort and knew this would be a good store for someone.

So, I wanted to get at least $500 for it… I listed it for $1,000. I received an offer for $500, but decided to negotiate a bit and countered with $750. After some negotiation, I sold it for $715 (675 on Flippa and $40 more on the Marketplace Exchange). Either way, I was happy about these results.

Closing Statement

Can Be A Source of Steady Monthly Income

While pushing this transaction through, I found out about Shopify’s Partners program. You can legitimately build starter eCommerce stores and transfer ownership when complete. You can sell it to a buyer or even make one for a friend. Here is the awesome thing about building the store through Shopify partners. When the new owner takes over and starts paying for the Shopify plan, you receive a 20% commission of the monthly plan costs from Shopify. How cool is that?

This doesn’t just have to be Shopify. Maybe try building a blog on WordPress and helping someone start their new hobby or side hustle. You can even do this with social media accounts too. I was talking with someone at work who told me they knew a young entrepreneur in her 20s that was making an average of $18,000 a month flipping Instagram accounts. WHAT?! Yes… flipping social media accounts is also a thing. Wow! Keep thinking outside of the box and maybe you will find that little something that can turn into a big something.

Learn Something New

If you are stuck at home teleworking, or lost your job, consider learning just a small amount of CSS and HTML. You don’t need to know much, just enough to start making some of these Shopify stores through their partners program. If you build enough, you can have a nice monthly paycheck coming in for those efforts. Keep on being creative and coming up with ways to add value to yourself by learning new skills. Keep on learning and earning.

Bottom line, there is some decent money to made from a side hustle like this. Is it something I will pursue? Maybe, maybe not. I have many other projects I am working on, however, I can see this as a viable option as another source of income. I proved it can work and had a nice payday to show for it.

Mike Cavaggioni
Mike Cavaggioni

Mike Cavaggioni is an Active Duty Officer in the U.S. Navy, REALTOR-ASSOCIATE®, Real Estate Investor, and Finance Coach located in Honolulu, HI. He is the founder of Average Joe Finances and host of the Average Joe Finances Podcast. Mike owns real estate in Hawaii and Virginia and is building a community for people to come together to learn and build their wealth.

Debt Consolidation

Posted Leave a commentPosted in Budgeting, Finances, Investing

Debt Consolidation

This is a shorter article, but can hopefully be a very helpful one for those of you seeking out a way to consolidate all your debt. While debt consolidation is not something we would necessarily recommend, we understand that some people can benefit from it. As we have explained in previous posts, our favorite way to get out of debt is by doing the “debt snowball” method. I have personally explained how sometimes I am not the best disciplined when it comes to budgeting, which is why I leave myself some wiggle room. By consolidating your debt into one payment, this can make paying your debt off easier if you do not want to follow a budget. Let’s break it down.

Related: 7 Steps to Financial Freedom
Watch: Average Joe Finances Episode 2

Credit Cards…

If you have several credit cards and loans and can’t seem to get on top of them, a debt consolidation loan might be a good move for you. Many lenders are offering low APR loans to help consolidate debt. I know I kept getting letters in the mail from SoFi. I just kept throwing them out, but one day, decided to open one and see what they had going on.

They were offering me a loan up to $100k with a 6% interest rate. That’s pretty darn good if you ask me. I considered taking it and using it to buy more real estate, but I didn’t. I didn’t want to take on another loan as I was still paying off the most recent kitchen and bathroom remodel (ouch).

Though, it made me think. If I had a lot of debt and didn’t know where to start, this would be a great option. Think about it.  Most credit cards are between 12-22% APR, right? By put all of that debt into the loan, you would save 6-18% of your interest. Of course, there is still some strong discipline required to use this option. If you take out a loan and consolidate all of your credit card debt, you need to have the discipline to NOT TO SWIPE THAT CARD!

What else do they offer?

While looking into SoFi’s loan options, I was able to see the other options they offer. You can open a brokerage account with them to get started investing just like Robinhood and Webull. The interface is pretty easy to use. The offer fractional investing so you can own a piece of Amazon with as little as $5. Pretty neat. If you want to check out investing with SoFi, you can join here.

