Chain of Wealth - Debt, Investing, Entrepreneurship, Wealth & More

Getting a handle on your student loans is SUPER important. In this episode, we do a deep dive into some of the terms and concepts you should be familiar with.

[1:53] There are TONS of different loans when it comes to student loans - public, private, subsidized, unsubsidized etc

[2:34] What is the difference between subsidized vs unsubsidized loans?

• It depends whether you’re doing a graduate or postgraduate degree
• The government will pay your loan’s interest while you’re in an undergraduate degree
• While you are studying for your postgraduate degree - you are being charged interest on your loans.

[4:29] Chatting about the difference between private and public loans

• Private through a bank or another financial institution - your credit will be pulled, exactly the same as buying a car. There are a lot more restrictions on the loans such as qualifying for public service loan forgiveness (PSLF)
• PSLF actually isn’t that hard to follow as long as you are eligible
• • The reason so few people get it is they don’t understand how to do it
  • Qualified employer - anyone serving the organization is eligible
  • Payments for 10 years (120 qualifying payments)
  • Income based repayment program - must follow the payment plan
  • Only certain types of loan qualify - often good to consolidate your

[11:28] The people at the lender aren’t super helpful, but really people just tell them the wrong thing.

• Doctors could knock off 6 years off their payments
• People need to do their homework!

[13:5] Follow the rules!

[15:29] Most people don’t adequately do their homework, there are tons of companies out there that offer advice on this.

[16:11] Tell us about your debt story, we’d love to hear your debt story to give you free access to our debt destruction course!

Andrew is constantly thinking, talking, or writing about his never-ending pursuit of a better life & career through personal experiments, lessons learned, and smart money habits. In 2017, he took a detour off the path towards financial independence and embarked on a one-year mini-retirement. Now he is using the insights gained from a year off to reframe his goals and ambitions for decades to come.

Welcome Back!

[2:19] So Andrew took a mini retirement, when he was last on the show he was in the middle of it, now we have a chance to catch up with him and see how it went. First off, how did you plan for your mini retirement? Was there a dollar figure you needed to save up?

• Spoke last right at the beginning of his mini retirement, it wasn’t planned but it evolved over time, the plan was to travel the world, their number figure was $40,000 each.
• There was a lot of stuff that happened in their personal lives that changed their plans- Andrew’s wife got diagnosed with Thyroid cancer.
• Andrew was also completely burned out at work and got a lot of time to think about things

[7:51] Looking back, did your mini retirement go according to plan? With your spending goals?

• Andrew was obsessive about his money and definitely had a number in mind and wanted to make sure he kept strong tabs on spending money.
• Ended up spending the less of any year since they started tracking their expenses
• Ended up trying to beat his goals and only spent about $30,000 in the whole year

[8:1] Are there some things you weren’t expecting from your mini retirement? Like finding stuff to keep you busy etc?

• Andrew did a lot better job of his time keeping himself busy
• Coming up with a long list of things to do was important and gave him clarity
• Taking things one small piece at a time is really important, read Bird by Bird.

[18:8] You took a break off your FI route, would you say your mini retirement set you back? And if you could go back, would you do it again?

• Yes Andrew would do it again, even with some of the more difficult parts of it.
• It didn’t make that much of a dent in their FI journey

Sponsor:

[19:42] Debt Plan That Works

• Sign up for our upcoming course on getting out of debt.

Value Link Round

[20:3] What is your savings or retirement plan?

• Stayed the same after mini retirement, lifestyle expenses have been in check
• Baseline spending and save the rest

[22:48] Do you have a favorite book?

• Millennial Money
• Retire Early Not the Penny Pinching Way

[24:49] Favorite quote you like to live by?

• “Bird by bird” - focusing on one thing at a time

[25:34] Any other parting piece of guidance?

• Focus on more than just the money, having a magic money is great but there’s more to life than that

[1:40] We've all had the moment when you see something you like, you want it and next thing you know your credit card is in your hand.

• Katie hasn't done any massive impulse purchases but it's super easy to just get something in your hand and be ready to pay for it.
• Impulse purchases are actually a very common thing, it can be expensive items.
• One of the biggest items is your personality - are you materialistic
• It literally becomes a habit and people start to expect you to have the latest stuff
• Be careful about the company you keep

[4:55] This is exceptionally relevant for people trying to get out of debt.

• Forming a habit, it starts compounding and adds up so quickly.
• 3 or 4 days later you've forgotten about your purchase and you end up spending more 

[6:21] So what are some of the best things you can do to control your impulse purchases?

