Category: CREDIT BLOG

It’s that time of year where I have to issue my big warning:
Steer clear of retail store credit cards!
From now until Christmas, you will likely spend a few days in shopping malls. And more than a few of the retail stores you visit are going to try to seduce you into applying for a retail store credit card.
“You’ll save 10 percent on today’s purchase by applying for a retail store credit card,” they will tell you.
You’ll hear it over and over. In fact, just about every major store has a promotion intended to lure people into signing up for a retail store credit card.
Beware!
Retail store credit cards will hurt your credit score.
And they will hurt your wallet.
Let’s say that you go into Banana Republic to buy your mother-in-law a sweater. The cashier tells you that if you sign up for a Banana Republic Card, you will get a 15 percent discount on that day’s purchases.
Let’s do the math and see how this adds up …
Imagine that the sweater costs $55. This means you will save $8.25 if you sign up for a Banana Republic Card.
But consider all the different ways you might end up spending MORE money:

1. You will have to pay interest on the sweater, assuming you do not pay the bill immediately. And you will also have to pay interest on all future purchases.
2. And there will be future purchases. If you have a credit card, you will be more likely to engage in retail therapy, and you will be more likely to spend more money at the store. (In fact, this is why the stores want you to sign up for their credit cards. They know people who use credit cards end up spending more money than people who use debit cards or cash.)
3. You might even spend more money that day. I should take advantage of this offer, you might think, piling a few more items in your shopping cart and thinking that you are “saving” money because of the 15 percent discount.
4. You have added a credit inquiry to your credit report. Credit inquiries count for 10 percent of your credit score, so your score drops a few points. This will cost you money in the future as a lower credit score means you will have a higher interest rate on other credit cards, your home loan, or your car loan.

My point is this: The $8.25 “savings” ends up costing you a bundle.
Think of it this way: Why would retail stores promote these cards with discounts unless they know they can eventually make money off the retail store credit cards?
As always, be sure to leave a comment below, particularly if you successfully fight off a pushy sales clerk trying to get you to sign up for a retail store credit card!

I wanted to let you know that we are about to put together some great new content for our weekly blogs. And since we want to make sure that we are over-delivering on our promise to you, we are wondering if you can help us prioritize.
We want to know what your favorite blog posts are. Would you mind taking a short survey to let us know?
Here is the link.
Thanks for your time.
Philip Tirone
P.S. The survey is only four questions long, and it won’t take more than a couple of minutes … Once again, here is the link to the survey.

Have I told you how much I LOVE getting letters and emails from people who have been through my program?
I received some feedback a couple of weeks ago from a student who has called into my one-on-one Q&A session. She’d unexpectedly had her credit card limits reduced, which affected her debt-to-limit ratio, which in turn caused her how to save money on car repairs score to drop.
Credit card companies do this regularly—they promise you a big limit, and then a few years later, they lower your limit out of the blue. This hurts your credit score, which is in part based on the debt you carry as a percentage of a limit.
For instance, let’s say you have a $10,000 limit and a $1,500 balance. Your balance would be 15 percent of your limit, which would be looked upon favorably by the credit-scoring bureaus.
But if the credit card companies went and dropped your limit to $2,000, your balance of $1,500 would be 75 percent of your limit, which would be looked upon negatively by the credit-scoring bureaus.
It’s a scam!
Well, this happened to one of my clients, and I told her how to fight back. Then I got this letter (which I’m editing slightly so that you have the complete context):
“I had one card with a limit that had been lowered, and I decided to try for the second time to get it raised because they refused my request the first time. I called, and after spending 1.5 hours on the phone with five or so people (who by the way, got a little more patronizing with each one), they still would not do it.
“But … during the conversation, one of them mentioned something about calling the “Portfolio Risk Department.” After just five minutes on the phone with ONE person in the Portfolio Risk Department, they restored my full credit limit! Done!
“I never would have known to even try this if not for your fabulous program and awesome encouragement! Thank you so much once again!”
At times like this, I love my job more than usual. I’ve said it before: Your credit score is your financial reputation, and I’m tickled pink to help people fight back when their reputations are being tarnished!
With that in mind, let me know if you have any questions about rebuilding your score. From time-to-time, I answer them in my weekly email/blog. Leave a comment below, and I’ll try to answer it in the coming months.

