Category: CREDIT BLOG

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

I can’t stop thinking about something my powerhouse friend Dave McLurg said…
(Dave has a brilliant business mind and is exceptional when it comes to strategizing so as to best leverage a business, offer, or a service.)
He said that people move in and out of three states-of-mind: survival, functional, and transformational.
He also said that while a person can move up the ladder, he or she can’t skip steps. So you can move from survival to functional, but you cannot move from survival to transformational.
If your state of mind is focused on surviving, you are thinking about basic needs, like putting food on the table. If you are in functional mode, you are thinking about getting the laundry done so you have something clean to wear to work.
These two phases aren’t very exciting, are they? In fact, “survivor-land” is downright depressing…
But the third area is… well, it’s transformational.
If you are in the third phase, you are considering where you want to go and how you can transform your life into something bigger and better.
This is where I want to spend most of my life.
Of course, we all live in “survivor-land” here and there, but if you are always focused on “just surviving,” you won’t be capable of focusing on transforming your life.
So if you want to limit the amount of time you spend in “survivor-land” and spend more time thinking about how to transform your life, you must find a way to quickly move up the ladder.
In other words, you must develop a method for getting out of “survivor-land” and into functional mode.
When I find myself focusing on the scarcity and “just trying to get by,” I ask myself a question…
What do I have to do next?
This way, I start taking action on things that need to get done. By taking action, I allow myself to stop being paralyzed by the fear of “getting by.”  For me, jumping into “action-mode” puts me in a state of mind that allows me to then shift gears and focus on my future.
For instance, if I’m going through the actions of getting my kids dressed (a functional activity), I can try to turn this function into a transformational moment. I can ask my kids: “What are you going to do today to make the day a great day?”
And then I can tell my kids what I’m going to do to make sure my own day is great.
How about you? How do you shift your focus from scarcity and surviving into transformation and thriving? Share your ideas below.
– Philip Tirone

These three questions are the “catch-all” questions for everything… for parenting your children, for handling your finances, for making professional deals.

Before we get to that, let me back up and tell you how I know Lou Holtz.

One of my mentors is Harvey Mackay, author of five bestsellers, including Swim with the Sharks. As part of our mentoring relationship, Harvey introduces me to his close friends and associates. (I’ve blogged about the fact that success relies, at least in part, on getting physical exposure to people you admire.)
At any rate, Harvey introduced me to Lou Holtz. Aside from being kind enough to take his picture with me, Lou gave me some great advice…

It’s the same advice he gave to his players on the field, to his teammates on projects, and to the coaches he manages.
Anytime you are tackling a problem, ask yourself:

1. Am I doing the right thing?
2. Am I doing the best with the time I have allotted for this?
3. Am I treating others as I would want to be treated?

If you can answer these questions with a resounding yes, you are on the path to success. If you say no to one or more of them, make the proper adjustments, and rework your solution.
Once Lou told me about these questions, I started using them all the time. When I’m disciplining my kids, I ask myself: Am I doing the right thing? Am I doing the best with the time I have? Am I treating my kids the way I would want to be treated?
And when my kids are being unfair to one another, I ask them the three questions…
When dealing with a client, I ask myself those questions. You get the point.
Lou also gave me one other question. Consider it the bonus question.
This person helps a person keep focused when working toward a goal…
The question is: What’s important now?
When Lou was coaching his teams through a season, he kept perspective by asking over and over: What is important now? What is important now?
By doing this, he stayed in the moment and kept his team focused on making the most of that moment.
I pass this advice along because I think it applies to just about everything.
What is important now?
This is a question I can ask myself if my kids are ever in crisis. It’s a question I can ask myself when I’m trying to accomplish something for my business.
In crisis and in success, asking What is important now? stops us from focusing on distractions and reminds us to keep doing our best in the moment…
As always, let me know your thoughts by posting a comment below.
What is important in your life right now? Let me know!

Dear Mom,
When I think back to my childhood, one memory in particular still makes my eyes well up with tears…
While other parents were driving Mercedes and BMW’s, you were driving the school bus. And you did it with a smile on your face!
And work ethic isn’t the only thing you gave me. You are the definition of “Super Mom.” You have taught me that…
1) My word is my wand.
In fact, I can still hear your voice: “Phil, your word is your wand.”
If I was angry and complaining, you taught me that I would attract whatever I was focusing on. If I continued to use words of frustration, I would attract more frustrating things in my life. But if I used words of gratefulness, I would be given other things for which I would be grateful.
And guess what? My word is my wand, and that is why my life is so great right now.
Thank you, Mom.

2) I should always make it fun.

It was late into my elementary school years when I learned that “Energy Balls” were actually pitted prunes and that “Moon Candy” was dried apricots.
I specifically remember a day when I had a friend over, and you said, “Who wants some Energy Balls?”  Lacey and I jumped up and down…
I can only imagine what my friend was thinking, but I still grin when I think about the sick look of disappointment on his face when you brought out the “treat.” After recovering from his shock, he said, “Those aren’t Energy Balls. Those are PRUNES!”
Well, to this day, I still love my Energy Balls… and countless other kind-of-gross things that you made fun.
3) It will come back tenfold.

Perhaps your greatest lesson was this: “Everything you give will come back 10 times, so just keep giving.”
I remember the time you donated enough money to sponsor a pew at church. Money was tight, so I asked, “Why are we giving that much money when we can’t buy what we need for our own household?”
You said, “Whatever we give will come back ten times. Let’s keep giving and believing!” And you were right, Mom. It always came back ten times… and more.