Related: Our Recommended Products

Bottom line, if you are going to take out a debt consolidation loan, consider all of your options first. Our first recommendation would be to snowball your debt as we talk about here. If you can’t do that, make sure you can secure a loan with a lower interest rate than your debt. This will help you pay it off quicker and save a little more in interest over time.

Check out what SoFi has to offer!

Mike Cavaggioni
Mike Cavaggioni

Mike Cavaggioni is an Active Duty Officer in the U.S. Navy, REALTOR-ASSOCIATE®, Real Estate Investor, and Finance Coach located in Honolulu, HI. He is the founder of Average Joe Finances and host of the Average Joe Finances Podcast. Mike owns real estate in Hawaii and Virginia and is building a community for people to come together to learn and build their wealth.

YouTube Channel and Site Updates

Posted Leave a commentPosted in General

We excited to announce that we now have a YouTube channel up and running. We will add more content to it as we continue to grow. Please check it out, like, and subscribe.

We also started recording our podcast. The podcast itself has not been officially released, but the YouTube video has the entire first episode.

We added a new section called Podcasts & Videos and you can check it out at the top of our page in the menu.

If you are interested in writing on the Average Joe Finance Blog, please email me through our Contact page.

We have also updated our Resources, Affiliate products, and Shop.

Thank you for all of the support and helping us grow the community. The Facebook Group has been an awesome source for those seeking out help or information.

Want Financial Freedom? 24 Reasons Why You Need a Financial Coach

Posted 2 CommentsPosted in Budgeting, Finances

Imagine being the boss of your life.
Imagine having no limit on how much money you can make.
Imagine feeling delighted when discussing your finances, instead of feeling sad and depressed.
A financial coach can help you achieve financial freedom.
Just as a doctor improves your physical health, a financial coach can boost your financial health.
In this guide, we’ll discuss the 24 reasons why having a financial coach can be beneficial for you.
But first, we’re going to briefly answer these questions:

  • What is a financial coach?
  • When should you work with a financial coach?
  • What is the difference between a financial coach and a financial advisor?

What is a Financial Coach?

A financial coach improves the money management skills of their clients.
Here is a brief outline of what a financial coach can do for you:

1) Study your spending habits
2) Discuss your financial goals with you
3) Develop a financial plan to accomplish your goals
4) Provide you with the tools and motivation you need to stay consistent
5) Help you work through your emotional money traumas so you can heal from them

Above all, a financial coach’s mission is to teach clients how to have a healthy relationship with money—so that money does not control their lives.
P.T. Barnum once said that “money is a terrible master but an excellent servant.”
After studying your finances, a financial coach will show you how to turn money into your servant.

When Should You Work with a Financial Coach?

Contrary to what some may believe, you don’t need to have millions of dollars to work with a financial coach.
In fact, some of my clients have debts, little to no savings, and imperfect spending habits.
If you’re in debt, a financial coach can help you develop a smart budgeting plan.
Also, if you make a high salary, a financial coach can help you allocate money for savings, investing, and your emergency fund. That way, you and your coach can develop a plan to boost your passive income.
No matter your situation, a financial coach can help.

However, the best time to work with a financial coach is before you need one.
But keep in mind, it’s never too late to hire a financial coach.

What is the Difference Between a Financial Coach and a Financial Advisor?

In general, a financial coach helps clients build a good relationship with money, deals with the emotions and money mindset so they can reach their financial goals effectively while a financial advisor helps clients with investing and wealth building. 
Typically, a financial advisor determines their fees based on a percentage of their client’s assets. While a financial coach usually charges a flat retainer fee or package rates.
Often, a financial advisor won’t work with you if you don’t meet their wealth requirement, while a financial coach will work with you even if you have little to no assets.
A financial coach isn’t licensed to advise you on investing, unlike a financial advisor. But what a coach can provide is the foundation you need to become an investor. Before you consider investing, you must have a healthy relationship with money.
Another major difference between a financial coach and a financial advisor is that a financial coach will not have an ongoing relationship with you. Of course, you can always contact your coach if you have questions or need advice.
But a financial coach’s main objective is to teach you how to become financially literate so you can better handle your finances.
When you hire a financial coach, she will show you how to fish so you can fish for yourself.
Do I want you to pay me to fish for you? Nope!
I’m all about empowering you to become your own financial expert.
So, are you ready to discuss the 24 reasons why you need a financial coach?
Great! Let’s begin. 😊