• Be mindful of the company you keep - find someone that is trying to accomplish something with money
• It's easy to feel lonely when you're trying to pay off debt
• To combat impulse purchasing, create a waiting list - set a number of days, e.g. 30. You can't buy the item if you have to wait.
• Seeing the fine line between the value of something given the benefit
• Avoid using your credit cards
• Always remember what your goals are
• Start avoiding stores :)

Deanna Broaddus is a 46-year-old single woman on the path towards financial independence. She, however, has not always been money savvy, but with a change of mindset, she became serious about striving for financial peace in 2014. By the end of 2017, Deanna has paid off just under $47,000 in debt, and in early 2018, she began her journey as an investor.

She blogs over at msfiology.com inspiring other women to take control of their lives.

Welcome!

[2:43] In addition to getting your finances under control, you had a battle with drug addiction in late 2009, which was really the turning point for you, was there any one thing that caused you to want to get your life back under control?

• One word to describe is transformed, really hit a heavy bottom
• Ended up asking for help surrendering and really doing some self reflection and realizing she had a lot of denial and resentments
• Always a high functioning addict but stuff needed to be dealt with
• Healed relationships, thought patterns.

[6:21] You really have been through a big journey, what would you say is one of the biggest success factors that has seen you through everything in your journey? Maybe a particular person, or goals you set?

• Multiple mentors in Deanna’s life
• Accountability, she felt like she was living a double life
• Faith has played a massive part of her transformation
• Getting the right people in her life has helped her get better

[7:41] What does financial independence mean to you and do you think that anyone can achieve it?

• Having enough money that produces passive income so you don’t need to work in the future.
• Having a diverse portfolio is very important.
• Yes, if you are still breathing there is a chance. It could mean different things for different people.
• 4% rule of thumb is a study that if you can save up 25x your annual expenses you can live off 4% of those investments for the remainder of your days. There are a lot of nuances

[11:49] What are some of the most important things you can do to achieve financial independence?

• Driving down expenses
• Housing, automobiles and food

[16:9] Any cool articles you’ve written recently on your blog?

• Get in the center of the room - Deanna learned how to do a headstand without using a wall.
• Find the right balance and knowing not to go too far but being uncomfortable enough that you’re pushing yourself.

Sponsor: Debt Plan That Works

[20:10] Get free access to our upcoming course on debt destruction, check out chainofwealth.com/debtcourse

Value Link Round

[20:45] What is your savings or retirement plan?

• First get out of debt, the start focus on investing and saving
• Having an emergency fund
• Fund for a future car
• Created a lot of sub savings accounts  by budgeting
• Max out retirement accounts

[23:1] Do you have a favorite book?

• Book: Dreamland by Sam Quinones
• Book: Retire Inspire by Chris Hogan

[25:23] Favorite quote you like to live by?

• Forgiveness is the fragrance the violet sheds on the heel that has crushed it.

[25:54] Any other parting piece of guidance?

• Don’t be afraid to ask for help

Coming to terms with your debt is tough, very often you'll need to mentally prepare, The worst thing you can do it wait too long to take the first step.

[1:44] Finding out exactly how much debt you're in is absolutely critical as it's the first step in starting your financial future
●     It's really great being able to help people and teaching them how to conquer their debts
●     We're putting together debt destruction course that we're busy building, feel free to apply for the the scholarship!
●     The fear of the unknown is what gets people

[4:36] Diving into Kate's debt plan to help people understand exactly what we're talking about
●     When Kate moved in, after a few weeks the bills started rolling in
●     Kate always thought nothing good ever came from checking the mail
●     When they finally checked the mail Kate felt ashamed and didn't have the answers
●     When the looked through all the information, after calculating everything in excel, we came up with Katie's number, it was about $200,000 worth of debt.
●     When Kate realized how much debt she had she felt panicked and embarrassed

[9:56] 63% of American's can't afford a $1,000 emergency
●     The reason people don't have money is because they're in debt.
●     People end up paying significantly more money because of the interest cost, which doesn't seem like much.
●     Kate could've paid $67,000 if she paid her $38,000 loan if she paid it off over the maximum term.
●     It sucks when you have to split your paycheck between different bills.
●     Sometimes you have to do what you have to do to overcome debt.

[15:00] It's really beneficial to conquer your debt as soon as possible
●     Apply for our scholarship to win free access to the debt scholarship.

Chella Diaz is a life coach and the owner of Transcend Abundance, she believes there is a very strong link between money and spirituality. Having written many books about the topic, Chella mentors women and teaches them how to live a prosperous life.

Welcome!

[1:55] What are some of the biggest money mistakes you’ve made?

• Having someone invest her money for her without asking the tough questions
• Always do your due diligence

[3:19] How do you believe spiritually and finances mix?

