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2018-01-18T17:52:26.972Z
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Improving your credit score is potentially worth nearly $100,000.

Consider two people:

  • Abby, who has great credit (760)
  • Derek, who has poor credit (620)

In their 30s, they decide to buy houses of similar prices. How much do you think they each pay?

Spoiler alert: Not the same amount.

Check out the graph below:


Source: MyFico.com. Data calculated in June 2017.

Because Derek has poor credit, he’ll end up paying nearly $68,000 more in interest than Abby — whose credit is awesome.

Don’t be like Derek. Instead, be like my readers who improved their credit scores by listening to some Indian dude online:

Improving your credit score can seem like an incredibly daunting task — but it’s actually pretty straightforward as long as you have the right systems in place.

And in a world where nearly 110 million Americans have NEVER even checked their credit score, making sure you have a good one will put you ahead of the curve when it comes to things like attaining a home mortgage, refinancing your student loans, buying a car, or even renting an apartment.

It’s also an incredibly easy way to get started on earning a

The All Weather Portfolio is a diversified asset mix first introduced by hedge fund manager Ray Dalio and popularized in Tony Robbins’s book MONEY Master the Game: 7 Simple Steps to Financial Freedom.

Here’s what the portfolio looks like:

I can already hear you now: “Yeah, yeah. Another portfolio mix that’s supposed to solve all my money problems. What makes this one different?”

Well as you might be able to guess, this portfolio is designed to weather through any financial climate — be it a bull market, bear market, recession, or whatever! And based on its historical performance thus far, it holds up to the name.

Let’s take a look at the All Weather Portfolio, its origins, and how you can build one yourself.

Who created the All Weather Portfolio?

The All Weather Portfolio is the brainchild of hedge fund manager Ray Dalio.

Dalio is the founder of Bridgewater Associates, the “world’s biggest hedge fund firm,” according to Forbes. The firm is also famous for its flagship “Pure Alpha” fund — a fund that holds nearly $40 billion.

Oh, and Dalio also predicted the 2008 financial crisis.

From The New Yorker:

In 2007, Dalio predicted that the housing-and-lending boom would end badly. Later that year, he warned...

Want to see the scariest picture ever?

It’s an image that strikes fear into the hearts of financial pundits all over the world. It’s one that could mean the difference between a thriving bull market or the downswing of a bear market. AND it’s been known to throw entire economies into a state of abject terror and chaos.

Ready? Okay, don’t say I didn’t warn you…


(Source: Britannica)


Pictured: An actual financial pundit’s reaction to an inverted yield curve.

That graph is the dreaded inverted yield curve — and while it might not seem like much at first glance, it’s actually the bellwether for an economic recession. You know, that thing that happened in 2008 that was kind of a huge deal?

Luckily, the inverted yield curve is a rare occurrence … BUT it’s useful to know what it means and how to spot one when it happens.

Why? Simple: You don’t want to get swept up in the herd mentality of one, and being able to recognize when it happens is the first step in preventing yourself from making bad decisions based on what everyone else is doing.  

So let’s take a look at the inverted yield curve, how it happens, and what it means for you and your...

You’ve probably had a parent or teacher ask you, “If your friends jumped off a cliff, would you do it too?”

Of course not! That’s insane. You’re a strong and independent free-thinker. Why would you do that?


Well, I guess that’s fine.

…but what if your friends weren’t jumping off a cliff?

Instead, what if they’re all buying the latest iPhone? Every day you see them playing with cool apps, taking great pictures, and talking about how great the phone is. After a while, it’s not so much a question of if you’re going to buy an iPhone but when.

This is herd mentality — and you’ve probably seen it before:

  • Investors rushing to buy a specific stock because it’s supposedly “hot.”
  • Parents frantically buying Tickle Me Elmos for their kids after they see every other parent doing it.
  • Fidget spinners. Dear god, so many fidget spinners…

When it comes to your personal finances, herd mentality could mean the difference between getting swept up by the panic of a recession and keeping your head.

Let’s take a closer look at herd mentality and see how exactly it can harm AND help us.

What is herd mentality?

Herd mentality describes a behavior in which people act the same way or adopt similar behaviors as the people around them — often ignoring their own feelings in the process.

Think of a sheep blindly following the flock no matter where they go just because that’s what the...

