Author: br_admin

Holy cow. I just read an article that reminded me to be terrified …
If you have a 780 credit score, and you make one late payment, your score could plummet as much as 110 points.
That’s right—your score could drop from 780 to 670 in just a month. That could cause your interest rates to shoot through the roof.
Worse, it could cause you to pay a ton in interest payments.
So this week, I want to focus on the nitty-gritty…
I know that administrative housecleaning isn’t fun for anyone, but you cannot afford to put it off.
Take an hour this weekend to get your bill-paying mechanisms in order. Sign up for auto pay, make sure you know when your credit cards are due, and just make sure that you have a system that protects your credit score.
It might sound simple, but forgetting to pay one bill could be devastating.
Of course, even if you have the best systems in place, money might be tight one month. If you do need to pay a bill late, here are a few things to keep in mind:

1. Your utility payments are not included in your credit score unless your account is sent to collections. If you have to make a choice between paying a credit card late or a phone bill late, pay the credit card on time and pay the phone bill late. This will keep your credit score intact.
2. Most credit card companies do not report a bill as “late” unless it is past due by more than one billing cycle, which is usually about 30 days. So if your credit card is due August 5, it probably will not be reported as late if you pay it before September 4. Of course, you’ll still have to pay a late fee, but at least your credit score won’t be hurt!
3. And finally, if you cannot pay a bill on time, don’t hide from the creditor. Just call them up and say, “I’m having a tough month. Could you give me a 60-day grace period to make some adjustments to my finances?” They might say no, but if you have been a great customer, they will probably say yes!

That’s it for this week’s blog. It’s short and sweet, but you have some homework …
Buckle down and spend an hour on the “nitty-gritty” by making sure you have a system in place so you pay your bills on time each month.
And if you have an innovate system for keeping your finances organized, I’d love to hear it. Leave a comment below.
Philip Tirone
P.S. I’m serious. I really want you to share your ideas below. I’m committed to building a financially savvy community, and we need your help in spreading ideas!
Here’s what I do to keep my finances organized:

1. First, I make use of technology to pay all my bills. This means that I have “auto pays” set up for every bill, which includes utilities, credit cards, rent, car payments, and the like.
2. Then, I have automatic reminders to review my statements on the 1^st and the 15^th of every month.
3. I put all my “bills to pay” mail into a folder, and I review them every other week. I know this might seem simple, but before I implemented this easy step, I had envelopes scattered everywhere—my car, the kitchen table, and my desk. It made it tough to stay on top of the administrative stuff.

Wow! I got tons of responses from last week’s email and blog about how Lily and I created Tirone Family Meetings!
I want to spend a few more weeks responding to some of the comments, and sharing with you some other ideas I have about creating a family with great financial sense.
Here’s one of the comments from Mary:
“… I go out of my way to have impeccable manners with my son – everything from holding a car door open for him (now he opens mine) to phrases like, “May I please have the juice,” followed by “thank you.” While I’ve had friends ask why I “do that” they are also the first to tell me what a joy my son is to have in their homes; that he helps, includes younger siblings in play and is ‘very polite.’”

Okay, so here’s the thing she wrote that really hit me: “Modeling at home is critical to molding a good citizen.”
Right on, Mary! I couldn’t agree more. When it comes to being a good model for your children, this applies to everything, including your financial habits!
So if you have children, now is the time to replace your bad financial habits with great financial habits so that you set a good model.
Here are a few resources for teaching your children to be frugal about money, and also adopt a healthy paradigm about money.

• Secrets of the Millionaire Mind by T. Harv Eker. What I like about this book is that it explains the financial blueprint that parents leave to their children.

Even saying something like, “No, you can’t have a new bike because we can’t afford it” can give your children a negative financial blueprint. It teaches a children that life is something that happens, not something that they create.

True, you might be unable to afford a bike, but imagine how motivated your child will be if you say things like …

“Yes! Let’s figure out how much bikes cost, and then let’s come up with a plan so that you can earn some money and buy a new bike. Here, I’ll help you. In fact, if you want me to put aside $5 each week out of your allowance, that can go into the pot too.”

