Tag Archives: debt consolidation

Just Starting Out in Your 20s

This is probably the scariest moment in your life. You’re starting out and living on your own the first time.

Your parents are there, but not close enough.

Your don’t have any saving, or if you do it’s a small sum only. You don’t know much about money or investing because it was never taught in school or from your parents.

You’re earning a beginning income, which is eaten up with high tax rate, because you have no business, real estate property or family to take advantage of any tax deductions.

According to the x-curve, you are in the beginning of your life with many responsibilities and minimal wealth. You are in the very beginning of your journey to financial freedom.

But it’s okay. This is a good thing, because you have "time" on your side. According to the wealth formula, you need time to grow your money.

You're lucky at this stage.

Take advantage of this benefit as time waits for no one. The earlier you start saving the more your money compound as time goes.

Here are a few Strategies to Achieving Financial Freedom for the Beginners.

Get financially educated. I can’t stress it enough. Learn how money works now, or work the rest of your life for money. Sign-up for FREE financial strategies workshops in Honolulu to get financially educated.

Get an income from a job, a gig or a business. Whatever you can get some money in. You can’t get money without doing anything. But you can in fact start making money without spending much. For example, driving for uber or starting a business in the financial industry.

Now that you have some money coming in. Be sure to Pay Yourself First…put aside at least 3-5% of your income every month in your “rainy day” bucket. Start with a small insurance policy, because if something happens to you, your family immediately would have $100,000 or more. Once you have an insurance policy in place, put the rest of the money in an emergency fund that can provide for 3-6 months of your living expenses.

Live Below Your Means and spend what is left after your saving. This is the money that you can use to pay off your debts, go out to nice dinner, buy a few nice things for yourself. Buy only what you can afford with your money NOW, not your future money. This is avoid getting into debts.

Manage Your Debt. Some of you may have college debts, and some of you may also have consumer debts. High interest on credit card debts can compound quickly and eat up your savings and slow your progress to financial freedom.

When you have saved a big enough chuck of money, then you can use that for down payment for your first property or invest.

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Learn how to money works, build wealth, and protect your income and assets.

There is no magic for building a solid financial foundation.

You can make more money. The old way of thinking—getting a good job, working until 65 and retiring happily—is over. Nowadays you should be more proactive in your thinking about making money.

If you look for it, you’ll find it.

Make it a mission to change your family’s financial future.

1. Increase your cash flow. Make more money when you can, while you can. Have multiple sources of income.
2. Spend less. Cut down your expenses. It’s not how much you earn that counts. It’s what you keep. Set aside 5, 10, 15% of your income to savings.
3. Reduce your debt and liabilities. Interest on the debt will interfere with your goal for long-term asset accumulation.
4. Understand how money works. You must take time to understand how money works. You must learn how to make money work for you.
5. Have a financial goal. Set up a plan of action.
6. Take care of your responsibility. Have proper protection.

This book is the first step to your financial freedom...

What is a Home Equity Line of Credit or HELOC?

What is home equity line of credit or HELOC?

If you have used a credit card, you'll easily understand the concept of the home equity line of credit or HELOC. In simple term, a HELOC is a revolving credit, like the credit limit with your credit card. The difference is that a HELOC uses your home's equity as a collateral. Basically, it's a credit card secured with your home's equity.

And what is home equity?

Home equity is the difference between what your home market value and the total home mortgage you owed. For example, your home is now worth $1 million, and you have a home mortgage of $300,000. So in this case, your home equity is $700,000.

Most banks do not let you borrow 100% of your home market value. The most I've seen are 90% and 95%.

How much home equity line of credit can you qualify for?

The qualification is very similar to qualifying for a home loan. You still have to show proof of income, good credit score, appraisal, etc. The general rule to figure out how much you qualify for is 80% of your home equity.