1) Understand How Emotions Affect Your Relationship with Money

Emotions control much of our behavior.
Often, we make buying decisions based on our feelings.
And the sneaky part is that we’re not even aware of this.
Furthermore, we tend to have an emotional connection to big brands like Mercedes-Benz.
And as you already know, big brand products can hurt your wallet—especially if you’re on a small budget.
That Gucci purse may look stylish, but it can set you back financially.
That Rolex watch may look flashy on your wrist, but it can prevent financial freedom.  
A financial coach can clarify how emotions are affecting your buying patterns.
I can explain to you the dangers of impulse purchasing.

​I can help you see the risks of neglecting your nest egg.
After speaking to you, a financial coach can detail what’s driving your behavior. Because often, it’s hard for us to be unbiased when analyzing ourselves. 

2) Develop the Right Mindset for Financial Growth

In her book Mindset: The New Psychology of Success, Carol Dweck introduced these two concepts: fixed mindset and growth mindset.
A fixed-mindset individual doubts that she’s capable of growth or change, whereas a growth-mindset individual believes she can improve her abilities through hard work and discipline.
Here’s an example showing the difference between the fixed mindset and growth mindset:
A fixed-minded person would say: “I will never be able to control my finances. I’m always going to be broke and in debt.”
A growth-minded person would say: “I may have some debt, but I just need to find a way to control my spending and increase my income. If I can’t figure this out on my own, the smartest thing to do is consult with a financial coach.” 😉
As a financial coach, I would explain why the growth mindset is crucial to your financial success. I would study your situation, learn more about you, and show you how you can benefit from a change of mindset.
Some of the things we would discuss are your spending habits and overall relationship with money.
The key is having the right mindset.
If you’re missing the right mindset, your chances of financial growth are slim.
Without the right mindset, you become your own worst enemy.
As a financial coach, I will teach you how to become your own best ally.

Related: 7 Steps to Financial Freedom

3) Receive Consistent Motivation to Control Your Finances

You may feel that conquering your financial burden is like climbing Mount Everest barefoot.
But a supportive financial coach can motivate you to keep climbing.
How?
By explaining to you that it’s all about taking one step at a time.
Think of it this way:
Boxers need a cornerman (or cornerwoman 😉) to encourage them to keep fighting and let them know they can win. 
Similarly, a financial coach will inspire you to knockout debt and become a financial champion.

4) Develop a Strong Financial Plan for Building Wealth

“When you fail to prepare, you’re preparing to fail.”
Basketball coach John Wooden is one of the many people credited with saying a variation of this quote.
Nonetheless, it’s powerful!
Because when you fail to prepare a solid financial plan, you’re preparing to fail.
A financial coach will help you develop an effective financial plan so you can start building wealth.
Imagine building your dream home.
To save yourself time, you would hire an architect to deliver your vision. An architect would know what’s required to make your dream home stable.
Well, it’s the same process with your financial dreams.
Thus, a financial coach is like an architect for financial planning.

5) Consistent Accountability for Consistent Results

Consistency brings results.
Want to know what the formula for success is?
Read this quote by Jeffrey Fry:
“The formula for success is 2% talent, 8% luck, and 90% of showing up every day.”
The more you show up, the better you naturally get.
And as you consistently show up, you gradually build your abilities.
Therefore, the best financial coaches hold you accountable for showing up. We make sure you’re prioritizing your financial plan.

6) Fix the Root of Financial Problems for Lasting Change

A certified financial coach will help you treat the causes of your money problems.  
When you only treat the symptoms, you’re ignoring the root cause of the condition.
An experienced financial coach will do the following:

  • Analyze your finances
  • Study your mentality
  • Develop a financial plan for you based on analysis

In addition, a savvy financial coach will educate you on the hidden fees that are costing you money—money that you could save or invest.