This teaches children that money is a vehicle for achieving goals. It encourages your children to have goals, and it encourages them to be proactive about finding solutions.

And perhaps most of all, it teaches them to go out and earn money, to save money, and to decide when and how to allocate money to a resource.

• Read at least one book from David Bach’s Finish Rich series. This includes Smart Couples Finish Rich, The Finish Rich Workbook, and Smart Women Finish Rich.

• And be proactive about looking for any other financial management books or classes that seem interesting to you. The key is to break whatever bad cycle now so that you can transfer better values to the next generation by setting a great example.

In fact, in next week’s email, I’ll give you a great resource (for free) for teaching children about money, and for setting a good example.

Have you found other great resources for teaching kids about money, or for replacing your own bad habits with great financial management habits? Let us know by leaving a comment here!
Also, if you have questions about breaking bad financial habits, be sure to post them below.
Philip Tirone

I talk a good game about being a family man, but a few months back, my wife (Lily Tirone) and I were put to the test …
I was attending a conference, and a presenter (Warren Rustland) said that if a person’s family culture is weaker than all the other cultures surrounding the family (school, neighborhood, church, etc.), then the kids could learn more from other cultures than from the family’s culture.
It makes a lot of sense… If your family’s culture isn’t strong, your children will be pressured by their peers, coaches, and teachers—and they might end up adopting the wrong values.
A second presenter (Greg Baer) then said that the amount of time parents devote to molding their kids will be in direct proportion to their happiness and success.
A lightening bolt struck.
See, I realized I was spending more time trying to build my company’s culture than I was trying to build the Tirone family culture.
So nine weeks ago, Lily and I implemented daily “family meetings,” which we will continue as long as the kids are in the house.
Lily and I want to create an extraordinary bond with our children, and we want them to have great relationships with their siblings.
So when we considered the structure for our Tirone Family Meetings, Lily and I discussed the answer to this question: What do we want to instill in our family?
1) We start with a prayer.
2) Everyone tells the rest of the family what they are excited about. (My three-year-old son is excited about his water balloons—every day!)
3) Then we review the day and what will happen over the course of the day—Daddy is coming home for lunch; Grandma is taking the kids to the zoo… that sort of thing.
4) Next, we talk about the Tirone Family Value of the Day.
It’s important to note that Lily and I let the kids choose which value they want to discuss. We want our kids to feel important and respected, so we give them choices, and then we follow their lead.
We cover everything—from sharing to being kind to finances.
Our kids are young (the oldest is five), so the lessons are geared to their age.
For instance, we bought the “Savvy Pig,” a piggy bank that has four chambers and four coin slots instead of one. These four chambers represent the four things we want our kids to do with their money—save, tithe, invest, and spend.
As they grow older, we will build on these lessons by discussing credit, investment tools, and vehicles for savings.
Regardless, Lily and I are spending each day building a culture that will allow our kids to thrive.
What do you think? How do you teach your children important values and skills? I’d love to learn what you are doing. Also, share how you are teaching your kids about their finances so that they can learn from their parents’ mistakes and experiences. Share your thoughts here…
P.S. For the first four or five weeks, we struggled to stay committed to having daily Tirone Family Meetings. In fact, one day I started to leave the house without having a meeting when my youngest, Luke, came running to the door to stop me.
“Daddy, Daddy!” he said. “Family meeting?”
At that moment, Lily and I realized that these meetings are a game-changer. Be sure to let me know if you have any ideas for making family meetings stronger!
Philip Tirone