Please listen to this call I recorded with the Freedom Ratio creator, Dave Fenton.

Give me your feedback below!

I consider myself a pretty financially savvy guy, but my CPA just introduced me to something that opened my eyes…
Dave observed that I will not truly be free until I no longer have to work to cover my overhead. If my passive income doesn’t cover my monthly expenses, I’m controlled by my need to make money.
I’ve heard this concept before, but he really opened my eyes in a different way.
What if I invested my money in such a way that it creates cash flow sufficient to cover my monthly expenses? Then my time will truly be my time. I could do whatever I wanted to do…
I could choose to work.
I could choose to kick back in Hawaii wearing a Speedo and eating bananas on the beach.
I could choose to become an avid stamp collector.
I could choose to make teeny, tiny little birds out of paper.
I could do whatever I wanted to do because I wouldn’t have to worry about monthly overhead.
Some of us have investments, but Dave made an important observation…
If your investments aren’t creating cash flow, then they don’t give you freedom over your day-to-day life. Instead, they exist as some far-off abstraction and may or may not fluctuate upward or downward when you finally need them.
The Freedom Ratio basically tells you what percent of overhead your passive income covers. So if your passive income is $150 a month and your expenses are $6,000 a month, your Freedom Ratio is 2.5 percent. In other words, your passive income covers 2.5 percent of your monthly expenses.
Once I looked at it this way, I started asking myself: What are the investments I can make that help my Freedom Ratio.
What am I spending money on that really doesn’t serve me?
See, if I can bring my monthly overhead down and in turn invest that saved money so that it produces cash flow, my Freedom Ratio will go up… which would make my life a lot easier.
Lily and I have created a plan to build our Freedom Ratio. Here is what it entails:
First, we went through our credit card bills and realized that we were spending money on things that made no long-term differences in our lives. So as a test, we have vowed to be “cash only” on day-to-day expenses. I’m really curious to see how much we are going to save.
We use the “envelope” system for our day-to-day expenses. Instead of putting anything on credit cards, we put cash into envelopes and we spend money based on the money we pre-planned for the week.
We started this week with three envelopes:

1. Food
2. Lily and kids
3. Philip

Just this morning, Lily came to me and said, “I picked up your dry cleaning. You owe me $37 out of your envelope.”
I said,“$37 for dry cleaning! That’s a rip off.”
She said, “Philip, you had 17 shirts.”
I said, “Next time, I want to take it to a place that charges .99 cents per shirt.”
She said, “Great, you find that place and let me know.” 🙂
My point is this… we have NEVER had a conversation about the cost of dry cleaning, so I didn’t know it cost me that much money every time I wore a “dry clean” shirt instead of a washable shirt.
Now that I think about my money in terms of the Freedom Ratio, I’m going to work (and spend) smarter. It just makes sense.
At the end of the week, we will:
Take any leftover money and put it in our investment savings account, and then review the receipts and make a plan to spend even less money next week (if possible).
Like I said, this is Week One. I’ll let you know how it goes in future weeks.
What do you think?
What questions do you have?
Do you and your family want to do this with Lily and me?
If so, let’s do it!
Post any questions or comments you have, and by next week, I’ll record a conference call with the most asked questions and ideas.
I will teach you what I’ve learned… and at the same time, teach me what you have learned.
Let’s rock this idea and become free! Isn’t that what life is about?
Philip Tirone
P.S. David Fenton, my CPA and the creator of the Freedom Ratio, is a rock star. I’ll have him do a blog post in the future.

