Improving Your Credit Score

My Credit Score

Today for the first time I checked my credit report. It was not as bad as I had expected it will be, considering I have had 1 year 3 months to build it. The score was 728/999 and described as fair on Experia. It was also rated as 3/5 on Noodle another credit rating service. You can check your credit score on Experian for free but you have to cancel the service sine it's only a 30 day trial. Noodle is however free for life.

I discovered that a couple of things on my report were reported as positive and some as negative. The positive increase the score and the negative decrease it.

Positives

1. -          The total balance on my 2 credit accounts (excluding mortgages) is £0
2. -          I use less than 30% of my available credit for groceries and fuel
3. -          I keep up with my payments. I make my payments after at least a week
4. -          I have 0 unpaid debts at my previous addresses

Negatives

1. -          The average age of my credit accounts is 11 months. (This is because I have just settled in UK)
2. -          I have made 2 credit applications in the last 6 months. When you apply and get rejected for credit your scoring takes a hit.
3. -          I am not on the electoral roll. Being on the roll improves the score. I made an application for this last week.

 I would like to work on this score to make it excellent in as short a time as possible. This will help me in my vision for properties as I mentioned in the earlier post.

Credit History

Importance of Creating and Keeping a Good Credit History

I have had a change of heart! In my previous posts I told you how I hate credit cards. However having given great thought to my vision and strategy, a good credit history will be essential for my accent.

There are people I never lend money and the reasons are simple.....either they do not pay back or simply because I dont know enough about them to trust them with my money. The same thing applies to banks. They will give loans or mortgages to people who have shown in their credit histrory that they can repay their dues.

I have a vision to go into properties. By the way I stay in London and the property market here is not bad at all. The great thing about properties is that you can get a mortgage from a bank and a 5% (if it is your first home purchase) or 10% deposit. This means that if you want to buy a 100,000 home you will need only 5,000 down. Sorry my medieval laptop does not have a pound sign lol. Dont forget that with that 5,000 you will also need a good credit history since the bank will do what is called a credit check on you. The best way to create a credit history is to take a credit card.

How to create a good credit history

I was so eager to create a credit history that I hopped onto the first credit card provider I saw. This was an Argos Card which provides credit through Vanquis Bank. I quickly filled in all the details on the application form and SEND! I waited paitently for my credit card but got a regret letter. I was so disappointed. Damn! They told me that "at this moment having reviewed your circumstances we regret to inform you that you have not been successful in your credit card application bla bla...." and some other technical jargon. The reason they could not give me credit in my opinion was not based on my ability to repay but on my lack of records. I have literally zero debt! So their system screamed "ERROR".

So I set out to find out how I could get a credit card with no record at all and started googling how to get a credit card with a "poor credit history". I do not have a poor credit history I have no history....anyway you get the point. So I came across a credit card called Aqua. This card gives credit to novitiates at higher interests of about 35.9% APR. Their rate however goes down 5% every year for 3 years if you dont default on your payments. So I applied and got this card. I am using it to buy my groceries every week and pay them off every month. My groceries are about 20 pounds a week and simple math gives ermmm (counting fingers and toes....) yes.....80 pounds lol. That's very humble. Wish it could go lower but hey I dont wanna starve.

In about 1 year the big wig credit cards will want to roll with me. When that happens I will take out a loan and invest in my various high yield vehicles and do what is known as interest arbitrage. Getting money at 4% and investing it at 10-25% back in Zimbabwe. I just love the developing world. Gives you a chance at making super profits.

So I want to build my investment portfolio first before I do leveraged property portfolios. This means that I will be using debt to fund my property purchases. This is why I am creating a credit history and changing my value of despising credit cards. They are now a means to an end. There are other ways of creating a good credit history out there but today I've just talked about what I did. I like the pragmatic way of seeing and doing things because when someone has done it, so can you!

Chao

Millionaire Pledge

Millionaire Pledge

Last year I set about on a challenge to become a millionaire in 10 years time and the following is a template or strategy of how roughly I am going to achieve this.
 