I used to be so ashamed.
You see, I’ve had a lot of secrets over the years:
I barely got into college because I was practically illiterate…
When I first started doing mortgages, I was broke…
I had lousy credit for a while…
And these are things I never wanted anyone to know. I felt like if people saw the real me, they would be horrified.
But that isn’t true, is it?
Everyone makes mistakes. Everyone has flaws. In fact, I have learned that there is always someone more successful than I am who has struggled with the exact some problem! I don’t care whether you are an entry-level employee or the CEO of a Fortune 500 company … your problems are probably more similar than you think!
And the truth of the matter is that hiding your mistakes only compounds them. Then you have to worry about people finding out.
It makes you feel a little sick inside.
Over the years, I’ve learned that transparency is a whole lot easier. I’ve also learned that people are happy to reach out and help when I let them know I need it.
I used to bottle things inside. If I had an important decision to make, I did it in a bubble, and often I wasn’t happy with the end result. If I was ashamed, I kept it from everyone, and then I lost sleep because I was terrified that my secrets would be uncovered.
Nowadays, if I have a worry, the first step I take is to disclose my problem to one other person. I try to pick someone who: 1) won’t be unnecessarily judgmental; and 2) will be solution-oriented.
Being transparent is second-nature to me now. I don’t share every intimate detail of my life with every single person I meet, but I also don’t avoid conversations.
By getting rid of secrets, I have found that I am more likely to work toward solutions because I don’t feel alone and isolated. Instead, I feel surrounded by people who want to help. And this applies to every kind of secret—financial, personal, professional.
Do you keep things bottled up? If so, now’s your chance to open up. You can start small until your confidence builds. The important thing is that you get exposure to supportive people who will inspire you to move forward.
If you worked through a problem by getting exposure to other people’s support, tell me about it here!
Philip Tirone

I’ve been wrong about something …
I’ve always considered “The Big Why” to be really important.
The Big Why is basically your vision. What big goal or dream are you working toward that gets you pumped up and excited to start the day?
Proponents of The Big Why say that if you don’t know where you are going, any road will take you there. In other words, if you don’t have a Big Why leading you, you’ll end up somewhere …
But you might not like where you end up.
The Big Why is supposed to dictate how you live your life so you don’t waste your time doing things that don’t move you closer to your Big Why.
In the past, I told people that they absolutely must have a Big Why, no ifs, ands, or buts.
But I was wrong, and I take it back …
I still think the Big Why is a great tool, but I no longer think it is appropriate for everyone at every part of his or her life.
You see, I have a lot of exciting professional opportunities on the horizon. Some of them weren’t things I’ve ever considered, but now that they have presented themselves, I’m excited about them.
But I’m not entirely sure where I’ll end up.
In his famous commencement address to Stanford, Steve Jobs said: “You can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something — your gut, destiny, life, karma, whatever.”
And that’s where I’m at today. I can’t connect the dots regarding what will happen in the future. Instead, I make sure that each day feels purposeful, and that I’ve working with integrity and passion.
I’m trusting in God that someday, I’ll look back and connect the dots, happy with where I am and how I got there.
But today, I’m just thinking about what I’ll do today …
What do you think? Is it more inspiring to live day-to-day, or do you prefer to be led by The Big Why? Leave a comment below and let me know!
Like I said, I still think having a Big Why is a great tool for people who have a crystal-clear vision. If you have one, share it with my other readers so they can start thinking about their own Big Why.
Philip Tirone

It doesn’t discriminate between people who make a ton of money…
And people who make just a little money.
One way or another, it will bite you.
I’m talking about bad credit…
See, I just read two articles (which I reference at the end of this email) that explain the big difference between bad credit and good credit in today’s economy.
Here are some of the shocking statistics:

• On credit cards, a consumer with a great credit score (720+) will pay about 12.9% in interest; a person with a 659 credit score will pay about 20.3% in interest.

This means that on a $5,000 balance, borrowers with poor credit who pay $150 a month will pay an extra $1,186 in interest. That’s almost double the interest paid by those with great credit.
And it means the borrower with poor credit will be making those $150 payments for eight extra months!

• The difference between a 740 credit score and a 679 credit score on a $10,000 five-year car loan is about $2,760 over five years—or an extra $552 a year.

