Saturday, June 28, 2014

Credit score update and new credit card approval

I regularly monitor my credit to make sure there are no red flags.  Before I apply for any new credit, the first thing I do is make sure I have a good credit score.  I like to make sure my score is at least over 740 before applying for a new credit card bonus offer. 

Your credit score
Your credit score is calculated based on these 5 factors:

35%: Payment History (how timely and consistent your payments are)
30%: Credit Utilization (debt-to-credit ratio)
15%: Length of Credit History (when did you get your first credit card?)
10%: Types of credit used (mix of credit and loans, revolving, consumer finance, mortgage)
10%: Recent searches for credit (hard inquiries and new accounts)   

There are 3 major credit reporting agencies: Experian, Transunion, and Equifax.  Each credit agency uses its own formula to calculate your score.  While you can directly buy your FICO score online at, many other online sites offer credit scores as well.  Because different companies use different credit criteria, your credit scores will likely vary between different sources.

For most people, I do not recommend paying for your credit score.  There are plenty of good online websites that offer truly free credit scores and reports. These sites do NOT require your credit card information and the credit scores provided are really free, not some 7-day trial where they bill your credit card afterwards. 

Sites offering free credit scores that I recommend
Credit Karma gives you a simulated Transunion score and VantageScore.  You can update your credit score once a week.

CreditSesame gives you a simulated Experian score.  You can update your credit score once a month.

Quizzle gives you a simulated Equifax and VantageScore.  You can update your free credit score and report once every six months gives you a simulated Experian score that you can update once a month.

Some credit card companies provide free credit scores
If you are a Barclaycard credit card holder, you can get a free FICO score.  My favorite Barclaycard credit card is the ArrivalPlus MasterCard.

If you are an American Express credit card holder, you can get your free simulated Experian credit score and report once a year.  My favorite AMEX card is the Starwood Preferred Guest credit card.

Discover credit cards also offer free credit scores.  I won’t comment here because we don’t own any Discover cards. 

After checking my various credit scores, I had the confidence I needed to apply for another credit card!

Saturday, June 21, 2014

Maxing out my 401K

I am excited to share with you all that another goal in our investing journey has been reached: I am now maxing out my 401K!

If you had advised me to max out my 401K account a few years ago, I would have given you a dirty look and said something like "how the hell am I supposed to come up with $17,500 a year to invest into my 401K? I'm barely making ends meet!"
Market returns from the day I started investing in my company's 401K
Getting started with my 401K
I first started investing in my company 401K on October 1st, 2011 - the first day it was offered.  Since my company offered a 3% match on my contributions, I knew I wanted to invest at least 3% of each paycheck.  I was anxious to start saving for retirement, but I had no idea what to invest in. 

The HR department handed me a list of mutual fund investments to choose from, with a Target Date fund set as default.  At the time, I had a “financial advisor” and I asked him which investment I should choose.  I said "what about this 'aggressive' option?”  And he said "sure that sounds fine."  I didn’t think much about it because I was just glad to be investing in another tax advantaged account besides my Roth IRA.  Aggressive sounded like a good description for an investment choice. 

Wednesday, June 18, 2014

"I'll just work longer"

I read this interesting article on yahoo finance yesterday titled
Why ‘I’ll just work longer’ is no longer a good retirement plan.  Some of the statistics listed in the article are pretty sobering.  It’s a nice reminder for us to stay focused.

The number one reason most individuals put off retirement is money.  When you combine longer lifespans, stagnant wages, low savings rates, and poor health, it's easy to understand why many people stay in the workplace.  A recent study by Merrill Lynch found that 3 out of 4 workers in the U.S plan on working part time after they hit retirement age. 

For many individuals, working longer seems to be the only way to make it through retirement. 

"I'll just keep working."

The trouble with this reasoning is that it may not be possible for you to work longer.  Half of retirees leave the workforce much sooner than they expected.  People over 65 make up only 5.4% of the working population. 

60% of retirees retired earlier than expected due to unforeseen health problems.  Other retirees are forced to retire due to job layoffs.  Older individuals may find that it is difficult to get hired, because they lack the current training experiences and skill sets.  1 in 3 workers have saved less than $1,000 for retirement. 

Saving and investing consistently is the best way to reach your retirement goals.  Track and manage your spending.  When your retirement accounts reach a value 25 times your annual expenses, it's safe to retire.  Simply "working longer" shouldn't be your only plan.  Marrying rich or winning the lottery isn’t a realistic retirement plan either.

Look at your own financial situation and net worth.  Are you happy with where you’re at financially?  I’m not. 

Are you just going to work longer?  We don’t want to. 

My biggest regret is that we didn’t start investing sooner in our careers.  This being said, we have a plan in place and are working relentlessly to make up for lost time to reach financial freedom.

We have a plan in place and are working relentlessly to reach financial freedom.    

Monday, June 16, 2014

Costs of puppy ownership

It’s been quite a busy couple of weeks with baby Abby!  We’ve had her for a couple of weeks now and she has been an excellent fit.  We were lucky to be given the opportunity to adopt Abby for free.  We have also been lucky to receive a lot of dog “hand-me-downs” for free such as: collar, dog crate, bed, pee pads, toys, food, and treats.  This has saved us a lot of money in initial costs.  But this doesn’t mean dog ownership is cheap.  I wanted to share some of our costs of puppy ownership so far.