As a financial coach, I prioritize helping you reach financial freedom. But the first stage is fixing the root causes of your financial problems.
Once we treat the cause, we’ll produce lasting change.

Related: 3 Simple Money Saving Tips

7) Work with a Trusted Personal Confidant with Vast Experience

A financial coach is your personal confidant—someone who actually cares about you and your future. 
As your financial coach, I would create a comfortable environment for you to discuss your finances. A judgment-free environment.
Let me tell you a little about myself:
In 2012, I sold my condo in the Bay Area.
Sounds great, right?
But it wasn’t.
The problem was that it was a short sale.
Unfortunately, I lost out on a lot of equity on a property that’s now worth a lot of money.
When I recall that mistake, does it hurt?
A little.
But I learned from it.
That experience made me stronger, wiser.  
If I had a financial coach back then, I could have been saved from that mistake.
Fast forward years later, my goal is to prevent you from making similar mistakes.
I want to improve your relationship with money and assets.
That’s why I became a financial coach.
I’m on a mission to give you the tools you’ll need to become financially free.
And that’s the type of mentality your financial coach (aka trusted personal confidant) should have.

8) Achieve Greater Happiness from Seeing Results

When you start seeing results from our work, you’ll feel rejuvenated. And the more results you see, the more inspired you’ll become.
But you must always remember that it takes time to see results.
As you honor your financial plan, you’ll start to see your world change.

You’ll feel empowered knowing that you’ve taken control of your personal finances.
When you’re happy, it makes it easier to use the awesome power of positive energy. And with positive energy, you make the journey easier for yourself.
How so?
Because you’ll feel much more encouraged to conquer your financial plan.
But don’t worry, as your financial coach, I’d help you along the way.

9) Discover Creative Solutions for Money Problems

Sometimes a problem requires an outside-the-box solution. Specifically, the type of solution that involves creativity.
Michael Michalko wrote a wonderful article on creativity.
He said that being a genius is not about having a 1600 SAT score. It’s not about being able to speak eight languages before you can walk.
And it’s not about being able to play the piano blindfolded. 😊
It’s about the ability to construct creative ways to solve problems.
Generally, when we face a new problem, we look for solutions that we’ve used for similar problems. 
But that’s not what geniuses do.
They have a different reaction when they face a new problem.
Geniuses ask questions like:

  • “How many different ways can I analyze this problem?”
  • “How can I look at this problem from a different angle?”
  • “If I see this problem through different lenses, can I come up with solutions I would have never thought of?”
  • “How many different ways can I solve this problem?”

By asking these questions, a genius can produce unique solutions to challenging problems. 
 
And how are they able to do this?
 
They force themselves to tap into their creativity. 
 
So, any time you tap into your creativity, you’re tapping into your inner genius. 
 
As your financial coach, I can help you devise creative ways to solve your money problems. I can inspire you to become a financial genius. 

10) Improve Your Financial Habits

As human beings, we’re creatures of habit.
It’s so easy for us to revert back to old, hard-to-shake routines.
When it comes to money, you must have the right habits.
Because the dangerous thing about habits is that sometimes, you might not even know they exist.
A financial coach can point out your financial habits, and provide solutions so you can break the bad habits.
The truth is, we are our habits. We are what we do every day.
As your financial coach, my job is to make sure you develop the habits that lead to financial freedom.

11) Learn Why You Must Escape the Rat Race

The rat race is a suffocating trap.

The more time you spend stuck there, the easier it is to feel like it’s your destiny.
But it does not have to be!
Life is too short to be spending it in misery. You need to be enjoying life.
Before you can escape the rat race, someone needs to tell you it’s possible.
As your financial coach, I would not only tell you, but also show you how. 

