Our financial goals shouldn't be how high our FICO score rises. It's a warped sense of wealth.
Wealth is determined by net worth: What you own (your stuff plus your savings) LESS what you owe (total of your debt).
Your FICO score determines how much you can BORROW. How much DEBT you can carry. What your interest rate will be on a LOAN. In other words, it's about how low you can make your net worth sink. Focusing on net worth will have you building real wealth, real assets, instead of how much you can borrow.
Our goals should be to get out of debt. Get out away from living on credit. We should pay our bills on time. We should strive to do what's right, and pay for the things we purchase.
We should be building an emergency fund for a rainy day, because it WILL rain someday. Something really bad will happen to every one of us in the next ten years. Having actual MONEY put aside, will keep you from winding up deep in debt, and wondering how we'll make the next payment.
We should drive paid for cars, because the average car payment is over $300 dollars. I'll show you what you can do with a few hundred dollars a month in a minute.
Our goals should include retiring with dignity. Not relying on a Social Security system that's going broke.
We should strive to leave money for our children, so they will have it easier.
Here's an absolute shocker: If you put $200 dollars a month into an index fund from age 28 to 68, that's most people's CELL PHONE bill, you would retire with:
$2,352,954.50.
You'd be a millionaire twice over! Tell me how much your FICO matters if you'd have $2 Million dollars in the bank? If I'm HALF wrong, you're still a millionaire. Tell me how much your "frequent flier miles" are "saving you money." How your Discover points are going to make you rich. Many people pay $200 dollars in interest every month.
FICO matters to get a loan for a mortgage. It matters in some interview situations. But it shouldn't rule our lives. We should be mindful of our FICO score, but not slaves to it, because it's a negative influence on net worth.
Message Edited by reeltime on 11-27-2007 10:03 PM