We'll use the same example we used earlier. So your home is worth $1 million in the current market. 80% of that $1 million is $800,000. We then subtract your current outstanding mortgage of $300,000. Therefore, you qualify for up to $500,000 in HELOC, given you meet income and credit score requirements.

What Can You Use a HELOC for?

You’ve probably hear many times radio or TV advertising HELOC to finance your dream vacation, wedding, dream car, dream wedding, etc.

You should see me roll my eyes when these advertising show up…these are the worst way use the money.

First of all, when you borrow money to buy things that do not return money, that’s bad debts. You’re digging a hole for yourself.

A better use of the HELOC is to pay of your bad debts, such as high interest credit card balance, car loans, college loans, etc.

Even though the bank generally does not want you to use the money for real estate investing (because they think any investing is risky), but that’s the way to go.

I purchased my first rental property with a HELOC from my primary residence. And my rental property is making money for me while I’m sleeping, and the equity is of course growing every day like a healthy child.

Some banks may allow you to refinance your existing home mortgage into a HELOC. This is a rare strategy that not many people know of.

You can technically use the HELOC to pay off your mortgage in 5-7 years . I’m serious, no kidding…

Many local banks and federal credit unions offer very enticing introductory rates.

American Savings Bank offers 1% APR first year and 2% APR second year.

Bank of Hawaii offers 1.75% APR for the first 24 months or 2.75% APR for the first 36 months.

Central Pacific Bank offers 1% APR for 1 year OR 1.75% APR for 2 years OR 2.75% for 3 years.

Hawaii State Federal Credit Union offers 0.99% APR for first year OR 1.99% APR for 2 years OR 2.99% APR for 3 years OR 3.99% APR for 4 years OR 4.99% APR for 5 years.

Hawaii USA Federal Credit Union offers 0.75% APR for 1 year OR 1.75% APR for 2 years OR 4.25% APR for 3 years.


Homeowners’ Guide to Avoid Foreclosure at All Cost

Short Sale vs Foreclosure

Homeowners facing economic hardships may have a foreclosure looming, but are often too proud or uninformed to do anything about it, until its too late.  Before considering bankruptcy or allowing the bank to foreclose, consider a short sale.  

Unlike a short sale, foreclosures are initiated by lenders only. The lender moves against delinquent borrowers to force the sale of a home, hoping to make good on its initial investment of the mortgage.

Also, unlike most short sales, many foreclosures take place when the homeowner has abandoned the home. If the occupants have not yet left the home, they are evicted by the lender in the foreclosure process.

Once the lender has access to the home, it orders its own appraisal and proceeds with trying to sell the home. Foreclosures do not normally take as long to complete as a short sale, because the lender is concerned with liquidating the asset quickly. Foreclosed homes may also be auctioned off at a "trustee sale," where buyers bid on homes in a public process.

In most circumstances, homeowners who experience foreclosure need to wait a minimum of five years to purchase another home. The foreclosure is kept on a person's credit report for up to seven years.

Although there is no guarantee your lender will agree to a short sale, here is a list of the benefits of participating in a short sale, versus being foreclosed upon. 

Benefits Of A Short Sale Versus Foreclosure

• Homeowner can apply for a short sale even if they're not behind in payments.

• There in ZERO COST to the homeowner in short sale. The lender pays all the selling costs and real estate commission. Meaning the homeowner has nothing to lose!

• The homeowner receives professional guidance from real estate agent when doing a short sale.

• A short sale may postpone the foreclosure action to allow enough time for house to be sold.

• Homeowner may qualify for financial or relocation incentives from the lender, and receive up to $10,000 for relocation from a government program called HAFA which provides an option for homeowners transitioning out of their mortgage.

• A short sale only affects your credit score between 50-70 points vs 200-400 points with foreclosure.

• Homeowner may qualify for another mortgage loan as soon as 2 years, as compared to 7 years with a foreclosure.

• Doing a short sale avoids foreclosure and waives the full deficiency owed by the homeowner. They can now walk away from the property free and clear.

