Speaker 1: It's time for the b a q I don't know
Speaker 1: why always forget the cadence. It's time for the b
Speaker 1: a q A, the b a q A. This is
Speaker 1: brand a mission and you will be Did you hear it?
Speaker 2: Question questions? Try answer?
Speaker 3: I always forget to be the b a q A
Speaker 3: to b a q A from the b a q A. Okay,
Speaker 3: the b a q A. That's what I forgot. It's
Speaker 3: like the b a q a A the b a
Speaker 3: u a.
Speaker 2: Okay.
Speaker 3: Welcome back and welcome black.
Speaker 1: It is Brad Ambition. Question and answer, and we love
Speaker 1: your qs. And although we don't have all the a's,
Speaker 1: we try our best.
Speaker 2: We do. We give you the best aids lowercase a's.
Speaker 2: Is I ice to say, take it with a handful
Speaker 2: of assault. I don't think there's been a question in
Speaker 2: recent memory that has led me to cackle as hard
Speaker 2: as today. One of today's questions just did.
Speaker 1: So.
Speaker 2: I am excited to dive on into this this mailbox
Speaker 2: that we've got here once again. Though before we do,
Speaker 2: y'all can hit us up with your questions. We get
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Speaker 2: at Brown Ambition Podcast and don't forget to follow and
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Speaker 1: All right, so question numero you now, hey, ladies, love
Speaker 1: the show, Love you back girl. My husband and I
Speaker 1: have four kids. The question is where does their credit
Speaker 1: score start? So they start with a perfect score or
Speaker 1: at zero brotus question, what advice would you give an
Speaker 1: eighteen year old as they begin building their credit? This
Speaker 1: is a great question. Okay, So know this that legally,
Speaker 1: if your child is under the age of eighteen, they
Speaker 1: can't sign for Like most credit is built upon you've
Speaker 1: made some sort of relationship or promise to a lender
Speaker 1: that you are going to borrow and pay back based
Speaker 1: upon their terms. So if a child is under the
Speaker 1: age of eighteen, they can't legally sign for that. But
Speaker 1: it is possible that you put them, like you know,
Speaker 1: when they're like sixteen, on your like you know, like
Speaker 1: you could be an authorized user, So meaning like you
Speaker 1: put them on your card, that means that they can
Speaker 1: use your card. They're not a joint you know, it's
Speaker 1: not a joint card, so they're not responsible for the debt,
Speaker 1: but they can use your card and therefore start to
Speaker 1: build credit. So people start to do that. But and
Speaker 1: so I just want you to understand this that like, no,
Speaker 1: kids don't start with perfect scores. I want you to
Speaker 1: think about a credit score the way you would think
Speaker 1: about driving, like do kids. Like if you are driving,
Speaker 1: there's a reason why if you're going to get insurance
Speaker 1: for your teenager who's driving, that you get the highest
Speaker 1: rate because by default, because they don't have any driving experience,
Speaker 1: they are considered a bad driver out the gate. They
Speaker 1: don't have to get into an accident. You're terrible driver,
Speaker 1: says you just got here. It's the same thing with credit, right,
Speaker 1: credit really is you have to think about it as
Speaker 1: a GPA is an average of your choices, and you
Speaker 1: haven't made any choices yet if you're still really young,
Speaker 1: so there's nothing they're like, you don't have any history,
Speaker 1: don't you can't prove that you can pay, you know,
Speaker 1: you can't prove that you can borrow responsibly.
Speaker 3: So your kids kind of start off loan and then
Speaker 3: they build themselves up with with good behavior. So just
Speaker 3: keep that in mind. But you can kind of you
Speaker 3: can give them my dad did this for me.
Speaker 1: You can give them that kind of like extra boost
Speaker 1: by adding them as an authorized user to a current
Speaker 1: card that you're paying off in full every month. So
Speaker 1: by the time that they're eighteen years old and they
Speaker 1: can get their own credit card, you know, they have
Speaker 1: a credit score that's decent in comparison to their friends.
Speaker 1: About some advice, Do you have some advice for eighteen
Speaker 1: year old building their credit manager?
Speaker 2: Yeah, yeah, A couple of ideas. One, I think it's
Speaker 2: really important that they have they build their credit full stop.