Phase 1

Geographic spread of Investments

-          80-100% of investments in Zimbabwe

-          0-20% of investments in cash UK (emergency fund)

Type of Business

-           Micro Lending

-          Order Financing

Dollar range

-          0-£10,000

Phase 2

Geographic spread

-          70-100% of investments in Zimbabwe

-          0-20% in UK

-          0-10% in USA

Asset Type

-          Order financing

-          ZSE (Individual stocks)

-          UK Funds

Dollar Range

-          10-£100,000

Phase 3

Geographic Spread

-          Maximum investments (ZIM) not more than 50%

-          25% in UK

-          25% in USA (Global funds)

 Asset Type

-          Equities

-          Properties

-          Funds

-          Order Financing

Dollar Range

-          100,000- £1,000,000

-          From 500,000 max zim investment must have gone down to 50% or below

 

Net Worth Update

Net Worth Update

When I wrote my first blog page last year I got so busy working I forgot to come back day after day to keep you posted.

However I do not expect many people to be following just yet since what I have done so far is not yet follow-worthy. However it will become soon.

Just a second lemme open my excel spreadsheet with my exact figures so I can update you on my current net worth since I posted last year.

Still remember me telling you about a small business I have back in Zimbabwe? If not then go to my last post. This humble business has done a lot for me. I managed to invest and withdraw $4000 for my wedding and honeymoon in August 2014. So im happily married now woohoo!!!

Net Worth

After my wedding and honeymoon I started working and saving again. I have managed to achieve the following to date.

Investments in Zimbabwe: $4,247.28
Savings in UK: $1,456
Investments in UK: $2,250
Total: $7,953

My net worth is $7,953 since I have 0 debt. LOL I miss debt....! Anyways I have had things that ate at my net worth. I had a car impounded for lack of insurance.....silly mistake on my part to not to check expiry dates. That needed 240 pounds to be released. Ouch!!

Family Finances

Our family finances at the moment are as follows:

I earn $3,000 a month
My wife earns $1,200
Simple maths $4,200 (Total)

All our expenses total $1500
Total monthly savings $2700

Amounts are shown in USD for comparability with Zimbabwean investments

Personal Development

My wife is doing her degree in social work and cannot work as much as I do. She has had to change a lot of things about her spending. At first she put up a fight against the saving culture saying shed end up without a life but she slowly got in the trend. She had so many dresses in her closet that she had not worn yet and by saving she began to wear them. I still get her dresses here and there but she does not fuss about a dress a week anymore. As for me I can do with my current clothes till December.

I am thinking of doing a masters starting this year. This would raise my salary to the 30-40 thousand pounds a year range. Together with my wife after she finishes her degree we can earn 60-80 thousand pounds collectively and still use 12 thousand pounds a year for expenses. ;) I promise!!! Well if not 12 then max 14 or lets say 15 thousand lol. Married people you should understand me. Its midnight and I must go to bed thanks for reading and see you at the top.

Chao

Current Net Worth (In Pounds)

My net worth as at today is as follows

Fixed Assets        120
Cash                    70
Bank                    10

Total                     200

Liabilities               0
Equity                   200

Total                     200

As you can see above I am worth just a paltry 200 pounds. The fixed assets in question includes a laptop that I have prudently undervalued at 100 pounds. The good thing about this set up is that I am absolutely DEBT-FREE and will stay absolutely DEBT-FREE.

Monday 17.3.14 I have a job interview for a better paying job at an FX company. By the way I have an honors degree in Finance and Banking and experience in Equity analysis and management strategy consultancy. Last week I applied for the ACCA designation and I was given exemptions in nine subjects. I hope to finish ACCA this year at the latest next year June. The catch is that I have to pay 69 pounds (sorry my laptop does not have a pound sign) for the three first exemptions. Let me be clear from the onset: I do not hesitate to invest in myself after appropriate research about particular course curriculum. The best investment you can make is in yourself.

If I have a net worth of 200 now then its 999,800 to go!!

Ways to save money in London

There are a lot of ways to save money. I will be sharing you practical ways that can help you live frugal and save more as Dave Ramsey says "Live like no one else so you can live like no one else".

I should say that you can still be happy as you live a frugal life. Many people confuse happiness with fun. Money can buy fun but not happiness. Saving money does not mean a miserable life and lack of basics. It simply means you focusing at alternatives that conserve hard-earned cash.

1. Cycle to work (that is if you stay at considerable distances)

I stay about 5 miles from work and it takes me about 30 minutes to cycle to work. This is also a way to exercise and do free workouts. Hitting rather three birds with one stone. Waking to the station and getting to work before today was costing me 45 minutes (more than the cycling time) and train tickets of 3 pounds a day. By the way if you live far from work you may consider shifting to a house closer to work. I used to stay in Slough commuting to Reading everyday and it would cost me 8.30 pounds a day which translated to 50 quid a week. Since I moved it costs me nothing except energy to get to work.

