Help Needed with FIRST CREDIT CARD

[Benn Griffin]

We'll still have oil for another 50+ years. People have exaggerated, but there still is a need for alternative energy. But there is plenty of oil, especially if people would get rid of the 3 mpg Hummer guzzlers.

[James Winzenz]

My parents signed up for somenew bank where they are effectively their own bank and all their assets are liquified. Their Mortgage payments were 1600 dollars a month last year. THis past month my mom said they paid 240 bucks . house will be completely paid off within 2.5 yrs now . Theyre goign to help me buy a house with their bank thing that they have all their money in that way it will pay for itself and then I just pay them every month the steadily decreasing principle . great idea. it came from another country, either england or aussie land i think

This sounds like the "bank on yourself principle" I have heard something about, although it may be slightly different.  With what I heard about, you invest in a special type of life insurance that is dividend-paying and allows you to overpay the premium.  The amount of dividends you earn is based on the amount you pay in, and if set up correctly, the amount of dividend you earn does not depend upon whether you "borrow" against the funds in the policy or not.  There is a website where I found out about it:  http://www.findoutmorenow.com.  We are seriously considering starting to do this as soon as possible.  Does this sound similar to what your parents are doing, Benn?

[Sasha Pachev]

My wife and I went to BYU. It is a private college, but it does have very reasonable tuition. Somewhere around $2 K per semester. We did it without debts.

[Michelle Lowry]

We bought a brand new Subaru Forester right out of college. I feel dumb about it now, because that what you're NOT supposed to do! I imagine it will be the only new car we ever buy.

I love the Millionaire Next Door.  Paul, if I remember correctly, half of those interviewed bought 2-3 year old cars, but the other half bought NEW.  So, while I doubt I'll ever buy new, there's nothing wrong with it if you have the cash.  Subaru's are great cars too, so a smart choice.

[Paul Petersen]

Oh, definitely nothing wrong with buying a new car when you're a millionaire! Then you can afford to take the hit of the devaluation. It's just interesting that many of them don't bother. Also interesting that many of them live in middle-class neighborhoods, don't pay a lot for a wristwatch, a suit, etc.

[Benn Griffin]

All I know is that it's like taking all your assets and having them in a bubble they said, and then using it to pay for everything. They read some books about it, and the guy that started the program has like 8 or 10 houses he's bought in just a couple years without ever actually paying for them.. Your "bank" i.e. "bubble" pays it all for yuo!

[adam]

Also interesting that many of them live in middle-class neighborhoods, don't pay a lot for a wristwatch, a suit, etc.

I think a lot of that comes from having spent years saving and try to find cheap deals. Once you've got the money, you've already trained yourself to live without it!

Your "bank" i.e. "bubble" pays it all for yuo!

Sounds interesting...but what happens when the "bubble" bursts?

[Paul Petersen]

If it sounds too good to be true, it usually is. Finance is best when kept very simple. Live on less than you make, and pay down the house with what's left. It's hard to get messed over with this "program".

[Benn Griffin]

It doesn't burst that's the thing ! And if you ever need money you just write yourself a check from your bank! It's genius

[Benn Griffin]

What this program talks about is the misconception people hve about mortgages. They say the worst thing you can do is pay down the "principle" on your house. What it does is it works to pay off your principle and interest for you while you sleep! My parents ahve seen their mortgage payments drop 75% in only a year!

[Paul Petersen]

My wife and I went to BYU. It is a private college, but it does have very reasonable tuition. Somewhere around $2 K per semester. We did it without debts.

Alas, BYU is a bit of novelty when it comes to private school costs. $2K is truly exceptional, esp. for quality of education. Most private schools are over $20K for year these days. The cheaper ones anyway. I don't know what Amherst, Emory, or Brandeis goes for these days.

But I don't think it's worth it. Personally, I had a good "college experience" at my private school, and I benefited from getting a Christian education, but it hasn't helped me in the job marketplace. I've found that who you know (networking) and your actual work experience is the most valuable. A diploma is mostly just a piece of paper, especially 10 years out.

[Sasha Pachev]

Benn:

There is no free lunch. Somebody has to pay for it. If you are not paying it, then somebody else is. It could be your parents, your children, or the taxpayers around the country. More often than not it is you yourself out of your own wallet and double or triple the amount some time in the future.

I would second Paul's advice. Spend less than you earn, pay off your debts, after that, save, save, save. Maybe once you are secure against dire straits allocate a small portion of savings to experimental investments - who knows, maybe you can start up another Google. But do not do that until your house is paid off and you have some emergency untouchable cash saved up.

[Benn Griffin]

Well I am doing well with my credit card thus far I pay off the entire balance every month the day the statement is emailed to me :-D! Yay! As for saving to buy other stuff, right now I have a jar to put money in that I'm going to put in the Wedding Savings Account. Aside from that I don't have freed up money to do any of my own investing. But I have faith in my parents' "self banking" plan. It is working wonders for them so all I have to do is be willing to give it a try I figure. SO long as the job market is okay and I get a decent job. The bookstore is fine for paying for car needs and food right now, but no way I could afford rent on that junk pay.

[Benn Griffin]

so ive made all my payments on the first day my e-statement comes.. i wish they attached your credit score at the bottom to find out if it is actually helping your credit number or if I'm just playing into their game!

[Sasha Pachev]

If you are paying no interest, and getting cash-back, it is the credit card company that is playing your game.