Getting Out Into the Real World

[Young Spark]

This is a subject I feel needs to be talked about for some reason before I post it up into my blog. The topic: personal life vs. business life.

The main focus is that... I will be honest and I will get negative comments I am sure, but I am getting a $20,000 personal loan, paid back (1 over a 4 year term, the other over a 5 year term.) NOW... I could take this money and spend it to start a business risking the possibility of a failed business (a POSSIBILITY) and not having nothing to show for it, or I can focus on my personal life first.

For example... this $20,000 will go towards me paying some people off that I owe, my $300 credit card bill and an outrageous (and I emphasize... DO NOT CHOOSE T-MOBILE) $450 bill they assume I owe them that I don't have time to argue over with them. After getting my car and everything is subtracted out, I'm left with $9,500-$10,000 to invest in stuff for my apartment that I'd like to move into.

Now, amongst the other $10k-$11k I spent is $700-$900 worth of training materials in the cash flow note business. With this much, it'll teach me enough to actually broker enough notes to help me in the assistance of paying it back. Like I told 3 members on here, the mortgage note business is very lucrative if you perform it right... which I am bound to learn every aspect.

My question is: Do you think I am going down the wrong path of doing such a thing? Thanks again and your opinions will be taken into consideration for a post on my teen business blog.

[chanson]

Well.. borrowing money of any kind is a bad idea right, but its not feasible to go through life and not borrow money(unless your born into a very wealthy family). So i think its more a matter of what you do with the money. Spending it on things for your apartment is a bad decision, buying a car is a bad decision, paying bills is probably a good decision

At the same time, you need to have a car and you need to have things like.. a bed lol.. so be mindful of how much you spend on theat sort of stuff, buy the beater car, buy the ugly cough. Maybe consider a line of credit instead of personal loan.

Line of credit will allow you to use less of the money, you may not need the whole 20k and if you dont end up using it all well that saves you money in interest.

I have a 5000 line of crdit just sitting their, for emergencies but i try to avoid using it at all costs. If i cant just pay for something outright then i probably dont need it!

Hope thats helpful.

[Young Spark]

Yes, I highly agree with you Chris. But if its one thing I need is of course a car. I believe a car is a necessity in life therefore it isn't a bad idea. Of course, I agree to buy a car outright... but without a car, you have no way around, if you can't get around to conduct business deals or anything (especially in small towns like I am in with no public metro system, just a public bus system.)

Again, I agree with getting a credit line, but most of the credit lines I ran into allow purchasing from certain places online, etc. These are more of "department cards" if anything.

But yes, thanks Chris and I will definitely note down what you said and include some of your tips in the post on my blog when I get ready to make it (if I can get your okay to.)

[zoobie]

I think there's nothing bad in borrowing money as long as you are 100% sure that you can give it back to the lendee.

The problem with what you've and I don't agree with it is that you used your loaned money to pay your personal debts.

I think it's quite risky to take that money and use it for your personal use.

[Thrifty]

Man, I just had to get in on this one - even if the thread's a bit old -

It sounds like you have no idea of your finances. I could be wrong, but it sounds like you want a 'newish' car and breand new furniture. Shiny new toys, eh? Wrong!

If you're in debt now, you're just going into more debt by making the same mistakes that got you in debt in the first place - having 'pie-in-the-sky' ideas about money. I'm not criticizing - I was the same when I was young, and I got into financial hot water as a result - because, like you, I had no concept of money. Now I'm older and wiser.

If you realy need a car, spend no more than 2 or 3 grand. If you need it for business, make sure it's presentable (not a rust bucket) and make sure it's clean before you visit clients. If you feel the need to impress clients with a new vehicle, lease it and write it off on tax. Just don't get stuck with a bad lease deal.

Make sure you've got the business set-up first so you can make legitimate tax deductions, which also means, understand what business it is before you start it. Do your research on 'Notes' b4 you waste big bucks on it. many are scams.

Buy second hand furniture from a thrift shop with CASH. A bed is a bed and a sofa is a sofa. If you want the shiny stuff (new) EARN the money to pay for it. Too many people in our society are conned into paying top dollar on credit to keep up with the Jones's, and find they can't keep up with the payments.

LEARN the value of depreciation! What's that new sofa going to be worth in 2 years? Far less than you paid for it! IE: Money down the toilet! Same with new cars - especialy cars, which is the biggest waste of cash most people throw away. It's even dumber when they pay interest on top of that wasted money.

Live within your means. Make a budget and stick to it. If you can't afford something - you probably don't need it anyway. If you think you need it, get a second hand one - and save that money!