• And on a 30-year mortgage, borrowers who take advantage of today’s low interest rates still end up paying an extra $3,312 each year in interest if their scores are low (on a $300,000 loan).

So let’s do the math and see how this adds up…
Let’s imagine two people:
1) Person #1 has great credit, a 30-year mortgage on a $300,000 house, $5,000 in credit card debt, and a new car loan of $10,000.
2) Person #2 has all of the above, but poor credit.
Over five years, Person #2 will pay an extra $20,506 in interest!
It bears noting that these days, borrowers with less-than-stellar credit might not even qualify for loans. The Wall Street Journal article notes that 90 percent of all loans originated in 2011 were given to people with high credit scores!
In one of the articles, the author writes: “Lenders say the premium for poor credit is necessary to manage their exposure to risk.”
What do you think? Is this “credit divide” fair? Leave a comment below, and let me know what you think!
If you want to read the articles in their entirety, here are the links:
Fed Wrestles with How Best to Bridge U.S. Credit Divide
by Jon Hilsenrath
The High Cost of Low Credit Score
by AnneMarie Andriotis
– Philip Tirone

I’ve entered a bodybuilding contest.
If you know what I look like, you know that I’m not the bodybuilder type—not at all.
For those of you who don’t know what I look like, here’s a picture …

Now, in the interest of full disclosure, I should tell you that the category I entered is “Men’s Overall Fitness.” So I won’t be wearing a Speedo or showing off my massive biceps (which I don’t have and never will).
Anyway, the reason I’m telling you this is because I’ve been hitting the gym twice a day and being careful about the food I put into my body.
I won’t be wearing a Speedo, but I will be standing in front of a panel of judges wearing swim trunks. And since I like to win, I’m obsessive about doing everything I can to win …
But then on Monday night, the family went to dinner, and when Lily took the kids into the restroom, I snuck some dessert!
It was the first time I’d slipped since entering the contest.
And I know from the past that once I slip, it’s all downhill from there—at first it’s just once, and then it’s once a week, and next thing you know, I’m eating ice cream for breakfast.
Does this sound familiar? You’ll be doing just fine with your diet, and then you go on vacation, attend a birthday party, or have some other occasion where you give yourself permission to eat something, and all of a sudden, you are sitting on the couch munching on Doritos every afternoon.
But the truth is that any goal worth achieving is hard work. Fixing credit, addressing financial problems, losing weight, gaining a new skill – these are all things that require a ton of commitment and hours and hours of work.
We are bound to slip up, make a few errors along the way.
Letting one error get the best of us …
Well, that’s just nonsense.
What if we just got back on the horse? What if we took the mistake, learned a lesson from it, put that lesson in our back pocket, and just kept on truckin’?
Wouldn’t that be a lot better than eating a bag of Doritos?
So this week, let’s all recommit to an important goal, whether it’s financial, personal, physical, professional …
I’m recommitting to fitness. And if I’m feeling really brave, I’ll post the picture of me in the fitness contest!
What are you going to recommit to? Leave a comment below and let me know!
– Philip Tirone

Ugh.
I make it a point to read every comment that readers leave on my blog, and while most of them are positive, every now and then people disagree with something I’ve done or said.
And frankly, it can be hard to read. Like everyone else, I want to be helpful, so when I read negative comments, I occasionally feel…
Well, the word that comes to mind is “Ugh.”
Anyhow, I was hung up on something negative that one of my readers wrote. He wanted to know what I, a credit guy, was doing sending out inspirational emails. The general tone of his comment was: Who do you think you are?