Speaker 2: I didn't realize how many people graduate without having any
Speaker 2: credit at all, and I was trying to think back
Speaker 2: to you, how did I establish credit in college? One
Speaker 2: was I did get a credit card that, you know,
Speaker 2: I would max out all of the time because it
Speaker 2: was like three hundred dollars limit. So I didn't have
Speaker 2: great credit, but I've had a credit score.
Speaker 1: You know.
Speaker 2: Another way. Another way was well once I graduated. Anyway,
Speaker 2: when your student loan, if they have student loans, when
Speaker 2: you start making payments six months after graduation, that will
Speaker 2: start appearing on your credit And as long as you're
Speaker 2: making payments on time, that can help you build credit
Speaker 2: as well, Tiff, you said, becoming an authorized user on
Speaker 2: a parent's credit card is definitely one way. But the yeah,
Speaker 2: it's only a gift if you the parent are good
Speaker 2: at paying your bill in full. And you know, because
Speaker 2: they don't, it's not it doesn't it's not good.
Speaker 1: They inherit, they take it.
Speaker 2: But I will say not all cards. Apparently not all
Speaker 2: cards report authorized user credit history to the bureaus, so
Speaker 2: it may not. So you have to just check. And
Speaker 2: there's actually a great article. I know because I used
Speaker 2: to create articles with a huge team of writers, and
Speaker 2: we did one on credit cards that report authorized user
Speaker 2: activity to credit bureaus. So before you do that, just
Speaker 2: double check that your issuer, that your bank actually sends
Speaker 2: that information because you don't get you know who. It's
Speaker 2: like when you leave the house without your Apple Watch
Speaker 2: or your fitbit, like did you really walk today? No,
Speaker 2: it doesn't count unless it's counted, right. You didn't really call.
Speaker 1: Them because when I add my added my sister, Lisa,
Speaker 1: the baby, the baby, the big baby, I was like,
Speaker 1: we called and I said, hey, I'd like to add
Speaker 1: Lisa to my Bank of America card. And I said, wait,
Speaker 1: does this report to credit bureaus, And they said, oh,
Speaker 1: it almost was something like we almost had to like
Speaker 1: opt into so it doesn't hurt to just yeah, just
Speaker 1: call and super easy. I had her on the phone
Speaker 1: so she can give them her social because they're going
Speaker 1: to need to do that. Also, back in the day,
Speaker 1: they used to tell you to get a store card
Speaker 1: to get started, because most eighteen year olds won't qualify
Speaker 1: for a traditional unsecured.
Speaker 3: Card, and so you don't have to do that anymore.
Speaker 1: Go ahead and get yourself a secured have your eighteen
Speaker 1: year old get a secured credit card. You can get
Speaker 1: one for as low as for flows as three hundred
Speaker 1: dollars deposit.
Speaker 3: So what happens is they come up with a three
Speaker 3: hundred or you.
Speaker 1: Do, mom, and they put that money in a money
Speaker 1: market slash savings account that's the limit, and it's secured
Speaker 1: with your own money, meaning that as your eighteen year
Speaker 1: old is swiping, if for whatever reason they don't pay,
Speaker 1: because they can swipe up only up to what's in
Speaker 1: the bank, which is three hundred, they will snatch that
Speaker 1: three hundred so fast from that savings account and say,
Speaker 1: don't worry, says, we still got your money. So a
Speaker 1: secured card is like a credit card with training wheels
Speaker 1: because you're not actually borrowing your money from the bank.
Speaker 1: You're kind of borrowing against the money that you put up.
Speaker 1: So that's another way, another great way that anyone with
Speaker 1: bad credit or someone would This is what they call it.
Speaker 1: When you don't have much of a credit score or
Speaker 1: a credit report, they call it.
Speaker 3: A thin file.
Speaker 1: That's the official term, meaning like you don't have much here,
Speaker 1: so as a result of the file being thin, we
Speaker 1: just consider you a risk. That's why your credit score
Speaker 1: is not so great when you're young, because you're a
Speaker 1: thin file and you're at risk something else. And one
Speaker 1: last thing is have your eighteen year old put the
Speaker 1: cheapest bill they have that ten dollars Planet Fitness membership
Speaker 1: on that card, and have them paid off every month
Speaker 1: in full. Paying off a credit card in full every
Speaker 1: single month puts like fairy dust on your credit score
Speaker 1: because credit bureaus love to see that you paid off
Speaker 1: a debt in full. They don't care the amount, they
Speaker 1: care about the habit. And you can automate that habit
Speaker 1: happening every single month. They're gonna see that thin file.