Credit cards get a bad rep — and for good reason. On the one hand, they can feel like God’s gift, allowing you to leverage their awesome travel rewards, easily track your spending, take advantage of free car rental insurance, and build credit for things like home loans.

BUT credit cards can also be an absolute nightmare. Practically, everyone has a story about falling into debt, paying late fees, or dealing with unauthorized charges.

That’s why it’s so important you optimize your credit cards to make them work for you instead of the other way around.

And while there are many different systems you can put in place to achieve this, I want to talk to you about one element of your credit card that can potentially save you hundreds a year: credit card interest rates.

Why is your credit card interest rate so important? Check out this email I got from a reader named Aaron a while back:

I was fortunate enough to come out of school with no student loans, but do have $4,364.11 in credit card debt over 2 cards. One is $999.03 and the other is $3,365.08. I just started reading your book yesterday, today I called the card with the higher balance to lower my APR from 19.99%. I have had this card for almost 4 years. My Mom had been paying the minimum for a year or so, but since I became full time I took...

What are some of the greatest rivalries out there? A few that probably come to mind:

  • Muhammad Ali vs Joe Frazier
  • Coke vs Pepsi
  • Tupac vs Biggie

Let me add in one of my favorites from the financial world: bull versus bear.

No, I’m not talking about some ancient feud between two deadly animals (though that DOES sound awesome).


Better than McGregor vs Mayweather.

Bull vs bear describes investment trends that have the power to impact the global financial market. It’s a phrase you’ve probably heard thrown around or referenced before…but what does it mean? And how does it affect you and your investments?

Let’s take a look at bull vs bear markets, examples of each, and the impact they have on your financial strategy, to set the record straight.

The difference between bull vs bear markets

In a nutshell:

Bull market = Market is up

Bear market = Market is down

That’s it.

.

.

.

Oh, you wanted more? Great! Let’s take a dive into each market and see how you can recognize one when it happens.

Bull market: Market is up

You’ve probably seen this statue before.

This is the famous Wall Street Bull — and its placement within the beating heart of America’s financial institution is no mistake.

“Bull market” is a phrase used to describe an economic environment that is growing and...

It’s funny how your credit card can either be one of the coolest parts of your personal finances

…or the absolute worst.

And even if you do everything right (like pay your credit card bills on time, keep your credit score high … ) you STILL might run into a situation where your personal finance structure is compromised by your credit card.

One of the most common examples: Erroneous credit card charges. They’re a credit card owner’s worst nightmare. A few examples:

  • Your gym accidentally charged you for an extra month.
  • After canceling a flight, your airline still charged you a luggage fee.
  • Discovering that somebody swiped your credit card information and went on a week-long shoe shopping spree.

Luckily, you don’t have to put up with ANY of that because I have the perfect system to help you dispute any erroneous charges that show up on your statement.

How to dispute credit card charges with your own personal army

A while back, I decided to cancel my mobile plan with a certain nameless cell phone company. When I canceled though, they told me my account had a $160 charge.

“For what?” I asked. Wait for it…

“An early cancellation fee.”

An exclusive GIF of my reaction:

First off, I knew I had already negotiated out of an early cancellation fee a long time before that call. (Some cell phone companies make a lot of money from pulling shady moves like this,...

Our product team has been working on something so interesting, I asked them to share some of the insights we’ve discovered.

Alistair Clark, one of our product developers, has been speaking with people who have already done the basics of personal finance: These people have already set up automated savings accounts and invested. Many have accumulated considerable amounts of money in the hundreds of thousands (or millions) of dollars.

So what’s next? What do you do when you’ve already done the basics of personal finance?

Alistair got the kind of behind-the-scenes access that few of us have. He spoke to wealthy people about their hopes, fears, and dreams around money — and discovered that once you’re at a more advanced level, your concerns change. Your goals change. And whether you intended to or not, your lifestyle changes.

Let’s see what he found.

Alistair, take it away…

_

Every week, Ramit gets thousands of emails with questions about personal finance.

99% of the time, his answer is the same: “Go read my book, I Will Teach You to be Rich.

But 1% of the time, he gets a really interesting email that doesn’t have a simple answer, and he’ll forward it over to the IWT product team to see if we can help.

For example, check out this email a reader sent to Ramit after reading the IWT book:

It’s too beginner for me. I finished because of the entertaining style and I like to vet books before recommending them. My stage is this:

  1. Zero debt… pay credit cards to zero, twice...

So you want to learn about portfolio rebalancing? That’s awesome! Seriously, not a lot of people bother to do it or even take the time to learn what portfolio rebalancing means.

