The Basics of Oxen

Where there are no oxen, the manger is empty, but from the strength of an ox comes an abundant harvest. Proverbs 14:4

This verse had a profound impact on me as I went through my financial freedom journey. From this verse, I realized that I could either live a life with an empty manger or with an abundant harvest and the choice was up to me. In the pursuit of financial abundance, I could choose to rely on myself and my own abilities, or I could acquire oxen to help me. Which do you think I chose? 

In my book, Oxen, I have outlined the different types of oxen, how to acquire oxen and how to lead oxen. These principles will help you maximize your financial resources and experience an abundant harvest, just as I did, so that you can fund your biggest and wildest dreams. 

Most people earn money by showing up to work and in turn they get paid. If you do not show up to work, you do not get paid. Oxen can allow you to earn money whether you are working or not! There is only so much time in a day and therefore there is only so much work that one person can physically put in. This is why oxen are so important: they allow you to eliminate the time barrier. 

Oxen can do things you cannot do. They have the ability to carry a load that you cannot carry and can endure more than you can endure. Oxen can be trained and can work together and accomplish even more. They work rain or shine, night and day so that you do not have to. They can multiply and take you places you may have only dreamed about. Oxen can provide. 

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Investment Value Calculator Tool

Are you ever tempted to pull money out of your investment accounts? Sometimes it can sound like a good idea to withdraw money from retirement funds or other accounts to pay a debt or even go on a vacation. However, most of the time taking money out of the market is not a good idea! The one thing you will never be able to get back is TIME! If you take money out of an account or wait to start investing, it could be a decision that you really regret in the future when you see the value of your accounts. In most cases, people wish they had started investing sooner. I have never heard anyone say, “I should’ve waited ten more years before I started saving for retirement”. 

It can be encouraging to get an idea of what your investments will be worth five, ten, fifteen, or twenty years down the road. I Was Broke. Now I’m Not. has a tool that can help you illustrate just that! The Investment Value Calculator Tool takes the current amount of the investment, the annual rate of return, the amount of time you plan to invest, and your monthly contribution and calculates the value of the investment. It also shows a range of your investment value from five years all the way to sixty years! While, of course, these returns cannot be guaranteed, the tool can allow you to imagine what these accounts have the potential to grow to. This can keep you from making an unwise decision to withdraw funds and can even tempt you to add more money to your accounts! Check it out today! 

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5 Year Buckets For Investing

What is the most important thing to do when it comes to investing? START! Often when you are looking at making an investment, it can seem like a daunting task so taking that first leap is the most essential. Once you have taken that crucial first step, it does not have to be a confusing road to making smart investment decisions. It can be as simple as looking at your life (and investments) in five year increments. 

The concept of five year buckets is so simple but it is a great way to look at your investments and deciding when to put your money in the market. The principle is this: if you are going to need the money within the next five years, it should not be attached to any investment. This is important because you cannot risk losing the money in the short term because you simply will not have enough time to recover it before you need it. That can put you at the risk of incurring debt when you could have paid for the expense in cash. 

If you are looking into the future and decide you will not need the money within the next five years, you should definitely tie it to some sort of investment vehicle, that suits your risk tolerance, or else you will face the next obstacle of inflation. Make sure your money is working for you to at least outpace inflation. 

Investing is as simple as deciding to start and then figuring out when you will need the money. If you need it in the short term, now is not the best time to put it in the market. But if you can put the money away for longer than five years, investing is the way to go. There is always a risk associated with investing and the short term can be particularly volatile but, if you make wise decisions, starting to invest will be a decision you will not regret.  

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Early Pay-Off Calculator

Do you have debt that you are really trying to get rid of? Are you interested to see how much time and money you could gain by paying off that debt earlier?

This tool allows you to enter the interest rate, outstanding loan balance, the principal & interest monthly payment, and the additional amount that you want to pay towards the loan each month.  Once you have entered this information, the calculator will tell you how many months you will gain back of no payments and how much money you will save in interest payments. It is time to break up with that student loan debt and pay off that home mortgage. Check it out today! 

