The Finances and Debt Thread

TopGun said:

As someone that worked on the other side, I can tell you that most banks are not going to devote extra resources to running unnecessary reports. They'll run your statement once a month and report that balance to you and the credit bureaus. They will not wait until the end of the month and then re-run every single account again.

When the credit reporting agencies choose to update their reporting is not the same thing as when the credit company reports balances.

Changing your statement date is easy, most companies have it as an option to do online.

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I agree with all this, but why do balances show up on cards that get paid in full every month if the balance is reported at the time the payments are due?

I have seen this several thousand times. People are always shocked they have balances because they "they pay them in full" And they have the type of money and credit I believe them.

The reason is because most credit card companies just report all balances once a month at the end of the month. I am not disagreeing they only report once a month, not disagreeing credit agencies only up date once a month, I am disagreeing that the due date is when it is reported. I have thousands of personal experiences where this wouldn't make sense.

Lee said:

I agree with all this, but why do balances show up on cards that get paid in full every month if the balance is reported at the time the payments are due?

I have seen this several thousand times. People are always shocked they have balances because they "they pay them in full" And they have the type of money and credit I believe them.

The reason is because most credit card companies just report all balances once a month at the end of the month. I am not disagreeing they only report once a month, not disagreeing credit agencies only up date once a month, I am disagreeing that the due date is when it is reported. I have thousands of personal experiences where this wouldn't make sense.

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Most people do not pay off their cards before the statement date. They receive the statement and then pay that full amount prior to the required date to avoid accruing interest.

For instance on my main card, the statement date is the eighth of the month and the payment date is the 6th of the following month. This means that my balance at the end of a month is usually almost twice the amount of my statement, and yet my statement amount is the only thing reported. Otherwise charges would be double reported (one charge reported in two different months) and utilization would be double what it actually is.

TopGun said:

Most people do not pay off their cards before the statement date. They receive the statement and then pay that full amount prior to the required date to avoid accruing interest.

For instance on my main card, the statement date is the eighth of the month and the payment date is the 6th of the following month. This means that my balance at the end of a month is usually almost twice the amount of my statement, and yet my statement amount is the only thing reported. Otherwise charges would be double reported (one charge reported in two different months) and utilization would be double what it actually is.

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Look I know they say its the closing date, but in practice its wrong per my experience. My dad always pays at closing date but has balances at end of the month.

I think most credit card companies just pick a date at the end of the month and report all of their customers.

Credit is very, very annoying.

Anyone have investments in pharma?

MGMT said:

Anyone have investments in pharma?

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I've been following one mutual fund: PRHSX. It has done very well, but medical stocks can vary more than almost any other field.

Goddamn

Just opened. My student loan docs and it got more complicated than I thought it would.

64000, 4.8%, 10 years at 670 a month

Im going to say I make about 65000 and the taxable income is substantially less. Like maybe 30 or something. All bills (rent to entertainment) come to 2500/mo, 30k a year.

My current job likely won't pay any more. I will at some point transition to accounting which starts at 60 and ends up at 90k and the taxable income increases drastically.

Im looking at IBR and my payments would be cut in half and total paid is roughly the same, it's just spread out over 15 additional years. I don't know how much a higher agi effects this.

Also I have no idea how I ended up with 4.8, but my credit sucked and its 680 now. Should I refinance? It's still climbing so I could wait.. Also should I consolidate?

Also, I want to invest and plan on 7% annual return. How does this effect where I put how much of My money?

David. said:

Goddamn

Just opened. My student loan docs and it got more complicated than I thought it would.

64000, 4.8%, 10 years at 670 a month

Im going to say I make about 65000 and the taxable income is substantially less. Like maybe 30 or something. All bills (rent to entertainment) come to 2500/mo, 30k a year.

My current job likely won't pay any more. I will at some point transition to accounting which starts at 60 and ends up at 90k and the taxable income increases drastically.

Im looking at IBR and my payments would be cut in half and total paid is roughly the same, it's just spread out over 15 additional years. I don't know how much a higher agi effects this.

Also I have no idea how I ended up with 4.8, but my credit sucked and its 680 now. Should I refinance? It's still climbing so I could wait.. Also should I consolidate?

Also, I want to invest and plan on 7% annual return. How does this effect where I put how much of My money?

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You are going to work towards building your net worth, which will serve you later in life no matter what you do. 4.8% is pretty good for a student loan, especially now. You can see if a better rate is out there, but this may be the best you can get right now. Buy a house ASAP. This will be a top two net worth builder for you because you're paying your mortgage instead of someone else's. Definitely invest any extra money you have left over. Don't put it towards your student loans. You get a tax break that forgoes your standard deduction (meaning you don't have to reach beyond your standard deduction before saving money) by being able to deduct the interest you pay on student loans. Your marginal tax rate is probably 12%, so you'll save 12% on that area. Pay only the minimum towards student loans.

To recap:

1. Buy a house with a 30-year mortgage. 15 year is invented to get a faster cashflow for mortgage loan companies. There's a reason why the push them so much. The savings in interest is less than what you could do if you reinvested the money. Plus you'll always have big savings, whereas money put into a house you can't as easily get back.
2. Invest, which breaks down into minimum 401k to get max match, max out IRA, max out 401k, then brokerage account in that order.

The Process God said:

You are going to work towards building your net worth, which will serve you later in life no matter what you do. 4.8% is pretty good for a student loan, especially now. You can see if a better rate is out there, but this may be the best you can get right now. Buy a house ASAP. This will be a top two net worth builder for you because you're paying your mortgage instead of someone else's. Definitely invest any extra money you have left over. Don't put it towards your student loans. You get a tax break that forgoes your standard deduction (meaning you don't have to reach beyond your standard deduction before saving money) by being able to deduct the interest you pay on student loans. Your marginal tax rate is probably 12%, so you'll save 12% on that area. Pay only the minimum towards student loans.