Direct costs
The first round of Abby’s shots / vaccinations at the local humane society were $39.  Her nails were clipped for $15.  We ordered a nice dog tag from Amazon for $3.50 (with free shipping).

Last week, Abby was spayed at the humane society for $85.  She has been wearing an E-collar (aka cone of shame) that we purchased for $10.  This is necessary to protect against Abby licking her surgery wounds, and slowing down the healing process.  We paid Abby’s vet $26 for implanting a tracking microchip.  This includes registry of Abby with all of her home information, in the event that she gets lost and loses her tag.  We purchased pain medication for $40 for Abby to take after her spay and microchip surgery procedures. 

After Abby’s surgery, she was very weak and tired, and would not eat much food.  We needed to get our pup to eat her pain medication and antibiotics right away, so we went to the local Petco down the street.  While big chain pet stores usually charge more for pet products, they offer great return / exchange policies in the event that a certain food or product doesn’t work.  We found a product called Pill Pockets, which worked great for getting Abby to eat her medications.  We paid $9.99 for a 30 count package of Pill Pockets.  It was well worth it to see her happily gobble up her medications like a treat.  Afterwards, I found out that you could order Pill Pockets from Amazon for only $5.99 with free shipping.  Next time. 

Thursday, June 5, 2014

30,000 Starpoints bonus from the Starwood Preferred Guest credit card (expired)

For a limited time, you can earn up to 30,000 bonus Starpoints from the American Express Starwood Preferred Guest credit card.  The SPG card is one of my favorite credit cards and is undoubtedly one of the best travel credit cards available.  This deal only comes around one time every year and if you don’t have an SPG card in your wallet, now is the time to consider it! 

New bonus details
  • Earn 10,000 Starpoints after your first purchase on the Card.
  • Earn 20,000 Starpoints after you use your new Card to make $5,000 in purchases within the first 6 months.

Normally, this card has a 25,000 Starpoints bonus (10,000 Starpoints after first purchase and 15,000 Starpoints after making $5,000 in purchases within the first 6 months).  While the normal SPG bonus is already pretty good, 5,000 extra Starpoints makes this promotion even sweeter.  This is the highest sign-up bonus that comes with the SPG card.  There is a $0 introductory annual fee for the card, then $65.

Note: if you have had this card in the past, you may not be eligible for another welcome bonus offer.

This offer expires on June 30th, 2014.

American Express refer a friend bonus
If you already have an SPG card, you can refer it to your friends and earn a 5,000 Starpoint bonus when they apply and are approved.  You can refer up to 11 friends and if they are approved, you can earn an extra 55,000 Starpoints.  If you and your significant other both want an SPG card, one of you should first apply and then refer the other.  Starpoints can be transferred between spouses who live at the same address for free.

Go here to refer the Personal SPG card
Go here to refer the Business SPG card

Starpoints are valuable
Starpoints are extremely valuable and flexible.  They can be used for both hotel stays and flights. Starpoints can be valued at a minimum of around 1.5 cents and up to 4 cents per point.  30,000 Starpoints can have a cash value of between $450 to $1,200!  If you are staying at an SPG property and paying with your SPG card, you can earn up to 5 Starpoints for each dollar of eligible purchases charged directly with the hotel.  You earn 2 Starpoints as a Card Member and 2 or 3 Starpoints as an SPG member.

Monday, June 2, 2014

Major milestone reached: over 100K invested

Our investments include money in our Roth IRAs, 401Ks, and taxable accounts.  This does NOT include money in our checking and savings accounts.  This does NOT include the value of our home equity, as I don't consider our home an investment.
I'm excited to share a peak into our financial process. I just logged into and noticed that our total investments have surpassed $100,000 in value!  While reaching $100,000 in investments isn’t a lot of money by today’s standards, it is a significant and meaningful amount of money for us.  It is certainly not enough money for us to proclaim that we are financially free, but we are definitely headed in the right direction.   

When it comes to investing, we were both a bit late getting started.  My wife started her working career in 2006, and I started working in 2008.  Like most working Americans, we had no future game plan towards financial freedom.  Like most people who haven’t started investing, we both thought that we needed to “earn more money” and “read everything there is about investing” before we ever got started.

The only financial advice we had ever previously received from our parents was to “stop wasting money” and “don’t forget to save money.”  Anyone else out there have parents that say this?

When my career plans became stable, I took a large loan from my family and used it towards the down payment on a home (with 30 year mortgage attached).  We started making good money, but most of it went towards paying the bills, the mortgage, eating out, and buying a lot of shiny crap.  Next thing you know, we were both literally living paycheck to paycheck.

We were basically living for the moment, with no clue on what else to do with our money.  We were living the “American Dream” of owning a home, driving nice cars, eating at pricey restaurants, and buying fancy electronic gadgets.  And yet we didn’t even have $1,000 in our savings account. 

“Is this all there is to life?” I asked myself. 

May side hustles 2014

The great thing about doing side hustles to generate extra income is that you can hustle on your own terms.  The more hard work, time, and creative effort you put in, the more extra money you can make.  You can hustle as little or as much as you want, whenever you want.  It’s your extra money, and you can choose how you want to spend it.

Here’s our monthly summary of side income that we’ve generated in the month of May.  May has been a pretty busy for us.  My wife started her new job earlier this month, and she had an intense training program to go through.  We had several family events and a wedding to attend.  And we recently adopted a new puppy, Abby, which we have dedicated a lot of time to.

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