Here’s a brief background on me:
At age 20, I immigrated to the United States from the Philippines.
New continent, new country.
It almost felt like a new world.
After being in the states for a few months, my aunt kicked me out of her apartment for not following a 10pm curfew.
I had to find a way to survive. Sink or swim.
To save money, I worked 20 to 40 hours of overtime.
But you know what working all of those hours allowed me to do?
Become a speed typer. A skill that helped me become more time-efficient.
Eventually, I continued my college education—while working full time.
Those were hard times.
I had absolutely no social life. It was work work work …
But I never gave up.
And my reward for not giving up was getting a nice job in the Data Analytics field.
Years later, I shifted to Corporate Finance.
From there, I made one of the best decisions of my life: I became a financial coach.
With hard work, I was able to start and grow my business as a financial coach.
Indeed, following my passion allowed me to quit my corporate job and become my own boss.
I tell you all of this not to brag, but to inspire you, to let you know that if I can escape the rat race, YOU can as well.  

12) Learn to Treat Your Finances as a Business so You can Build Your Wealth

The most effective way to escape the rat race is to treat your finances as you would a business.
You need to track all of your income and expenses just as a corporation tracks its income sheet.
You need to track all your assets and liabilities just as a corporation monitors its balance sheet.
And similar to a corporation, you want to increase your assets and decrease your liabilities.
Realize that you are the CEO of your personal finances.
As a financial coach, I would be there to help you become the type of CEO who maximizes cash flow.
Because that’s how you build wealth.

13) Discover Proven Methods for Financial Stability

Over the years, I have worked with numerous clients.
I have seen what works and what doesn’t for achieving financial stability.
Although each client is unique, you start to see patterns after you’ve worked with many clients. You see key elements that each has in common.
Here are just some of the proven methods for financial stability:

  • Decreasing your debt
  • Increasing your income
  • Controlling your spending habits

The proven methods I just listed are universal.
Unfortunately, there’s a lot of misinformation online.
A certified financial coach will help you separate the myths from the truth.

14) Learn the Importance of Investing and How It Works

A financial coach teaches the value of investing and having your money work for you. 
You want to continually grow your passive income.
But money isn’t the only thing you can invest. Time is another.
When you invest time in becoming more financially literate, you will receive a healthy return based on how committed you are. 
Smart investing stabilizes your long-term financial security.
Indeed, the best financial coaches teach their clients the value of investing time and money prudently.

15) Understand Financial Terms; They’re Less Scary Than You Think

Elite financial coaches eliminate the scariness from financial terms.
Often, when we’re afraid of something, we’re less likely to address it. 

Remember, as a child at night, being afraid that there was someone in your closet or underneath your bed?
And if you heard a tiny creak, you would think there’s some big, frightening monster in your room. Especially if it was pitch dark.
So, you’d call your mom, and she’d turn on the lights and show you that there’s no slimy, hairy creature in your room waiting to pounce on you.
Well, financial terms can have that same effect on you as the bogeyman.
But financial terms don’t always have to be something that causes you to hide under your blanket.
Realize that the financial expert wasn’t always an expert on financial terms.  
So, the great thing about working with a financial coach is that she can help take the mystery out of finances.
An experienced financial coach will show you that there’s nothing to be afraid of when it comes to financial terms. And that you don’t have to feel incompetent if you’re new to finance.  
We all start out as beginners in the world of finance.

16) Learn to Become Your Own Financial Expert

As a financial coach, I want you to become your own financial expert.
I want to give you the tools for you to learn how to think for yourself. When you’re able to think for yourself, you can spot the financial opportunities around you.
When you become a financial expert, it’s like having a special pair of binoculars—you see things others don’t. As a result, you can capitalize on opportunities before they become too crowded.

17) Receive Access to the Right Information that will Help You Grow

Unfortunately, there is a lot of misinformation out there. The type of information that does more harm than good.
Think of it like this:
Imagine having a tomato garden.
The worst thing you can do is feed your garden toxic chemicals. That would prevent your tomatoes from growing and eventually destroy your garden.
You want to feed your garden clean water and fertilizer so it can grow.
Similarly, your mind needs the right information, not toxic information.
A financial coach ensures that you have the right information so you can grow financially.

18) Learn at a Comfortable Pace  

The best financial coaches create a pressure-free environment for their clients.
When you’re comfortable, it’s easier to connect the financial dots.
Indeed, it takes time to adjust your relationship with money.
That’s why I follow the motto: one step at a time.

Each session you have with me will build upon the previous one.
The last thing I would want is for a client to feel like we’re moving too fast.
My goal is to make you feel safe, not discourage you.