And it’s not just a meaningless financial buzz phrase. Portfolio rebalancing is one of the most important things you can do for your investment strategy.

That’s why I’m going to give you the lowdown on exactly what portfolio rebalancing is, how you can do it today, and also how you can set up your finances to never worry about it ever again.

What is portfolio rebalancing?

Imagine you’re a 25-year-old whose target portfolio is 90% stocks and 10% bonds.

But after a year, you’ve found that your investment in bonds has grown. Good job, you! So now they make up 20% of your overall portfolio:

Since you’re still young and have a higher risk tolerance, you’ll want to continue investing more in stocks. That’s why you should rebalance your portfolio to go back to your original plan.

In essence, rebalancing your portfolio is the process of modifying your...

Readers will be surprised to hear that I wasn’t always the charming, hilarious, and stylish personal finance expert they know now.

Hell, I was so awkward I made Urkel look like Robert Downey Jr.

Which is why I had to smile when I got this email from an IWT reader named Emily a while back:

“How do you approach companies/or anything else when you don’t have any confidence? I seem to go mentally blank. And the words don’t come out at all. Backwards and not in order.”

And you’ve probably been there before:

  • You walk up to a group of friends talking. Stand there awkwardly while waiting for one of them to notice you. Wish for death.
  • You start telling a story to a group of people and — in the middle of it — realize the story sucks. Continue anyway.
  • You go to an event and instead of meeting people, pull out your phone and furiously check email.

It’s a fascinating paradox. With your friends or family, you tend to have the BEST stories, but if you just met a group of people, all of a sudden your mind goes blank and you have nothing to say. Most people are willing to say “that’s how it is,” but you can actually fix by implementing the right systems.

Today, I want to teach three systems that helped me know exactly what to say in social situations, and — more importantly — how to say it.

They are:

  1. Perfect Words
  2. Story Toolbox
  3. Question Toolbox

Let’s get...

So you just heard the term “debt to asset ratio” thrown around by that pedantic guy at a cocktail party and now you’re surreptitiously looking up the term on your phone so you don’t look dumb.

(And maybe you also want to be able to use the term yourself.)

Here’s what debt to asset ratio means:

When you’re a business (i.e. you have your own hustle or side hustle), your debt to asset ratio represents the total amount of debt you owe compared to your total amount of assets.

This determines how much lenders will be willing to give you AND helps you be aware of how much you owe to creditors.

If you’re an individual, the debt to asset ratio won’t be as relevant to you…but your debt to INCOME ratio will be. That’s the number representing the total amount of debt you owe compared to your income.

Mortgage lenders, bank loans, and anyone giving you credit will take a look at your debt to asset/income ratio in order to determine how much they’re willing to lend to you.

Your debt to asset ratio (or debt to income ratio) could mean the difference between securing a loan for your business or home, and not getting a single dime from a lender.

To help you get a better understanding of it, let’s break down what debt to asset ratio might look like in real life.

ELI5: Debt to asset ratio

Let’s say an unemployed acquaintance of yours, we’ll call him Jeff, asks to borrow...

Freelance marketing is a perfect way to earn extra money, flex your creative skills, and make valuable connections and networks.

The best part: Companies are in constant need of great freelance marketers.

Some fast facts:

And somebody has to help fill all those roles. That’s where YOU come in.

If you’re a beginner though, you probably don’t know how to start.

That’s why we talked to actual professional freelance marketers to get their best tips to help you dive into freelance marketing.

Those tips are:

  1. Find your niche
  2. Find clients where they live
  3. Be flexible with your rates (at least at first)
  4. Make your damn deadlines
  5. Get referrals
  6. Treat yourself like a business

But first, you need to understand what freelance marketing is though. Doing so will provide valuable context for the following tips and help you get a better sense of what you’re getting into.

What is freelance marketing?

Freelance marketers help companies and businesses promote their brands.

Your job is to help:

  1. Grab attention
  2. Drive potential clients to a website/business
  3. Convince them to buy a product

And most EVERY business needs marketing help in one shape or another — especially new ones. Think about it: The busy founder of a new tech start-up isn’t going to want to focus on writing great sales letters or coming up with tweets.

That’s where YOU come in.

Maybe you’re a creative hustler...