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Good Vs. Bad Debt

If you have been following my posts for a while, you probably know that I talk a lot about reducing and eliminating debt. So it might come as a shock to you that I do not think all debts are created equal and there is a such thing as good debt! I actually break debt down into four different categories ranging from terrible to good. 

1. Terrible Debt: This debt is the worst type of debt you can have. This debt includes payday loans and pawn shop loans. These loans typically have a VERY high interest rate. When I say very high, I mean that I once saw one that was 640% interest! I think we can agree that is terrible. 

2. Bad Debt: This debt may not be terrible but it is still pretty bad. This includes your credit card debt, unsecured signature loans, car loans, etc. Yes you read that correctly, car debt is not considered good debt. The average new car drops in value $100 per week during the first four years. 

3. Better Debt: I only classify one type of debt as better debt and that is home mortgage debt. Every time you make a payment some of this money is going into home equity so hopefully when you go to sell it, it will have gone up in value and you will have made money. 

4. Best Debt: If you are going to have debt, business debt is the best debt you can have. This is where I would categorize rental properties, buying franchises, buying into a small business, etc. This type of debt will allow you to scale your business and make more money. 

All debts are not created equal and there are some that are way, way worse than others. Make sure you take this into consideration any time you are contemplating going into debt so that you can make the right financial decision. 

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Understanding Credit Scores

Credit scores are a measure of one’s ability to manage debt. The dominant credit scoring system which is used by most lenders was created by Fair Isaac. This system provides a measure of an individual’s credit worthiness and is commonly known as a FICO Score.

A credit score impacts many things. It determines whether or not you can obtain a loan. If you qualify for a loan, the credit score dictates the interest rate charged.

Credit scores also impact insurability. When you obtain auto, renters or homeowners insurance, the credit score directly impacts the insurance cost. The lower your credit score, the higher the insurance premium will cost. I have seen insurance premiums doubled because of poor credit.

Credit scores also impact the ability to obtain a cell phone contract or an apartment lease. It can affect utility connections. Utility providers usually require much larger deposits from people who have low credit scores. If you have an excellent credit score, a deposit might be waived entirely.   Credit scores can even impact your ability to obtain a job. Your credit score will have an impact on your life.

Many people know their exact credit score. If it is great, they wear it as a badge of honor of their financial prowess. “My credit score is 814,” they will say quite proudly.

Others who have a more colorful experience with credit, will wear it as a badge of dishonor. “My credit score is in the toilet,” they say with a glum look.

The fact is that credit scores are only a measure of how well a person can manage debt and contractual financial agreements.

Credit scores are calculated using these data points:

1. Type of credit issued [Revolving debt (credit card) or Installment debt (anything with payments and a pay-off – car loan, boat loan, student loan, etc.]

2. Age of the credit relationship

3. Amount of credit one can obtain (total of all credit limits)

4. Amount of credit one has consumed (percentage of total credit limit)

5. Payment timeliness

6. Requests for credit (“hard pulls” of credit)

7. Outstanding judgments

Look at the list again. Does it include any relationship to how much money one might have in a savings account? Or any connection to a person’s net worth?

Here’s the fact: You could be a millionaire and have a terrible credit score.

How? By having zero credit relationships.

While a great credit score is more desirable than a terrible credit score, it is not the best indicator of financial success. Choose instead to make financial decisions about what best increases financial margin and net worth!

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Actual Cost of Debt Calculator

Do you know what your debt is really costing you? How much of your monthly payments to your debt is actually going to principal and working at attacking your debt?

By entering in the name of the debt, the amount you owe, the monthly payment, and the annual interest rate, the tool will calculate the amount of interest you are paying per month and per year. It also shows the overall percentage of your payments that are being applied to your principal balance and your debt freedom date.  

Take some time to calculate what your debt is costing you in interest payments. If you are carrying a balance on credit cards from month to month, consider using a 0% balance transfer HERE. This can allow you to start applying 100% of your payments to debt and accelerate your debt freedom date. 

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