• There are two sets of rules, if you are spiritual then you won’t have abundance, and if you are rich you won’t be spiritual
• It’s about changing the way you view both of them
• Always try to get yourself in a strong position before helping others

[6:17] How much of money management do you believe is linked to your mental well being?

• If you remember the first money conversation you can remember, that is probably related to your current beliefs about money
• As an example if the first conversation you hear is about someone not being able to afford something you will either become a big spender and live paycheck to paycheck or end up spending every single penny
• Try to remember the first conversation you had and learning the lesson of what you should be doing and figure out where you are.

[12:39] What would you tell a younger version of yourself about money management?

• When you are younger you want material things
• Is what you’re going to school for going to give you the money that you need to achieve your dreams
• Find ways to further yourself, maybe volunteer yourself
• Find someone and pick their brain

Sponsor:

[16:29]

• If you’d love a free way to listen to book check out audible to get a free audiobook

Value Link Round

[16:59] What is your savings or retirement plan?

• Strong believer in real estate but also not putting all your eggs in one basket
• Having additional sources of income is super important- Chella is trying to setup something passive

[17:46] Do you have a favorite book?

• Wasn’t always a reader- start listening to books
• Book: The road less traveled
• Book: Think and grow rich

[19:41] Favorite quote you like to live by?

• Treat others the way that you want to be treated and have compassion

[20:15] Any other parting piece of guidance?

• Your money journey begins today
• Know where you are and where you want to get to.

Katie is presented with the opportunity to negotiate her salary as the school year is going to renew(she’s at a private school). We cover general salary negotiations, it’s definitely an interesting topic and can help you take home a ton of more money.

[2:17] People don’t realize how much they can actually negotiate their salaries, Katie was in a position where her salary was set, so here’s some things to consider about salary negotiations-

• Women typically don’t negotiate as much as men
• Katie had to take a pay cut when she originally took the job, so she felt like she didn’t really have the upper hand.

[4:2] How do you know when you’re in a position to try push salary negotiations?

• You need to be comfortable with yourself and know when you’re asking for a reasonable amount. If you have a number you want and won’t settle for it then that’s a good point to try negotiate.
• Lots of jobs have a fixed increase so there isn’t typically the ability to negotiate, one of the best times to negotiate is when you’re trying to get a new job.
• You typically have the upper hand because companies have normally narrowed it down to one or two candidates.
• Always start high and let them counteroffer you.

[7:30] A great example is Facebook Marketplace, always start high,

• If you don’t ask you don’t get.
• Most companies have a range that they’re looking to try place someone so always shoot for the higher end of that range.

[8:52] It’s all good to go in guns blazing, but when you’re actually in front of your future employer, you need to plan out what you’re going to say.

• Have a strong understanding of your self worth.
• You typically know more than what you realize.
• If you explain why you are the best at something you definitely have the upper hand, people don’t realize how critically important something is, perceived value is exceptionally important.
• If you have no idea- fake it till you make it :) If you don’t believe in that, you become what you focus on.

[12:20] Not formally announced, but we’re building a debt destruction course!

• We’re accepting 5 people to give them free access to the debt course.
• Kate paid off almost $200k in less than 2 years.

UPDATE: Katie asked for what she wanted and she got that exact amount. :)

Sara Williams is a debt adviser in London, England. She set up her personal website, Debt Camel, five years ago, wanting to provide good information about debt in a more approachable, easy to read manner than official debt advice websites. She now blogs about everything to do with debt and credit ratings in England, from improving your credit score for a mortgage to asking for a payday loan refund for unaffordable lending. Her aim is to answer common questions with as little jargon as possible.

Welcome!

[2:6] In the US one of the biggest debt problems is student loans, what does the typical millennial struggle with in the UK when it comes to their money?

• Didn’t used to be a problem at all back in the day, however 20 years ago the loans started coming in
• 10 Years ago they really started getting high
• Typically you only need to pay what’s affordable
• Some advisors believe it puts off a lot of people from wanting to go to university

[6:16] What is a debt management plan and how does it work?

• Get a list of all income, expenses and debts
• Calculate disposable income from subtracting your fixed expenses from your income
• You can then start snowballing you debts
• However if you can’t manage your minimum payments, at that point you need a debt solution
• The debt management solutions goes to the creditor asking to pay less (typically freezing the interest)
• It’s flexible so you can adjust amounts

[11:6] We emailed you a while back about negative equity in a car loan and you said it works quite differently in the UK. What are some of the things you can do if you’re given a car loan with unaffordable finance?