19) Create a Budget that’s Best for You

Budget mastery is one of the first steps to achieving personal finance mastery.
Your budget instructs you on how to handle your money. 
Not everyone has the same financial situation. Therefore, a financial coach works with you to develop a budget tailored for you

Related: Budgeting

20) Learn how to Measure and Track Your Results

An experienced financial coach will teach you how to measure and track your results.
Think of it like this:
To improve, a long-distance runner monitors how many miles she ran and how long it took her.
It’s the same with you and your finances. 
When you measure and track, you’re able to see if you’re improving. Furthermore, you enhance your chances of success because you can eliminate what doesn’t work, keep what does, and discover what’s missing.
As you start to see results, you’ll be inspired to stay consistent, so you can see more.

21) Ensure You’re Maximizing Your Employee Benefits

When you’re working for a company, it’s best to take advantage of employee benefits.
One example is the 401(k) plan.
If used properly, the 401(k) plan can help you build your nest egg.
Here’s a brief summary of what to do:
First, you would find out how much your employer is willing to match. Then, you make sure that, at minimum, you match it.
For example, if your employer is willing to match $300 each month. Try to make sure you set aside at least $300 for your 401 (K) plan.
That’s just one example of maximizing your employee benefits.
As your financial coach, we would discuss more examples so you can take advantage of any available opportunity to stabilize your finances.

22) Receive Help with Managing Student Loan Debt

As of 2020, student loan debt is about $1.56 trillion in the U.S.
And it’s only increasing.
According to Forbes, 45 million people have student loan debt.
So, as you can see, that’s a lot of people and a lot of debt.
Like credit card debt, student loan debt can be a drain on your finances.
Before you can pay off any type of debt, you’ll need a strategy.
Based on your situation, a financial coach can help you decide which strategy will work best for you.

23) Understand Cash Flow Management

Cash flow management is crucial to your financial growth. It’s about understanding where your money is coming from and where it’s going.
Ultimately, your goal is to have a positive cash flow each month. That’s your first step to financial freedom. If you don’t take that first step, you won’t be able to get there.
After reviewing your finances, a financial coach can show you how you can become cash flow positive.

24) Learn About Your Retirement Options

As an employee, there are retirement options available to you.
Earlier in this guide, I briefly mentioned the 401 (K) plan.
But there are more options, such as the Roth IRA and a traditional IRA. (A financial coach can explain the differences between the two.)
It’s never too early to learn about your retirement options.
We all want to be able to enjoy retirement—without fear of running out of money and having to return to work.

That’s why I always advocate financial freedom.
When you’re financially free, you can retire on your own terms.

Take Control of Your Destiny
Financial freedom doesn’t have to be this distant dream.
It is achievable.
Early retirement doesn’t have to be a carrot dangling in front of your face.
It is reachable.
A financial coach can guide you towards the future you desire.
Today, we discussed 24 reasons why you need a financial coach.
Yet, I would like to end this guide with one last point:
None of us has the power to change the past.
But we all have the power to control what we do today.
Starting right now, you can lay the groundwork for a brighter future. A brighter financial future.

Christine Teh
Christine Teh

Christine Teh is a personal financial coach from the San Francisco Bay Area. She helps clients from all over the world virtually by helping them build a great relationship with money so they can achieve their financial goals. Feel free to check out her website and follow her on the different social media platforms below.

Should I Refinance My Home?

Posted Leave a commentPosted in Finances, Real Estate

Should I Refinance My Home?

It’s been a little bit since I have written a post, but all for good reason. I took some time to finally finish my real estate license course and am now waiting on my certificate. Once I get that, I can take my real estate license examination. I’m pretty excited to continue this journey.

As the title of this post shows, the question is, should you refinance your home. Being that I recently refinanced my home at the end of March, it wouldn’t be a good move for me. However, percentage rates have dropped another half percent from when I refinanced!

When I refinanced my home in March, I was able to lock in a 2.75% rate and get a $10,000 credit to close. I lowered my mortgage payment by almost $400 a month! Now that rates are 2.25%, I could have saved an additional $200+ a month, but that’s ok.