Speaker 1: Get a little thick you know, thick thh I sec
Speaker 1: that little cres card, get a little booty on us, thicker.
Speaker 2: Than a snicker, that credit score, that credit file thicker
Speaker 2: than a snicker. I forgot about that phrase, and I
Speaker 2: try to find it an excuse to use it every day.
Speaker 2: So thank you for that.
Speaker 1: So if you want that thick credit score, like pay
Speaker 1: off your credit you know, pay off your credit card
Speaker 1: bill every month in full, but make sure you paid
Speaker 1: off after the statement date.
Speaker 3: The statement date is when.
Speaker 1: They say, hey, credit Burias, my child used their card,
Speaker 1: because you want them to report it was used and
Speaker 1: then it was paid off, So after the credit date,
Speaker 1: the statement date, but definitely obviously by the due date.
Speaker 2: I will just add I walked over your words, my bad,
Speaker 2: but I got excited because I'm like, have them pay
Speaker 2: it off, because I think the thing that about authorized
Speaker 2: being an authorized user is like they get the benefit,
Speaker 2: but they don't have to do anything. And I think
Speaker 2: the real teaching moment is that more like get a
Speaker 2: secured card, to get your own credit card, because then
Speaker 2: they have even if they mess it up and they
Speaker 2: miss a payment and their credit score goes down, you
Speaker 2: can still they have time to bounce back from that.
Speaker 2: But it's a learning moment. And for me, I'm like
Speaker 2: obsessed with give kids hand on, hands on experience and
Speaker 2: don't just do it for them, because I have seen
Speaker 2: it go the wrong way and then they graduate and
Speaker 2: they're like, how did this happen? And then they just
Speaker 2: screw it up after college when the stakes are higher. Yeah,
Speaker 2: so just adding that's the good. Shall we move on
Speaker 2: to the question that made me cackle? Yes? Can you
Speaker 2: read it? It's like a cackle again?
Speaker 1: Sure me, me, me, me, Okay, I have a question
Speaker 1: regarding a student loan overpayment. I'm going to grad school
Speaker 1: to get my psych shert from a top school in
Speaker 1: the country, and I know I'm going to be able
Speaker 1: to earn an income to make the degree worth it.
Speaker 1: The program is thirty one thousand dollars and I've accepted
Speaker 1: sixty thousand in loans, so double your trouble. I want
Speaker 1: to invest a difference in bitcoin. Say that again, slower,
Speaker 1: I want to invest the difference in bitcoin. Ooh, we're
Speaker 1: gonna add the laugh track right here. I'm like, laugh
Speaker 1: it's a laugh and a wins at the same times.
Speaker 1: But I just love the next few questions.
Speaker 3: Right, is this a bad idea or am I onto
Speaker 3: something here?
Speaker 1: I love you guys, You're like my two best friends
Speaker 1: as I drive to work.
Speaker 3: I love you too, Sister.
Speaker 1: Well, here's the thing. I'll say this and then you
Speaker 1: give your vice Mandy. So that's not the first time
Speaker 1: I've heard of someone doing something like this. I remember
Speaker 1: the first time I've heard of this is I was
Speaker 1: in college and a friend of mine, we'll call him Jose,
Speaker 1: he took out more money than he needed, you know,
Speaker 1: and honestly he used it. He used it to buy
Speaker 1: a rental property, you know, that put a down payment on,
Speaker 1: and then like the money that he got from the
Speaker 1: rental property, he used it to pay back you know,
Speaker 1: the dead And so that's not the first time that
Speaker 1: I've heard of someone taking the over payment and investing it,
Speaker 1: you know, because typically I remember refund checks.
Speaker 3: When I was in school undergrad. What your refund check
Speaker 3: you was like free money, free money, free money, even.
Speaker 2: Though it wasn't, Yeah it wasn't. It was a little interest,
Speaker 2: but you know, it was surprise exactly. Although I'm like,
Speaker 2: who gets who gets twice as much as they need? What?
Speaker 2: What's going on with the math there invest in a bitcoin?
Speaker 2: I mean, listen, how many bitcoin could that even buy? You?
Speaker 2: Like half a bitcoin today? What is a bitcoin worth?
Speaker 1: No?
Speaker 3: For I honestly think bitcoins I think are worked like
Speaker 3: fifty or sixty?