This blog post is about something near and dear to my heart…
Sales.
No, that’s not a joke. See, sales has a dirty reputation—our culture says it is a bad thing.
But the truth is that a salesperson should give the buyer something he or she really needs—and that’s a good thing.
Plus, what most people don’t realize is that even if they aren’t in a sales position, they are still in sales.
If you ever apply for a loan, you will need to sell yourself to the loan officer. If you ever apply for a job, you will need to sell your talents to the employer.
If you ever want to woo a significant other, you have to highlight your positive qualities.
So I’m a big fan of improving the sales process.
This is why I interviewed my friend Eric Lofholm, a master sales trainer (in fact, he once trained Tony Robbins’ people).
If your job is sales-related (real-estate, insurance, pharmaceutical, service-providers, etc.), you must listen to this recording and learn how you can tweak three systems to massively improve your results.
The recording is at the end of this blog post.
And remember … even if you aren’t in the sales business, you are in sales, so I encourage everyone to listen to this recording below!
Philip Tirone
P.S. Ever wanted to be a better communicator? Master sellers learn excellent communication skills, so be sure you listen to this recording if you want to improve your relationship with your spouse, friends, or family members.

To learn more about Eric’s Selling System, click here for more information.
To purchase Eric’s system at a special discounted price for all of my followers, click here to purchase.

My wife, Lily Tirone, and I just welcomed Baby #4 into the world (read about it here: “Thank You, Mrs. Lily Tirone”).
Little Emma is about six weeks old.
Suffice it to say, we aren’t getting a ton of sleep in my household.
The other morning, I was mulling over the fact that sleep-deprivation is used as a torture device when Lily reminded me of something …
I’m not really going to remember this.
So much life has happened between now and when my other kids were born, that those first few months are a fog. I look at my older kids, and I just remember the good stuff.
This reminder helps me make it through the tough times. Some much life is going to happen between now and six months from now. I can do it. I can wake up for all those midnight feedings.
… and 2:30 a.m. feedings.
… and 5:00 a.m. feedings.
In fact, not only can I do it, but it won’t even be important in six months. I’ll barely remember what it was like. So I can do it.
And so can you. If you are in a financial mess, it might seem unbearable—at times even torturous.
But if you do what you are supposed to do—take the tough steps now—you will work your way out of the mess. And so much living will happen that eventually … it won’t seem to bad.
You know what you have to do: Start rebuilding your credit. Cut wayyyy back on your expenses—downsize if you have to. And if it’s really, really bad, maybe you even need to declare bankruptcy and give yourself a fresh start.
Whatever it is, take that step now. You can do it!
That Lily Tirone is a smart cookie, isn’t she? If you want to comment on her wisdom, leave a message below.
Philip Tirone

A few weeks ago, I wrote a blog about the importance of family meetings in building a strong family unit.
One of my readers posted a blog about how her family used the family meetings to resolve problems.
It’s a wonderful idea, and I wanted to pass it along because I think a family can use this to resolve internal conflicts (like a fight between siblings), as well as external problems (like a bill that needs to be paid).
A lot of siblings never develop close bonds with each other, so even as adults, they aren’t very close. Some even carry their rivalry into adulthood.
It seems to me that if a family member presents a problem, and then the rest of the family works together to come up with a solution that works for everyone, each member of the family will feel honored, respected, and a valuable member of the family.
And then, the family will work together to execute a solution as a team, making the family grow closer together.
My kids are still young, so I am ironing out the kinks, but here are some of my thoughts on how families can solve problems together and build an atmosphere where family members work together:

• When a family member presents a problem, make sure that each person in the family has a chance to add to the context.

Explain that the family meeting isn’t a time for fighting, but rather to state the problem as everyone sees it.

• Then, explain that because you are a family, it is important that you find a solution together. Explain that the family is not going to focus on the problem; instead, it is going to come up with a way to make the problem go away.

Tell your kids that you all love each other and want to get along, and that resolving conflict by looking for solutions together is an important part of this.

• Then let everyone brainstorm for solutions.

Write everything down, and don’t criticize people’s ideas, even if they are absurd. After all, your children need to know that you respect their opinions.

• Then, ask the family members to discuss the solutions that seem the most fair.