You know what one of my favorite parts of vacations is?

No, it’s not going to awesome places.


The backyard pool of my hotel room in Thailand.

Or eating delicious food.


Follow me on Instagram: instagram.com/ramit

Or making cool friends along the way.


I’m the one on the left.

One of my favorite things is planning the vacation. Nothing makes me feel better than a well-formatted calendar with flight info and dinner reservations.

Check out this itinerary I prepped for a recent trip to Singapore:

I even include things like the weather and information for airport lounge access.

Why show you this? Three reasons:

  • I want you to be 100% clear of how much of a weirdo I am....

So…you’re reading an article about how to stop procrastinating instead of doing what you’re supposed to be doing.

That’s okay. I’m not going to lecture you to finish your goals and I definitely won’t act like I haven’t been there before.

What I am going to do is show you the EXACT steps you can take to demolish procrastination.

They are:

Let’s not waste any more time and jump into it.

How to stop procrastinating in 5 steps Step 1: Be brutally honest about your priorities

How often has someone asked you to do something and you told them, “I don’t have enough time for that right now.”

For example:

FRIEND: Hey, do you want to check out that new bar tonight?

YOU: Sorry, I’m super busy tonight. Maybe some other time. (Proceed to stay at home, binge-watching Netflix all night.)

Another example:

FRIEND: I’m going to take that improv class you said you were interested in. Want to join?

YOU: Ugh sorry, I don’t have enough time right now.

We LOVE using “time” as an excuse because it’s easy. Who is going to accuse you of having too much time on your hands? Nobody.

When we make this excuse, however, we only cheat ourselves.

Instead, it’s better to be honest with yourself and others and say, “I appreciate...

I want to tell you the story of two people: Andrew and Mary.

Both are 21, fresh out of college, and have the same jobs in the same industry.

When it comes to investing, though, Mary decides to start putting money into a diversified portfolio of mutual funds. It’s not a lot at first, but over time she puts more money into her funds as she earns more.

Andrew, on the other hand, buys a few individual stocks after watching The Wolf of Wall Street — but sells them as soon as prices dip a little.

Occasionally, he puts away an arbitrary amount of money in a savings account and doesn’t seriously start investing until he’s in his 50s.

Fast forward 40-ish years. The two are now closing in on retirement age. However, their financial situation couldn’t look more different.

Mary is well off. She has a sizeable nest egg due to her decision to invest when she was 21, and doesn’t have to worry about money when she decides to retire soon.

Andrew didn’t start investing until long after Mary started. As a result, he has to consider forgoing retirement while he saves up enough money. This makes him a crotchety old man and he spends his days shouting at children and small animals who venture onto his lawn.

Okay, that’s a little dramatic — but there’s something to learn here. On paper, Andrew and Mary seemed to be on the same path. Same age. Same education level. Same job. So...

Last week, I wrote about strategic asset allocation.

That’s when you maintain a fixed allocation percentage for your asset classes and rebalance those assets every year. It’s the set-it-and-forget-it approach to your portfolio.

Today, I want to talk to you about its more rebellious sibling: tactical asset allocation.

Tactical asset allocation is the practice of actively managing your portfolio and changing the amount you hold in each asset class based on how the market is performing.

To get a better understanding, let’s take a deeper look at how exactly asset allocation works and why tactical asset allocation might be a good fit for you.

What is asset allocation?

You can allocate these investments into “asset classes.” The major ones are:

  • Stocks. Otherwise known as equities. When you own a company’s stock, you own part of that company.
  • Bonds. These are like IOUs that you get from banks. You’re lending them money in exchange for interest over a fixed amount of time.
  • Cash. This includes physical money and the money that you have in your checking and savings accounts.

In short, asset allocation is just a fancy way of describing where you put your money. When you set up a strategic asset allocation plan, you decide on a goal of how much money you want to have in each asset class.

Confused? Don’t be. It’s a seemingly complex term. Sometimes I use the phrase “asset allocation” at cocktail parties to sound smart. The host, whose party I...

If you want to offset the cost of college, there’s no better way to do it than by getting scholarships.

And it doesn’t matter where you come from or even if you weren’t a “good” student. ANYONE can get scholarships as long as they have the right systems.

I know — because I built a system that helped me earn six figures in scholarships to go to Stanford.

That’s why I want to share the exact system I used to earn six figures in scholarships for college today.