Speaker 2: Me? See what is it? You can't even you can't
Speaker 2: even can you buy a fractional bitcoin? I don't even
Speaker 2: know if you can? Now? I have some questions. First
Speaker 2: of all, I would like call the Burcher's office and
Speaker 2: be like, is this for real?
Speaker 1: For real?
Speaker 2: Because you don't want to like get rid of the money.
Speaker 2: Then maybe you have to pay some of it back,
Speaker 2: But I do know they give over payments and you
Speaker 2: can use that money for books or for rent, and
Speaker 2: especially if this is grad school you're talking about, it
Speaker 2: could very well be for your living expenses. I am
Speaker 2: not I'm all about you get a lut, you get
Speaker 2: a windfall, and you sync that into an investment and
Speaker 2: then you let it grow. I think that is a
Speaker 2: great idea, especially if you have your living it you
Speaker 2: have a job, you can pay for your living expenses,
Speaker 2: you have an emergency fund, you don't have any debt,
Speaker 2: you have all of these you know, boxes ticked, and
Speaker 2: then this is literally just icing on the cake of
Speaker 2: your finances. Of course, I would say excess fund fun
Speaker 2: from a windfall, whether it's like a bonus at work,
Speaker 2: or it's a gift or something like that, or in
Speaker 2: this case, a refund check from your student loans.
Speaker 3: Yeah.
Speaker 2: Like sinking that all in one time into investments, I
Speaker 2: think can be smart. Caviat. I am not an investment advisor.
Speaker 3: Or Tiffany, but go see your grandma.
Speaker 2: Yes, this is so, this is my new advance. I
Speaker 2: don't think Mandy from six years ago would have been like, yeah, yeah, yeah,
Speaker 2: I don't know if I would choose bitcoin. First of all,
Speaker 2: it's hella expensive.
Speaker 3: Girl, I just looked it up.
Speaker 1: Eight is forty four point four nine to nine American
Speaker 1: forty four thousand dot almost forty five thousand American dollars.
Speaker 1: So says you're not getting a piece of bitcoin, Well
Speaker 1: you're not. You know, you can't afford bitcoin. Isn't that
Speaker 1: so crazy?
Speaker 2: So that's no, that is insane. Do you still have
Speaker 2: your little bitcoin? Girl? Didn't you have bitcoin for a while?
Speaker 2: I do.
Speaker 3: I have like a little piece of bitcoin. Anyway, we're
Speaker 3: not gonna talk about my big coins.
Speaker 2: Okay, I'm sorry.
Speaker 3: I could be on the island. It's like, no, I
Speaker 3: didn't have that much.
Speaker 2: I don't.
Speaker 3: Know, but I'll say this.
Speaker 1: I want you, because you're in grad school, I suspect
Speaker 1: that you have a private student loan. Private student loans
Speaker 1: interest rates tend to be a little higher than you know,
Speaker 1: federal student loans. So I want you to make sure
Speaker 1: that whatever that student loan interest rate is, you're likely
Speaker 1: to recoup that in an investment, meaning you know, because
Speaker 1: there I mean, I mean, I'm just making a number.
Speaker 1: Like if you told me that you know you borrowed
Speaker 1: it's like fifteen percent, I might be like, ooh, sis,
Speaker 1: let them keep their money. Because we know that the
Speaker 1: market on average US is yields on the low end
Speaker 1: seven percent back annually, on the high end ten percent
Speaker 1: back annually. So I would want to make sure that
Speaker 1: because I had a friend who had a student loan,
Speaker 1: and her interest rate, because it was private and she
Speaker 1: wasn't really paying attention, was higher than what you would
Speaker 1: suspect like a student loan interest rate to be. So
Speaker 1: just check on that, making sure that it's not double
Speaker 1: digit that interest rate on that student loan. If it's not,
Speaker 1: then you are likely to make that back, you know,
Speaker 1: through investments, you know, so you know, I probably wouldn't
Speaker 1: consider a big coin to Mandy's point, but certainly I
Speaker 1: would ask myself, what are some other ways that you know,
Speaker 1: you might just choose? Honestly, an index fund. I know
Speaker 1: they're so boring, but.
Speaker 2: Like that, it's an amazing option. Funds just get you
Speaker 2: a total stock market index fund. You have Vanguard Fidelity.
Speaker 2: They all have their own versions of it.
