MichaeL

Finally, I am now here to state that I am on my final leg of Undergraduate school… From a mediocre high school student to an “accomplished” goal driven individual who listed all of his goals that are realistic but most importantly, that were attainable.

Tomorrow is my first day of school and quite actually, I am quite excited for this new/ last school year…. ROTC training meetings, OPORD briefs, nursing clinicals, nursing school in general…. (if you haven’t gotten that, I was being sarcastic)….

I have just realized that I am now a Senior in college and apparently I haven’t felt the stressful nature of me reaching a significant milestone in my life. Truth and honesty, I haven’t felt a single pang of stress or regret until I bought an N-CLEX Study Guide, and my whole relaxing Summer just tumbled and crashed…….

This is my last year in undergraduate school and at the end of this long filled journey of my college career, it seems that I haven’t really accomplished a lot. Don’t get me wrong, I have accomplished many things I thought I would never reach, but there is something missing…. Let me get back to that on another day….

But back to the N-CLEX Exam; this exam is the most IMPORTANT exam I will ever take in my life. This will decide whether or not I will become an RN and serve with the finest and well trained and equipped nurses in the world; of course I am talking about the US Army Nurse Corps. So beginning now, I will try to practice and gain a good feeling with the study guide and hope that my nursing peers will do the same…. So until Summer 2011, it is N-CLEX Crunch time….

Let’s begin with the term FICO. Many of us heard what this term entails, but does anyone understand the importance and significance of these 3 numbers!!!

FICO SCORE: A 3 digit number that determines the interest rate you will pay for  home mortgages, car loans, loans, and many others to name a few. FICO stands for Fair Isaac Corporation, a firm that created this infamous formula that oversees and controls your financial life!!! It doesn’t have to be this way! But first, let’s get the fundamentals down:

At a business stand point, your FICO score is a great indicator that allows businesses to see how well you can stand at handling a new loan or credit card. So having a HIGH FICO score = a GREAT reputation meaning THE BEST DEALS :) (Interest Rate, wise). Having a LOW FICO score = a poor reputation, or a HIGH risk individual :(  meaning HIGH Interest Rates on cards and loans, which ultimately means you are throwing away money….

The FICO Formula:

With all of your spending habits bill-paying habits and your debt load, your FICO score is thus formulated. So how does this FICO thing know your score, or even more importantly your spending and bill paying habits? Surprisingly, they do know, just know the song “Every Breath You Take”, every move you make, someone is watching you, with the goal of determining your financial profile that is. So to the FICO Formula, you are probably wondering what the hell comprises within this formula, a derivative from a calculus textbook?? Of course not, actually its quite straightforward….. (Of course the formula used is something beyond my comprehension), but lets keep it simple….

Your:

1: Record of paying bills ON TIME!! ========= 35%

2: Total balance on your CC and other loans compared to your total credit limit called your DEBT - TO- CREDIT RATIO ======= 30%

3: Length of credit history ================15%

4: New accounts and recent applications for credit === 10%

5: A mixture of CC and loans==============10%

Your Financial Life Reduced to 3 Digits:

So Fair Isaac uses a formula to come up with a score to range in between 300-850. Anything ranging from 300- 500 means you are a financial toxic risk and it would be difficult to get any kind of business that will work with you. But scores between  500- 850 are differentiated into 6 ranges, each differing between lenders. But note, that each range has a differing interest rate that will cost you in the long run…. Let’s now look at the following ranges:

The FICO RANGES

720-850 (Simply the Best, Better than All the Rest)

700-719

675-699

620-674

560-619

500-559 (Worst)

Compared between the following chart, with a 30- year FIXED rate IR possibly for a home, one can see the incurred costs of a high interest rate….

(The following chart is an example, please be advised that IR are constantly changing per particular lender)

So our goal is to get a score into the 720-850 range. So what is the importance of this FICO score, or FICO ranges you may ask? Well, let’s say it’s not a good thing, but not a bad thing as well….. The INFAMOUS INTEREST RATE……

Knowing your range and your score ultimately determines the Interest Rate that you will pay on loans. So what is an Interest Rate?  Interest is a fee that is paid on borrowed assets, particular loans or money; so thus the Interest Rate is a specified percentage at which interest is paid by a borrower for the use of money that they borrow from a lender. Plain and simple, whenever people borrow money, there will be an interest that will be incurred until all debt has been say, paid off….