How to get scholarships in 3 steps

Step 1: Adopt an application mindset

Step 2: Find the scholarships that will earn thousands

Step 3: Apply to ALL the scholarships

Step 1: Adopt a scholarship application mindset

One thing I’ve noticed is that a lot of people just hope they get “a scholarship” for college.

Instead of hoping you get one scholarship, you need to reframe it to “I hope I get a LOT of scholarships.”

This is a mindset of abundance — and it’s incredibly important when you start applying for different scholarships.

Which means two things:

  1. Instead of hoping you get a huge scholarship or full ride, you need to apply to as many as possible. After all, $500 here and $1,000 there can really add up.
  2. Don’t get discouraged if you don’t get one you apply for. Scholarships are a numbers game, and many have only a handful of applicants.

Use every resource at your disposal — apply to any and all relevant scholarships...

I want to apologize for yesterday’s email.

If you’re subscribed to I Will Teach You To Be Rich, you received this email yesterday.

I see a lot of things wrong in that email.

  • “Guaranteed to beat.” (no, nothing is guaranteed in investing)
  • “People have always been stupid.” (why is this even here?)
  • “Made-up money that only exists on the internet” (all currency is made up…so what?)

Why did we send such an inflammatory email? One that doesn’t even represent what I really think about Bitcoin?

I want to explain how this happened, my actual views on Bitcoin, and finally what we’re doing about this.

First, my comments on yesterday’s email.

  1. It was unnecessarily dismissive of Bitcoin, which has had a major impact on money, technology, and culture in the last few years.
  2. It was over-sensationalistic and clickbait-y.
  3. It didn’t sound like us.
  4. It had nothing to do with the post it was linking to.
  5. It was not aligned with my view on Bitcoin.

In a world of hype, I believe in cutting the B.S. and being honest with you, and this email failed.

That No-B.S. view is why I don’t allow anyone with credit card debt to join our flagship courses, which costs us millions of dollars a year. One of our core values is “No B.S.” (it’s why that phrase is...

I hope you’re ready. We’re about to discuss one of the hottest, most exciting investment topics out there.

No, I’m not talking about putting your money in Tesla.

And I’m not even talking about how awesome Bitcoin is (mostly because I’m not an annoying bro dude).

I’m talking about something even MORE exciting:

Strategic asset allocation

Strategic asset allocation is the practice of setting a goal for each of your asset classes (e.g., stocks, bonds, cash), and rebalancing it every year as you realize earnings on your investments.

 This is a great tactic if you want to:

  • Focus on long-term financial goals
  • Enjoy a hands-off approach to your portfolio — and not wring your hands over how the market is performing
  • Reduce your risk as an investor

Think of your investment portfolio as a garden: If you want your zucchini to be only 15% of your garden, and they start growing like crazy and take over 30%, you’ll want to rebalance by either cutting the zucchini back, or getting a bigger backyard so the zucchini is back to covering only 15%.

I know, I know. I should start I Will Teach You To Garden.

You’ll want to rebalance your portfolio every 12 to 18 months to ensure you’re getting the most out of your investments.

Let’s take a look at a non-gardening example:

Imagine you’re a 24-year-old who just opened up a brokerage account with $3,000. If you want to employ strategic asset allocation, you’ll want to set certain percentages...

Investing can be incredibly intimidating to beginners. The subject is fraught with questions like:

“What stocks should I invest in?”

“How do I invest for retirement?”

“What the hell is a mutual fund anyway?”

And while there are many ways to approach your investments, technology has allowed people to streamline the process and take just a little bit of the headache away from it (*cough* like automating your finances *cough*).

Enter: micro investing. At its core, micro investing is investing small amounts of money into a portfolio. (For example, taking the change left over from a purchase and automatically placing it into a savings account.) This is typically done through an app that automates the entire process for you.

Today, I want to take a look at why these apps can be effective ways to save and share three you can download to get started.

What are micro investing apps?

Micro investing apps invest small amounts of money by connecting your debit card, credit card, or bank account to the app. In doing so, they bypass the fees you get when dealing with brokerage firms, allowing you to invest small amounts of money without breaking the bank.

Though the way the apps work varies, they usually use the money you spend on purchases to invest. Whenever you make a purchase with those cards or bank account, the app automatically rounds your purchase up to the nearest dollar and invests the difference for you.

For example, if you go out for dinner and end up spending $17.85, the app will...