To recap:

1. Buy a house with a 30-year mortgage. 15 year is invented to get a faster cashflow for mortgage loan companies. There's a reason why the push them so much. The savings in interest is less than what you could do if you reinvested the money. Plus you'll always have big savings, whereas money put into a house you can't as easily get back.
2. Invest, which breaks down into minimum 401k to get max match, max out IRA, max out 401k, then brokerage account in that order.

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This is a lot I really appreciate it. I keep forgetting to respond t this so I'll at least get it rolling.

I live in SD and housing market is ridiculous. 400k for a 1 br 600sft condo. Rent to own ratio is kind of silly. What impact does thus have on how my money is allocated

David. said:

This is a lot I really appreciate it. I keep forgetting to respond t this so I'll at least get it rolling.

I live in SD and housing market is ridiculous. 400k for a 1 br 600sft condo. Rent to own ratio is kind of silly. What impact does thus have on how my money is allocated

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Condos are tough. They usually involve large monthly fees to be part of some sort of association. I'd personally move so that you can maximize your profits unless something is really tying you there like family. You want to have as much of your income be at least somewhat liquid as possible. 401k/Roth 401ks aren't too liquid, but you can get money out sometimes if you need to. Roth IRAs are more liquid because you can always take out what you put in as long as you haven't lost money, in which case you can only take out what is still left. Minimize house payments by doing 30-year mortgates. You don't really save money in the long run by paying off a mortgage earlier if you have half a brain when investing otherwise. Do you see how hard Dan Gilbert pushes 15-year mortgages with Rocket Mortgage? There's a reason for that, and it isn't because it benefits you the most.

As for my situation, I'm still looking for another job. I've applied to many banks, and I've also applied to a bunch of jobs at Boeing. I've also applied to Kaiser Permanente as well as a supervisory job with the State of Washington. No luck so far lately. My buddy works for a company that contracts with Boeing for workplace health and fitness, and the job is pretty nice. I may apply to them as well.

After I crashed my Audi A3, I ended up using a junker for a few months until my wife and I paid off our credit card debt. After that, she allowed me to get a used Lexus IS350. We're now saving up for a house. We're also going to need to take about 26k in student loan debt off of my parents because it's from an equity loan that they need cleared for other purposes such as house remodeling. This debt is and always has been mine. I'm hoping I can find a good rate as well as benefit from the tax benefits from paying interest.

FINALLY got another interview with a bank, and it's for a branch manager position. This one was over the phone with a credit union up in Bellingham, which is actually a city my wife and I would love to move to and have been trying to on and off for about four years now. However, she is about to start an internship that would be hard to find a replacement site for in Bellingham, and it will last about a year, so it's almost like finally this great job opportunity opens up after years of trying, and now we are split on whether or not we would go if I were offered it. I guess let's not put the cart before the horse. Just excited is all.

Anyhow, I'm having an in-person interview with this credit union for the branch manager position later today (Friday) at 4pm PST. However, a massive, massive snow storm is coming in, so I or they might cancel. Base pay is $60k from what they've said. They're currently working on a bonus structure, but it's not out yet. If the bonus structure is just talk right now, I'm going to ask for pay closer to $70k since that's closer to what bank branch manager average after bonuses.

I'll let you all know how it goes.

The interview went really well. I had to drive in a snow storm each way to get there, but I made it without a problem. I was able to chew the fat for about 15 minutes after the interview, so I'm hoping I could have built some rapport with the interviewer. I'm supposed to know next week if I'm going in for one, last interview.

The Process God said:

The interview went really well. I had to drive in a snow storm each way to get there, but I made it without a problem. I was able to chew the fat for about 15 minutes after the interview, so I'm hoping I could have built some rapport with the interviewer. I'm supposed to know next week if I'm going in for one, last interview.

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I was called, and they want to do another, final interview with me. If I pass this, I get the job. There are two spots open, so I think my chances are good. Often, the final interview is more of a confirmation that the previous interviewer's selection of a candidate is fine than the hardest interview of them all. The interview is on Friday at 4pm. I'll let you all know how it goes.

The Process God said:

I was called, and they want to do another, final interview with me. If I pass this, I get the job. There are two spots open, so I think my chances are good. Often, the final interview is more of a confirmation that the previous interviewer's selection of a candidate is fine than the hardest interview of them all. The interview is on Friday at 4pm. I'll let you all know how it goes.

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Credit unions pays less then banks typically. I’m assuming since you’re on the west coast their may be a different pay scale due to cost of living. Credit unions in Ohio don’t want to pay much more then 50k for a bm and don’t really have any incentive plans.

The Voice said:

Credit unions pays less then banks typically. I’m assuming since you’re on the west coast their may be a different pay scale due to cost of living. Credit unions in Ohio don’t want to pay much more then 50k for a bm and don’t really have any incentive plans.

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60k base is what they said they start their BMs at. I'm going to negotiate for more since they dont have an incentive plan yet. Many credit unions around here have incentive plans from what I've seen online.

The Process God said:

60k base is what they said they start their BMs at. I'm going to negotiate for more since they dont have an incentive plan yet. Many credit unions around here have incentive plans from what I've seen online.

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Huntington is at 60+ base here plus incentives. It’s been a while since I’ve been in the job hunt though, so I’m not sure how much has changed.