There are many different reasons you may want to refinance your home…

  • It could be to pull out some equity to pay off debt or invest in more real estate.
    • With this option, you would pull equity out to pay off any high-interest credit cards or loans.
    • You could also take this equity to use as a down payment on an investment property.
  • Maybe you want to lower your monthly mortgage payment (my reason for refinancing).
    • Lowering your interest rate can save you a lot of money over the life of the loan. Depending on your goals, you can continue paying your old payment and build equity faster in your home. You can even pay off your home faster this way.
    • Another thing you can do is invest the money that you are saving on your monthly mortgage payment
  • You could refinance to pay off your home faster (moving from a 30-year to a 15-year mortgage).
    • Dropping from a 30-year to 15-year mortgage can get you an even lower interest rate, but your monthly payment will most likely be higher.
  • You may even have an adjustable-rate mortgage and you are changing it to a fixed-rate mortgage.
    • Adjustable-rate mortgages can be very risky. You may start at a lower rate than everyone else, but then in 5, 7, or 10 years, your rate can readjust to the current rate.
    • With rates this low, refinancing out of an ARM can be a safer move to make.

Whatever your reason, now is a good time to consider refinancing.

According to this Forbes article, the Federal Reserve is expecting the economy to contract 6.5% this year and will keep interest rates near 0% until 2022. With the rates staying this low, the opportunity to refinance may last for a while. Something to keep in mind is what happened back in March when so many of us refinanced. Many lenders have stepped up their requirements to qualify for a loan. For example, back in April, this CNBC article shows that JP Morgan Chase raised their credit score requirement from 640 to 700.

With all of the different ways to refinance, you should research which options work best for you. Refinancing might not even be an option for you at this time. However, if you are considering it, we recommend that you speak with a professional. A loan broker may be a good option as they can look at many lenders at once to find you the best rate. Hopefully, this article provides something to thought-provoking for you to consider.

Mike Cavaggioni
Mike Cavaggioni

Mike Cavaggioni is an Active Duty Officer in the U.S. Navy, REALTOR-ASSOCIATE®, Real Estate Investor, and Finance Coach located in Honolulu, HI. He is the founder of Average Joe Finances and host of the Average Joe Finances Podcast. Mike owns real estate in Hawaii and Virginia and is building a community for people to come together to learn and build their wealth.

I am Afraid of Being Laid Off

Posted 5 CommentsPosted in Budgeting, Finances

I am Afraid of Being Laid Off

Someone asked me this recently. This is what I would advise my clients or anyone who come to me with this concern.

First of all, there is no such thing as job security. You can get laid off anytime. Companies always make business decisions like this that you have no control over. 

I’d say focus on what you can control.

Have a strong financial foundation and a strong financial plan to ride through whatever life throws at you.

Be it the market crash or being laid off, you won’t be afraid of them.

What does having a strong foundation mean?

It means you have a strong budget, enough emergency fund, a strong financial portfolio and a strong financial plan for different situations that happen in your life.

What consists of a strong budget?

It means you are always on positive cash flow and you have a handle of your month-to-month expenses and don’t carry any debt like credit cards and personal loans, among other debts except for a mortgage.

How much is enough money to put aside in your emergency fund?

My answer to this is quite unconventional.

I would ask you, how confident are you in your skills that you will get a job and how long will it take you to get another job?

If you say it will only take you a month and if you’re comfortable with having one or two months’ worth of living expenses at a MINIMUM in your savings account, then I’d say that’s your answer.

Why is that?

I think savings is not the best place to park your money if your intention is for growth. Having a lot of money in savings is good if you are currently saving for a house or something big in the near future. But in terms of growth, you’re better off figuring out other places to invest your money on.

Part of having a strong financial plan is also having strong retirement models based on different scenarios.

Before I quit my corporate job, I made sure that it didn’t affect my retirement plan drastically. That gave me the confidence to take the leap while I continue to grow my business. I also help my clients build different retirement models based on their goals and how they envision their retirement to be. 

Bottom line is, don’t be afraid of uncontrollable events like being laid off.