• This is an increasing problem in the UK, some cars are bought on higher purchase
• PCP purchases are now becoming more common, there is typically a large balloon payment at the end, they have to return the car at the end
• There are some protection in British law- after you have paid half of the available credit you can often hand back the car

[17:16] A debt hole people fall into are payday loans, do you have any solutions for people that get stuck and have to keep borrowing to repay their old loans?

• Was a huge problem in Britain, if there’s an expensive thing to cover people take out payday loans and people get stuck in a vicious cycle where they keep using the loans to finance the old loans.
• The new regulator has reduced the amount to about 1000 APR
• The regulator has capped the amount of interest people can pay to 100% of your loan value
• A lender has to check whether a loan is affordable for you, this must be repayable for your income without financial burden, you can typically ask for a refund of the interest you have paid
• If you borrowed for 5 months in a row, the lenders have to now cut you off

Sponsor

[24:33] Transformation Nation

• If you are looking for a long term retirement plan look into what a QRP is, head on over to our website to get a free book.

Value Link Round

[25:4] What are some of the steps you’d take if you were starting to setup a sound retirement plan?

• A lot of pension planning in the UK is orientated around your job
• There are defined benefit schemes and defined contribution plans
• Auto-enrollment has now been brought in (5-4 years ago)
• Currently 8% is now being put in, which is great but it depends on your age how effective this will be

[28:31] Do you have a favorite book?

• No book recommendation as most people aren’t buying books
• Check out good websites instead if you’re in debt

[29:40] Favorite quote you like to live by?

• “Nobody ever made a greater mistake than he who did nothing because he could only do a little.” ~Edmund Burke

[30:44] Any other parting piece of guidance?

• The rules do seem to be quite different in different parts of the world so definitely do your research

Building your credit is an absolutely fundamental thing to do.

In this episode, we'll walk you through all the step you should take to move towards a high credit score.

[1:38] What did you do when you started building your credit Katie?

Kate was added onto her brother’s credit card when she went to college

Kate’s mom also opened an account for her and then made the payments

When she had to pay for her teeth she had to open a care account

A credit card application came after college because she had her student loan that was now due

She’s not got the Uber credit card

[5:35] Denis had quite a different story for his credit history

He had a platinum credit card in South Africa, however in the US it does not translate

Denis was told he had no credit history so he had to start from scratch

The easiest way is to open up a secured credit card- essentially you fund the credit card

Pro tip- put more money in then you can use the points

Eventually after 6/7 months Denis started getting stuff in the mail

Denis now had over $60k of available facility on his credit card

[11:42] A good way to keep your first credit card under control is to only put a few expenses on your credit card or only really spending what you absolutely need.

[12:51] What you do eventually get your first credit card, it’s a really exciting time.

Only really use what you absolutely need to.

Check out CreditWise from CapitalOne.

Personal finance expert Jackie Beck is the creator of the app store hit "Pay Off Debt by Jackie Beck", an award-winning smartphone app that's been featured in the Oprah Magazine. The app has helped over 53,000 people use a debt snowball to break free from debt. Jackie and her husband Miles became completely debt free (including their house) in August of 2012, after paying off more than $147,000 in debt. She now helps motivate others to do the same so they can live the life they're dreaming of.

Welcome!

[2:10] So your app is all about debt and I’m sure there’s a big story to that, what is your personal debt pay off story?

• Came off a long period of unemployment debt comprises of-
• Student loans
• Home equity line of credit
• Credit cards
• Car loan
• Started with an extra $35 on her house and payments get bigger and bigger

[5:24] So we love money apps and since you had one we had to have you on the show! Can you tell us a bit more about your app- who is the audience that would benefit the most from it and does it just cover debt or other topics as well?

• Works with debt snowball or debt avalanche
• Calculates by when you’ll pay off your debt

[9:12] Do you have any inspirational struggle stories of any of your users? So what I’m asking is what is the craziest profile you’ve seen and how have they turned their life around?

• There’s actually not that much data provided
• A lot of people have told their stories

[13:28] A ton of our listeners are paying off debt, which super hard and sometimes depressing as you feel like you aren’t making a dent sometimes. Do you have any advice for people that are in the thick of it and what would you say is the biggest benefit to conquering your debt?

• Don’t add up how much debt you have
• Focus on the progress

Sponsor:

[16:25] If you’re interested in your retirement and looking for an option that is tax advantaged check out what a qrp is!

Value Link Round

[16:52] What is your savings or retirement plan?

• More about passive income, rental property stock market investments
• She can already do it but

[17:25] Do you have a favorite book?

• Mostly into fiction, favorite book is your money or your life

[17:44] Favorite quote you like to live by?

• Nothing everyone says or does is because of you

[18:12] Any other parting piece of guidance?

• Focus on your dream