It struck a nerve. I was in a funk.
Then I read this comment:
“My favorite part of your letter was when you called your words your wand. So true such words to live by. The understanding that we have the power to produce what we want & need by staying in the positive and maintaining an attitude of finding the solution.”
Then this:
“Your blog actually made me cry…happy tears…the kind I cry when I read about someone who does the right thing, even if it involves struggle, knowing that good will come of every action.”
So my “ugh” turned into a “yay!”
And I was reminded of something my friend Dean Graziosi always focuses on. Dean is a real estate guru, and he talks to his real estate students quite a bit about keeping their distance from naysayers.
He mixes lessons about “lease options,” “flipping houses,” and “wholesaling” with pep talks.
Weird, right?
Well… not really.
Dean knows that his students will accomplish a lot more if they surround themselves with people who are optimistic, who believe in them, and who give them a pep talk here and there.
So that’s why I, a credit guy, send out inspirational emails… ‘cuz I want you to be inspired to take action! You will get your credit in shape a lot faster, reach your financial goals, and TAKE ACTION a lot faster if the people you come into contact with believe you can do it.
What do you think? Let me know below.
Like I said, I read every single comment people leave on my blog, so let me know if something is on your mind!
– Philip Tirone
PS. Happy Father’s Day to all the dads out there, including my own! If you read my weekly blogs, you know that I’m “all in” when it comes to fathering… so stay tuned for a blog post about my own dad, and the big lessons he taught me that I want to pass along…

“When I was a boy of fourteen, my father was so ignorant I could hardly stand to have the old man around…
“But when I got to be twenty-one, I was astonished at how much he had learned in seven years!”
I’m not sure who said it, but I love that joke. And isn’t it true? It isn’t until adulthood that we realize how special and wise our dads are…
Now that I’m a dad myself, I’m “all in.”
There is nothing I love more than having Ava crawl up next to me to cuddle…

Or Dominic…

Or my youngest Luke…

So yep… I’m shamelessly promoting something called a “Great Dad Coin.” You can read about it and order it here. I have one, and can tell you that as a Father, I LOVE IT! (Be sure to order it today if you want it to arrive in time for Father’s Day next weekend!)
My favorite thing about the coin is the symbolism. It has the numbers 2-4-7-3-6-5 and the words “magna pater” written on it.
If you feel a shred of what I feel about my dad and you want to find something special and give your dad a heartfelt gift on Father’s Day, keep reading…
Now,I know it’s tough to come up with presents for dads, but that’s not the real reason I’m promoting the coin…
See, I agree with Margaret Mead, who said, “The supreme test of any civilization is whether or not it can teach men to be good fathers.”
As a civilization, we’ve got a long way to go. About 40 percent of kids grow up without fathers under the same roof.
That’s the real reason I’m “shamelessly” promoting the coin… because I want to support a nonprofit that helps dads become better fathers.
And I’ll be completely honest… I’m not really ashamed. I have three children and a fourth on the way, and this is the type of gift I would like to get from my kids.
In fact, nothing would make me more proud than to know that my kids think I’m a great dad!
(And yes, I’m ordering one for my dad!)
Be sure to order a coin this weekend – right now – to get it in time for Father’s Day.

I recently turned “the big 4-0,” and at my dinner party, we all took turns answering a question…
Over the next 40 years, what is the thing you are most excited about?
One of my buddies has the coolest idea, and I wanted to share it with you…
He’s going to do a “reverse retirement,” meaning he’ll retire in his 40s and start traveling with his wife and kids.
Here’s the “reverse” part of his plan: He will then go back to work in his 50s.
Isn’t that cool? In his 40s, when his kids are young, he will give them the greatest gift of all: his time.
And once his kids are nearing graduation and preparing to leave the nest, he will go back to work.
Of course, most of us do not have the financial resources to stop working in our 40s, but it did reinforce the idea that I should spend as much of my time as possible in “transformational mode.”
What are some of the functional things I can stop doing (or at least postpone) in lieu of doing transformational things?
A big one for me is this: I could substantially cut down use of my cell phone and instead use this time to hang out with my kids and wife. Checking my email and voice mail isn’t necessary all of the time, but spending time with my wife and three young kids is incredibly important!
What about you? Is there anything functional that you should STOP doing (or at least postpone) in lieu of doing something transformational—financial or otherwise?
Leave a comment below!
– Philip Tirone