I once inherited $20k. I paid $13k worth of debt off and blew the rest. That was a powerful lesson, and I'd never do it again. What I should have done was renegotiate the debts, and paid them off in installments, thus PRESERVING my capital. Having 20k put me in a powerful position to accept any conditions that would satisfy my (very patient) creditors, and having the cash, I would have been able to honour all the payments to keep them off my back, while I still preserved that captitol. afterall, one doen't come by 20k every day! And it's equaly hard to make that up! Instead, I "gave" that 13k away. Get my drift?

Only borrow money for 1 of 2 reasons:
1. Consolidating existing debt into one LOWER interest rate.
2. Investing in something with a very high probability of producing higher gains than the rate you're paying.

Money gives you the power to do great things - if it's used wisely.
Used unwisely, and it's a rotten curse....

which is probably what you're feeling now - cursed with debt.

Wanna make the same mistake twice?

[Xanifur]

I agree 100% with Thrify on this. What you are looking at right now is bad debit. It would be foolish to spend it on new toys just because you are bored with what you have. Pay off the highest interest loans and/or debit first. Invest in your education... but be sure to do your research beforehand. Make sure you will learn enough to pay it back in a very timely manner. Get that phone bill on a payment plan, you are probably around %19-25 interest rate on your credit card, right? Pay that first. Don't tinker with money just because you have it, make your money work for you.

[Thrifty]

I just wanted to add:

There's no such thing as "investing" in furniture for your new pad - unless it's antiques, and even then you have to know your antiques so you don't get ripped off.

I've got a big old desk - abt 100 years old. Not neccessarily rare, but I know I can get at least what I paid for it - $100. Same with a chest of drawers (100+ years @ $100). In contrast, I bought a mint Ikea wardrobe recently worth $200 new for $60 second hand. The Ikea, like all modern furniture, depreciated in value, and the guy I bought it off lost $140.

I've got $30k in solid investments, $20k in credit (with zero balances owing) and my car cost $1,000 which I'm very happy with.

I'm not cheap and stingy. I'll pay big bucks for things of value or for good reason - but I WILL NOT waste money. That's why I've got $30,000 to invest which is growing all the time.

But here's the best advice from Charles Dickens:
Annual income, 20 pounds, annual expenditure, 19 pounds. Result: happiness
Annual income, 20 pounds, annual expenditure, 21 pounds. Result: mysery

I'll quit ranting now
Best of luck

[Thrifty]

Xanifer is right.

(yeh, I know I said I'd shut up, but...)

CALL your creditors BEFORE they call you.
With a workable budget in mind, negotiate a repayment plan AND STICK TO IT (that's why it had to be workable so you can actualy put your money where your mouth is). If you honour your comittments in repaying your debt, you'll go a long way and it'll help to repair your credit (if it's bad). If a creditor if comfortable with X amount on X regular basis - and you STICK to it, they'll be extatic and won't bug you again.

Get a loan by all means, but use my rule above: Only get a loan if it has a lower rate than what you're paying now, and only borrow the amount of the debt. IE: Consolidation at a lower rate PERIOD

You're in the prime of your life. Get a handle on money NOW, and you'll blow me away with what I've got at my age.

[rejoice]

since it is an old thread i don't think my 2 cents would mean anything
I would rather know what your final decision was?

[Young Spark]

since it is an old thread i don't think my 2 cents would mean anything
I would rather know what your final decision was?

That's the problem... Xanifur and Thrifty ASSUMED I went ahead with it, they never once bothered to ask: "did you go through with it?" And for the record, no, I didn't go through with it as I turned down both loan offers.

If you're in debt now, you're just going into more debt by making the same mistakes that got you in debt in the first place - having 'pie-in-the-sky' ideas about money. I'm not criticizing - I was the same when I was young, and I got into financial hot water as a result - because, like you, I had no concept of money. Now I'm older and wiser.

Honestly, I'm in $2,500 debt... not that bad compared to most Americans but let me state something. I haven't made anymore debt moves in the last 6 months and my mindset is starting to switch to a millionaire mindset, meaning I'm pondering on building WEALTH... not debt. You should read my other topic called "Building Wealth Strategies" --- a 10 page productive title mainly consumed by me myself and TheCDAllenGroup... you'll see I no longer think like a "consumer."

Buy second hand furniture from a thrift shop with CASH. A bed is a bed and a sofa is a sofa. If you want the shiny stuff (new) EARN the money to pay for it. Too many people in our society are conned into paying top dollar on credit to keep up with the Jones's, and find they can't keep up with the payments.

The mind of a consumer... but let me ask a question? Would you buy a second down bed or sofa then a brand new? Sure you would, but can you tell what actually may of happened in that bed BEFORE it got to you? Not to sound "off hand" --- but think about all of the things that may of happen in that bed or on the sofa or whatever.