For the bikers just make sure you have the biking accessories like helmet, reflective jacket, bike light (if travelling at night), warm outfits and mudguards if its raining. Leave home early for easy cycling that does not make you arrive at your place of work sweaty.

2. Drop the gym membership

Gym is great for workouts but unless you are a serious bodybuilder or "looser" you are wasting money and time (registering). I was going to the gym and discovered that I can do workouts that keep me in shape and give me the six-pack that I am after without giving away my hard-earned  192 pounds per year. There are apps that you can download for free that can give you perfect abs in 42 days. One such app is "Caynax A6W". By the way putting that 192 pounds every year for 25 years in a mutual fund that pays about 10% p.a (which is very possible) will give you 19,071 pounds.

3. Sharing rather than renting a full house

Rent is one of the biggest expense that gobble up Londoners' money. Rents that range from 600-800 are considered modest to most people but outrageous to me. Sharing a room will probably cost you from 250 -400 depending where you are. If you save 500 pounds by not treasuring privacy over the scarce pound you would have put 54,590 in a fund that pays about 10% p.a in the space of 25 years. (By the way look out for my post on finding the best mutual funds or ETFs).

4. Sack the fuel guzzler

Personally I do not have a car. Firstly the insurance payments make me groan and the need for it is very small. But for those with big pockets, no claims bonus and a genuine need I say small fuel economic engine saves the day. Diesel engines also tend to do better fuel consumption. Better still to those who are very wealthy, you can get the new hybrids that combine fuel and electricity. Not forgetting that even the red hybrids are green since they produce less CO2. Terminology!!! So ask yourself if you really need that "thirsty" tank.....


More tips to follow.Saving takes a resolve to silence "the baby" in most of us. The baby that screams wanting extra candy to feed the doll. Most of the things we buy we never use them, thus making the owners of ebay rich by listing our unwanted items there. Remember if you do not buy the things you do not need, you will not have to sell the things you need!!! Enough said.....

How I plan to make a million pounds in ten years

13th March 2014

I am a young old man aged 31 turning 32 on 19 October 2014.

I have decided to document my ascend to millionaire status. I am as sure as I am typing that it will happen. I moved to UK from Zimbabwe with nothing. The main reason I came was to be with my wife whom I legally married on 3 July 2013. I arrived in UK on 29 November. Before I left, I borrowed a friend of mine $1400 at an interest of 10% fortnightly to be able  to pay for my visa application and travel ticket. I paid it back in about 5 months with interest and grillings :). My wife helped me especially the first part of my stay, she was very supportive. Tip your hats!!! ;)

I stayed with a dear friend for about 2 and a half months after which I got a job that paid a basic salary of 12,084 pounds before tax a year. The first pay check i received was 850 pounds.

Here is how i used it:

Rent and deposit       510
Debt repayment        200
Mountain bike            70
Charity                       70
Total                        850

I had moved into a single room in Reading. The room cost me 340 and with a 340 deposit worked out to 680 (sorry no pound sign on my computer but everything else is working). I negotiated to spread the rent over two months hence it was 340 x 3 = 1,020. Meaning I would pay the months rent plus half the deposit which would work out to 510. The debt repayment was for money borrowed by my wife. She was stressed today because she has no transport money to go to work so she is sleeping over at work to be able to go through the period. I offered her my remaining 70 but she refused it she feels its inappropriate following the conversation we had.

I bought a bike today! Yeah! Now I can save about 864 per year that is the opportunity cost of going on the train. The daily fare to work was 3. This year im targeting to save about 6120 quid which is $9180. Above that I would like to make an extra 13,600 quid. The total income i will make and be able to save will be 9,146 + 10,212 = 19,358. The next year (2015) I would like to double it to 38,716 then the following year (2016) double it again to 77,432.

What remains will be seven years. I bet you would be laughing at me if you had read this before it happened but this is how i plan to snowball:

Year 4: 154,864
Year 5: 309,728
Year 6: 619,456
Year 7: 1,238,912
Year 8: 2,477,824
Year 9: 4,955,648
Year 10: 9,911,296

I am confident that I will become a billionaire in my lifetime using simple concepts that i will disclose later


I have listed a calculator on Ebay. It is a financial calculator that can fetch me about 20 pounds so hope that gets bought sooner rather than later.