Credit The Neglected Currency

August 01, 2017

Hey everyone, welcome to day 63. I’m here with Cameron Lewis and Jared Matt. We are going back to the office to work on a deal that Jerry just came across. I was like, You know what? We’re all using the day 63 message. Why don’t we jump on here together and share it with the world? 

 

 

Alright, so day 63 is a currency we’re neglecting, which is credit. As you start to grow your business, you grow in your awareness of how our country and our economy work. We realize there are five currencies to work with. Most of us in K through 12, we’re just talking about two, which are time and money. The three more are relationships, knowledge, and credit. 

Now, when I learned about credit, I was taught that it was evil. It was don’t get it no way you will get in trouble. If you get credit, you will end up in bankruptcy. That is an idiot thing to do. I saw my mom and her friends struggle with credit. I was like, I don’t even want to deal with credit anymore. 

Honestly, guys, I’m 28, and I did not get my first credit card until I was 26 because I misunderstood this currency. We wanted to make this video for you guys to help you understand that you might be missing out on some opportunities. 

Credit is a currency. It is purchasing power. It allows you to move currencies, and jump on opportunities where people make mistakes. Where people make mistakes is they buy doodads. They buy gifts, clothing, furniture, and stuff that is not what credit is supposed to be for. 

Here are the two things credit is used for as you start to develop confidence with this currency. That is opportunities and emergencies. A couple of months ago, I had an emergency that I needed several $1,000, which I didn’t have sitting in cash.

So I used my credit, and it took care of the emergency. If I had not done that, who knows what that would have turned into.

On the flip side of things, there are opportunities in front of you that you could be taking advantage of financial opportunities. Things that will make you way more money if you just knew what to do with the currency. 

I’ll give you an example. Jared and I are starting a business. We needed some startup capital for our business, and I said, Great, Dude, what’s your credit score? We can use your credit. How did you feel when we started talking about credit? 

First, I was a little shy and also nervous about explaining my credit. I didn’t know about it. Honestly, it was fear for a lot of us. He’s like, I don’t even want to talk to you about my credit score. Like most people are private about it. Why are you asking me?

I said this is an opportunity. How long would it take to put all this cash together to start where we started? It would have taken me five years. Instead, it took him 30 days to get access to the capital started up because he used his credit. 

He was able to justify using the credit because he used it to jump on an opportunity capital credit. I know people that are like, what about vacations and the fun stuff. Those things come from the profits that your business generates. You are using your business to create income and profit. 

We’re going to Mexico in a couple of days, and we were wondering how are we paying for it? We’re paying for it with the profits from the business. We had to use credit to start the business. So we have to be good stewards of this currency of this ability to purchase. Okay, emergencies and opportunities. 

Now on the flip side, he has completely revamped his psychology and understanding of credit. He has decided I’m not going to be intimidated by this currency anymore. I’m going to grab hold of this thing and improve my life. What he did is he got a new ride, a brand new whip.  

Anyway, if he had bad credit, you know, he would have probably gotten a 24% interest rate to buy this car, or he would have had to save up again for several years to pay cash. That interest rate could have been 24%. 

Jared just shared with me a guy he knows got 24% on their auto loan. It’s because people don’t steward this credit currency. They end up paying for it and interest. What is your interest rate on this car? It’s about 5.7%. That’s probably the best auto loan that I’ve ever got. I use credit to get it.

 It was because I learned a couple of things to steward my credit in a good way that allowed it to become possible. My wife and I used our credit score and our credit currency to get out of debt completely. This allowed us to get this vehicle which was super exciting for us. 

I’d always learned growing up that credit is bad. They would say that you will create a wall of debt that you’ll never be able to climb to the top of. However, I side skirted that teaching growing up and learn how to use it. It’s something that will always be in my toolbox, something I will always use for the rest of my life. 

When you want to have a better understanding of your credit score and your credit accounts. Imagine when you activate credit and use it instead of making a payment towards a minimum payment. This is how the bank wants you to use it. What if you put your entire paycheck on the line on that credit, whenever you racked it up and put your entire month’s paycheck on there. 

Then you start operating out of that line to sit out of your checking account. You would pay even less interest. When you start to understand how the account is set up, and how the credit is set up, you can take advantage and advance in your economic position. 

It’s not anything to be afraid of. It’s just something to learn about. In the last two years, I’ve been a great steward of my credit. Okay, I told you, I had zero credit cards when I first started because I thought everything should be on a cash basis. 

I talked to a millionaire, and he corrected my mindset. He’s like, this is another currency you’re neglecting. If you want to advance to the next stage, you must understand credit. So in the last two years, I’ve gone from zero in credit to 165,000 in credit. So if I see an opportunity, I’m able to jump on it. I’m able to benefit from it.

Then I pay the line back, and I got the benefit. I want to know where you guys are coming from where you’re watching your videos. Drop that in the comments. It’s always fun to go back and review these. Remember, don’t be intimidated by this currency in this new game we’re playing called take back your existence. 

It’s about not backing down but creating an understanding of it so that you can get a better sense of what’s going on. You got credit, time, relationships, knowledge. Are they all benefiting you? Or are you being intimidated by it?

 

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