Take control of your finances and you won’t be. This concept applies to the fear of the market crash as well.

What common fears do you have regarding being laid off? I’ll be glad to give some tips if you have any questions in the comments below.👇

Christine Teh
Christine Teh

Christine Teh is a personal financial coach from the San Francisco Bay Area. She helps clients from all over the world virtually by helping them build a great relationship with money so they can achieve their financial goals. Feel free to check out her website and follow her on the different social media platforms below.

3 Simple Money Saving Tips

Posted 6 CommentsPosted in Budgeting, Finances

Sometimes we spend money without even thinking about it. In the society we live in today, it’s very easy to just swipe your debit or credit card when making a purchase. No one really carries money around anymore, do they? However, it’s been proven time and time again that if you physically paid with cash each transaction, you would spend less. This has to do with the psychology behind it. You are physically handing your money over and watching it go into the register. However, when we swipe our credit or debit cards, it’s less personal and more transactional. When you apply more thought to your spending and what you are spending it on, you tend to spend less.

As we all continue on our journey towards financial independence, there are some simple and effective ways you can save more money. We are looking at this from the perspective of the everyday 9-5 blue collar employee and basing it off of 253 workdays in the year.

Let’s discuss three simple tips that you can use to save a significant amount of money each year.

Related: 7 Steps to Financial Freedom

1. BUYING LUNCH AT WORK

Heresy, I know… But seriously… people do not realize just how much they spend when they go out to eat. I happen to personally know a HUGE offender of this… Yeah, it’s me… Let’s go over some numbers, shall we?

The average cost of eating out for lunch can range between $9-$12 a day (even more here in Hawaii ). If you are eating out for lunch when you go to work, you are spending $2,277-$3,036 a year.

Consider making your own lunch. Maybe meal prep or make a little extra dinner to bring in the left overs. I am with you all on this one. I need to get better at this!

2. DO NOT BUY COFFEE EVERYDAY

Now, I am not saying to give up coffee… because if we all did that, the world itself may cease to function. I happen to love coffee. I absolutely refuse to buy coffee out in town unless I have to or I am meeting up with people for coffee. However, I personally know people who get their daily fix of Starbucks. They say that they cannot live without… Well, then they are living without $620-$1,860 a year. This is based off of regular drip coffee sizes “Tall” costing $1.85 per cup, “Grande” $2.10 per cup, and “Venti” $2.45 per cup. Let’s not even talk about the $5+specialty drinks and lattes… They are costing you $1265 per year! Even going to 7-11 or WaWa and getting their $1 coffee is costing you $253-$759 per year. These amounts may not seem like much, but think about this… A whole pot of coffee costs approximately 70 cents to make… That’s 8 cups of coffee for 70 cents. That’s some easy savings right there.

Food for thought – 1/3 of American’s spend more money on coffee than they put into savings according to Acorns.

3. EATING OUT FOR DINNER

This is the big one! I get it, making dinner every day can be tedious. However, if you looked at the numbers on going out to eat, it may sway your way of thinking. Let’s say you and significant other like to go out and have a nice date night once a week. The average cost of dinner for two is around $50. If you do this every week, you are spending $2,600 a year. Double this to $5,200 for a family of four! If a family of four ate out once a month instead of once a week, you can save $4,000. Even if you didn’t want to invest the money, there’s your next family vacation.

Conclusion

These 3 simple tips can go a long way. Putting all of these together, we can save a little over $10,000. If you saved $10,000 and invested it into index funds averaging just 7% each year (Around $833.33 per month), in 10 years, you would have $157,835.44. In 20 years, it would be $488, 650.13

We really hope that some of you can benefit from making these small changes in your spending habits. More great options can be found in our article about 7 Steps to Financial Freedom.

Mike Cavaggioni
Mike Cavaggioni

Mike Cavaggioni is an Active Duty Officer in the U.S. Navy, REALTOR-ASSOCIATE®, Real Estate Investor, and Finance Coach located in Honolulu, HI. He is the founder of Average Joe Finances and host of the Average Joe Finances Podcast. Mike owns real estate in Hawaii and Virginia and is building a community for people to come together to learn and build their wealth.