So knowing your FICO score, and having a FICO score within the BEST range of 720-850, you will have the best deal of having a LOW interest rate to pay…

So, let’s put it in HARD CASH….. Let’s say you are getting a 4 year $20,000 car loan, and your FICO score as of right is in the range of 500-589. Not bad, but not good either…. According to the interest rate in 2004, the IR is at 15.8% where per month this equates to $103; not bad right… but let’s further keep adding by multiplying $103 x 12 months = $1236 x 4 years = $4944…. Well, that’s $4944 in IR plus the $20,000 car loan…. Well, you know what’s hurting, your heart or your wallet…..

 

So we got a basic underpinning in regards to the BIG 3 numbers of our adult lives…. The FICO SCORE…. So I hope this basic little lesson of what these 3 numbers do and its effect upon are lives hopefully gives a glimpse of our financial . Trust me, there are tons and tons of resources available for others to read and gain and basic understanding of these terms, but as of right now, this is just one small step to becoming financially savvy….

Resources:

Suze Orman The Money Book for the YF&B

Disclaimer: The following information is solely based upon my current understanding of the following subject, hence FICO, and I am not responsible going out buying damn loans and credit cards…. so please, do the research before signing upon the dotted line….

For the past few days, I have been worried about my financial future. So what got me worried about my finances you may ask? Well, yesterday I was driving around French Valley, Great Oak (Wolf’s Creek), and the Temecula area and I was just driving looking at houses, Yes houses! I know I got a boring lifestyle and who the hell in their right mind at the age of 22 drives and looks at houses!!! Well, I do… I have a tendency to go and just drive randomly and to just look and envision myself as one of those people with the job, the house, and the family. What can I say, I am a FUTURIST, but in order to become one, one must first become a REALIST.

I have had long talks with my dad and I watch financial shows on MSNBC, CNN, The Suze Orman Show, and you name it; I have been watching them, but to much ado, I don’t know jack squat about anything!!! So I went to the Temecula Library and borrowed a few books and I have to admit Suze Orman is one sexy woman;  Intellectually that is.  So I made my first step in the process, admitting that I need to do more research and start planning for my future and for my future family.

So from now on, I will post something that I have learned and hope others will try the same as I have, to be financially savvy….

Some people still don’t understand why military personnel do what they do for a living. This exchange between Senators John Glenn and Howard Metzenbaum is worth reading. Not only is it a pretty impressive impromptu speech, but its also a good example of one man’s explanation of why men and women in the uniformed services do what they do for a living. An example of what those who have never served think of the Military.

Sen. Metzenbaum to Sen. Glenn: ”How can you run for Senate when you have never held a real job?”

Sen. Glenn: “I served 23 years in the United States Marine Corps.

I served through two wars. I flew 149 missions.

My plane was hit by antiaircraft fire on 12 different occasions.

I was in the space program. It wasn’t my checkbook; it was my life on the line.

It was not a nine to five job where I took time off to take the daily cash receipts to the bank.

I ask you to go with me….as I went the other day to a Veterans hospital and look at those men with their mangled bodies in the eye and tell them they didn’t hold a job.

 You go with me to the space program and go as I have gone to the widows and orphans of Ed White, Gus Grissom and Roger Chaffee and you look those kids in the eye and tell them that their dad didn’t hold a job.

You go with me on Memorial Day, coming up, and you stand in Arlington National Cemetery, where I have more friends than I’d like to remember and you watch those waving flags.

You stand there, and you think about this nation, and you tell me that those people didn’t have a job, I’ll tell you, Howard Metzenbaum, you should be on your knees every day of your life thanking God that there were some men - SOME MEN - who held a job. And they required a dedication to purpose, a love of country and a dedication to duty that was more important than life itself. And their self sacrifice is what made this country possible….. I HAVE HELD A JOB, HOWARD! What about you?”