Speaker 1: Or ideally a ETF, so you could keep the fees
Speaker 1: low because you put in a mutual fund and that's
Speaker 1: somebody sitting there picking it, and that person wants to
Speaker 1: get paid. We don't like her, but instead of us
Speaker 1: the ETF, it's the algorithm.
Speaker 3: The algorithm doesn't ne much and so.
Speaker 2: The fees are lower.
Speaker 1: So you use it like a like, like Mandy said,
Speaker 1: a total market index fund ETF. If this was me
Speaker 1: and her, because we're talking to each other, we're not
Speaker 1: giving you, you know, advisor advice, but.
Speaker 3: Right many, that's what I would do if I was you.
Speaker 2: Yeah, absolutely, And I think that you're and with your
Speaker 2: with the fact that you have you know, you think
Speaker 2: you're gonna have gainful employment after you graduate once that
Speaker 2: thirty K loan comes due, you'll be able to pay
Speaker 2: it back, and you can also be investing for wealth
Speaker 2: now you're in your program. I think that is that
Speaker 2: is a savvy, rational way of doing it. But also
Speaker 2: the second part of this is can you sleep at
Speaker 2: night with this money in the market? Are you a
Speaker 2: savvy investor? Have you been investing already? Maybe you are
Speaker 2: because you're interested in bitcoin, or maybe you're not because
Speaker 2: you're interested in bitcoin. It can go either way. But
Speaker 2: I do think that you have to like factor and
Speaker 2: you know that bill will come do and do you
Speaker 2: feel confident you can pay it down? And are you can? You?
Speaker 2: Can you stomach the potential to see that investment go
Speaker 2: up and down with the market, and just keep your
Speaker 2: eyes on that that long term goal of what you're I.
Speaker 3: Would not invest in it in individual stock. That's just
Speaker 3: just like really risque, you know. So that's to your point.
Speaker 2: I would not, like That's why we like it. Than
Speaker 2: you could like you could you could buy a bunch
Speaker 2: of whatever you could. I mean, you can't buy any bitcoin.
Speaker 2: I don't know if you can buy a piece of bitcoin,
Speaker 2: but you could buy like you know, however, many shares
Speaker 2: of Tesla or whatever company you like. That's the thing
Speaker 2: that you. I said could, I didn't say shape, I
Speaker 2: said you can. It is possible, Yeah, it is possible,
Speaker 2: but it's not what I personally would do. I'm a
Speaker 2: kind of gal. Yes, hi, So if you thanks for
Speaker 2: the chuckle, Yes that was si bitcoin A.
Speaker 3: You're onto something. Yeah, you are onto something. No, for all,
Speaker 3: it's not in general, you're all that.
Speaker 1: The idea of investing excess money is a says, I
Speaker 1: see why you're getting your masters because you're smart.
Speaker 3: Smart. We're just like redirecting it towards you know, something else.
Speaker 2: So imagine what could have happened if I took that
Speaker 2: two thousand dollars refund check and invested it in an
Speaker 2: index fund fifteen years ago and had not just taking
Speaker 2: it to the gap.
Speaker 3: Where would I be?
Speaker 2: I don't even want to think about it. Like, yes, yes,
Speaker 2: you're very wise.
Speaker 1: If you have questions for us, you can go to
Speaker 1: Brownivision podcast dot com click ask us anything. You can
Speaker 1: email us at.
Speaker 2: Brown Vision Podcast at gmail dot com.
Speaker 3: Dot com dot or you can ig message us. We
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Speaker 2: Ida? Game? Brandish Brandhibition, pot yep at brand Ambition podcast,
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Speaker 2: I think six years and it's time for us to
Speaker 2: have a new Luke. So watch out for a new
Speaker 2: Brandhambisson podcast dot com coming sing I'm so excited. So
Speaker 2: thanks for rocking with us for six years.
Speaker 3: I know, look at that, it's going to first grade.
Speaker 2: We'll see all or wait, seventy two in dog years
Speaker 2: or no, how many years is a dog seven times six?
Speaker 2: Forty two in dog years? Oh?
Speaker 3: Almost as all as me.
Speaker 2: We're gen xers as a podcast yes okay, but in
Speaker 2: the podcast game, we've grown grown in the podcast game.
Speaker 2: We'll see you guys next Wednesday for the full BA
Speaker 2: show and then next Friday for the B, a Q
Speaker 2: and A right