• Then talk it out, and try to come up with a solution that works for everyone.

Like I said, I think this works for internal conflicts as well as external problems. If Suzy is mad at her brother because he didn’t help with the chores, this can be resolved during family meetings.
And if Suzy really want to go to soccer camp but she doesn’t have the money, this is a great time to problem-solve and teach your children about goals, savings, and “opportunity costs.”
Suzy might say, “I want to go to soccer camp, but I need $500 and I don’t have it.”
Then the family can throw out solutions.
“You can start saving your allowance. That will get you a little bit of money.”
“You could sell your bike.”
“How about a part-time job?”
“Could we look for a cheaper soccer camp? If so, maybe Mom and Dad could pay for your soccer camp as an early birthday present.”
I love this idea because it reinforces the idea that a family is a unit—a team that supports each other, cheers each other on, and looks for solutions together. (Thanks to my reader, Andy, for the idea!)
What do you think? Let me know if you have any other ideas, particularly if they have to do with solving financial problems.
Philip Tirone

I’m generally a healthy guy, but I gotta confess…
I love ice cream.
I can clean out a pint in less than 25 minutes.
And… I’m a busy guy, so I let fitness slip through the cracks here and again.
Then ten months ago, I made a commitment to get into the best shape of my life. I’ve been taking pictures in regular intervals documenting my transformation.
If you look at the pictures*, there isn’t much difference from one picture to the next. But if you hold up Month One against Month Ten, it’s like you are looking at two different people.
Here’s another related thought…
My oldest daughter, Ava, is five. And I swear that from day-to-day, she looks exactly the same as she did the day before. But even though the growth from day-to-day is undetectable, she’s been growing like a weed.
In fact, when I look at Ava next to my newest baby (Emma will be two weeks old tomorrow), Ava looks more like an adult than a baby!
My Coach Tim Wood has said to me, “People always over estimate what they can accomplish in a year, and GROSSLY underestimate what they can accomplish in five years.”
Here’s my point: Transforming your credit score or your finances is possible—it’s even easy once your behaviors become second nature.
But don’t measure your progress daily—you’ll only get frustrated. Give it some time, and then look back in a month or six months. Just keep piling on small changes, and see what happens!
–Philip Tirone
* I was going to post the pictures, but one of my staff members said, “No thanks, Phil. We don’t need to see you with your shirt off.”
So I’m not going to post the before and after pictures, but please leave a comment on my blog if you have any thoughts!

On September 3, at 10:17 a.m., Lily Tirone made me a dad… for the fourth time.
The birth of all of my children has been unique and beautiful.
Ava was our first. From her, two parents were born.
Dominic was the fastest. Lily labored a long time with Ava, so she expected the same with Dom. We stopped by Mass on the way to the hospital, but when Lily went into active labor in a church pew, we decided it might be time for a trip to the hospital.
And Lucas surprised us and came six weeks early. He was tiny, but healthy and perfect in every way. For the past three years, he’s been our baby. Now he has the privilege of being a big brother.
Little Emma Therese Tirone was born in our home.
We planned it that way. Lily awoke from a contraction in our bed around 7:00, and 3 ½ hours later, she was a mom for the fourth time, and she was taking a nap in our bed.
It all felt so … familiar. The familiar feeling of family.
At my 40th birthday party, Lily gave a toast. She told everyone how amazing it was to bear witness to another person’s life. She was talking about me, and how she had the privilege of watching me succeed, fail, pray, laugh, grow, and struggle.
But the privilege is mine.
Being a spouse is hard work—and Lily and I both sometimes joke that the celibate, lonely lifestyle of our priest is probably a lot easier than ours. We have to keep a solid, vigilant commitment to keeping our relationship on track.
I know for certain that I’m the one who is harder to get along with.
So today, there’s no post about credit or your finances. Instead, I want to thank my bride for letting me bear witness to her life, and all the miracles that have unfolded over the years.
Thank you, Mrs. Lily Tirone, for giving me our growing family.
Phil