Kind of makes you think: now do I really want to be sleeping in a bed that God know's what has happened, what its been used for?

LEARN the value of depreciation! What's that new sofa going to be worth in 2 years? Far less than you paid for it! IE: Money down the toilet! Same with new cars - especialy cars, which is the biggest waste of cash most people throw away. It's even dumber when they pay interest on top of that wasted money.

Alright... here is a word of advice: EVERYTHING depriciates sooner or later... what you need to do is GIVE IT VALUE. Only two ways something can go: Appreciate or Depreciate. If it depreciates, who cares, as TheCDAllenGroup said... its not about net worth... its about your stream of income. So who cares about if it depreciates, if you have the mindset of a "millionaire" you could buy new stuff.

The point is: Depreciation happens to many things... but if you give it value you'll be doing something. Look at the 1950-1960 cars... are they not valuable? You see them around still and you see many people talk about how they are valuable. What may depreciate now today may be worth money in the future. Some things don't depreciate and always stay that way.

I agree 100% with Thrify on this. What you are looking at right now is bad debit. It would be foolish to spend it on new toys just because you are bored with what you have. Pay off the highest interest loans and/or debit first. Invest in your education... but be sure to do your research beforehand. Make sure you will learn enough to pay it back in a very timely manner. Get that phone bill on a payment plan, you are probably around %19-25 interest rate on your credit card, right? Pay that first. Don't tinker with money just because you have it, make your money work for you.

I didn't get your post: Who said I have to pay money for my education back. The training materials are "self-study" stuff. I don't need much of it anymore either way because I self-trained myself from multiple resourceful sites.

Telephone on a payment plan? All telephones are on a payment plan... you pay monthly for phone service right? Payment Plan

As I said... $2,500 debt isn't that bad... its actually smart since its the lowest out of all my friends... they go out and get a loan for a car and are in debt up to their ears. Mines came from poor money management but all that's changed over the course of the last 4-6 months.

BOTTOM LINE:

This topic no longer pertains to me... my mindset is changing from a consumer to a millionaire mindset and I am becoming much more productive in managing my money. On top of that, I am doing pretty good with the cash flow notes (will can get me a return of up to $20k+ commission for a cash flow note.) So I am doing pretty well... no need to throw advice at me about this topic anymore.

[dfveteran]

Young spark you have a lot of negativity especially when other people give you advice on something you asked about. I have seen your negativity 1000 times before and it usually leaves you with nothing but failure. Get positive. Only positive people in positive mindset get things done. Get your goals straight,see them,do them,succeed.

Bill gates would never ask peoples opinion on whether he should take a loan out or not. Especially if he was in debt already. He would find a way to make his money back to get on top. There is always a way, you just have to decide correctly. Just be happy the bank didnt give you that loan for many different reasons.

Life is a series of puzzling choices, the correct choices are up to you. Play like you are going to die tomorrow. Work like you are going to live 100 years.
All time great Quotes from Ben Franklin

[roadtoharvard]

Young spark you have a lot of negativity especially when other people give you advice on something you asked about. I have seen your negativity 1000 times before and it usually leaves you with nothing but failure. Get positive. Only positive people in positive mindset get things done. Get your goals straight,see them,do them,succeed.

People get things done regardless of their "mindset". Being positive has benefits as does being negative. It really depends on circumstances. Touting "positivity" fallacies just makes you sound like a self help bullshitter.

Bill gates would never ask peoples opinion on whether he should take a loan out or not. Especially if he was in debt already. He would find a way to make his money back to get on top. There is always a way, you just have to decide correctly. Just be happy the bank didnt give you that loan for many different reasons.

Do you know Bill Gates? If you don't than how do you know whether or not he asked people's opinions on matters? It is rampant speculation on your part. He probably did ask for opinions from qualified people as well as educate himself on such matters as it is the logical thing to do. That's my opinion and I have no idea whether it is a valid assumption or not.

[Cognition]

You should read my other topic called "Building Wealth Strategies" --- a 10 page productive title mainly consumed by me myself and TheCDAllenGroup... you'll see I no longer think like a "consumer."

And here is the link [check it out]: Wealth Creation Strategies & Financial Literacy

[Cognition]

"If it depreciates...its not about net worth... its about your stream of income. So who cares about if it depreciates, if you have the mindset of a "millionaire" you could buy new stuff."

As explained here: Net Worth? - Bogus!

[rejoice]

People get things done regardless of their "mindset". Being positive has benefits as does being negative. It really depends on circumstances. Touting "positivity" fallacies just makes you sound like a self help bullshitter.

May I be so ignorant to ask how being negative has it's benefits? What are they?