• Possible tax relief from cancellation of any debt income.

• Short sales are not likely to affect jobs that require a security clearance.

• It is easier to recover financially and emotionally from a short sale than a foreclosure.

If you plan to simply pack up, leave and “let the bank have the property”. This is the worst idea ever for the following reasons:

• If you leave the house, you will still owe the balance on the mortgage plus penalties and late fees (which in many cases is tens of thousands of dollars). This means that by law you are responsible for paying off this balance over the next 10 to 20 years for a property you no longer own!

• If you walk away from the house, the bank will still try to recover the money. They can legally do this by garnishing your future wages and investments!

• If you let the property go into foreclosure, your credit score can be affected up to 400 points. This means that it is going to be hard to find somewhere to rent (if they do credit checks). It is going to be hard to get another mortgage for a very long time with a foreclosure on your record. It is also going to be hard to get credit (in general) with a foreclosure on your record.

• Having a foreclosure on your record can also be a hindrance in getting a job, especially ones that require security clearance.

Read What is Short Sale?.


Short Sale vs Foreclosure

Make Money with Your (dream) Car

Make Money with Your Dream Car

Turn Your (Dream) Car into A Money-Making Asset

All we business- and money-savvy few knows that a car is NOT an asset, unlike what the banks like to tell everyone.

Our car is a liability that keeps the expenses going each year and keeps depreciating every second.

One of my goal for financial freedom is drive my dream car for FREE.

First of all I have not acquired my dream car yet. It would have been against all the "Millionaire Next Door" principles. I have to amess my wealth first.

So what does uber have to do with my financial goal of driving my dream car for FREE?

Let use my current car as an example. I drive a 2014 Prius II. Here's my breakdown of my monthly car expenses:

Car payment $350
Gas $40
City & County registration $25
Auto insurance $67
Safety check $3

Remember, you don't get to write off any of these expenses on you tax return if you're AN EMPLOYEE, and does not own any business.

Now with uber, you're using your beloved vehicle to generate income as a sole proprietor, which switch you to a business entity.

Say you make $900 a month with uber, you are now $415 richer after all your usual monthly auto expenses. This is what I mean by drive for FREE.

Now apply this same principle to your dream car. You got the idea?

This is not it yet. At the end of the year, you can deduct your auto expenses (prorated for the portion you use your car for your uber business).

In order to get your tax deduction for your auto expenses, remember to keep good mileage record. This will help you determine the percentages of your car that is used for business to generate income. Say you drove a total of 14,000 miles this year, and out of that you drove 7,000 miles making money with uber. In this case, you can deduct 50% of all your auto expenses, don't forget you can deduct your car washes too.

Turn you car into a money-making machine with Uber Honolulu.

If you love meeting people, driving uber is super fun...

If driving strangers around is not your thing...consider renting your car out when you're not using it.

Just like Airbnb and VBRO.com

You list your car and keep a calendar of when it's available. Then wait for some interested party, then you meet, you check their license, insurance, etc.

For a limited time, you can earn up to a $100 bonus by listing and renting out your car as a new host. Your bonus will be 25% of your earnings for trips you approve in the first 60 days, up to $100.

Check it out at turo.com

Same as with driving Uber, you can still write off vehicle expenses, such as auto insurance, car washes, gas, maintenance, etc.

Related article: Deducting Business Expenses

This is how the US government rewards people who make an effort to make a better life for themselves.

Turn Your Cash Flow from Negative to Positive


Cash flow is the difference between your income and expenses. When your income is greater than your expenses, you have a positive cash flow. If your expenses is greater than your income, you have a negative cash flow.

Knowing where your money is coming from is an important part of any financial strategy.

Where is Your Money Coming and Going?

Wealthy vs Middle Class Cash flow


Income can come from employment (earned income), investment (portfolio income) or from business or rental properties (passive income).

Expenses are any money you spend. But there are good expenses and bad expenses.

Good expenses helps you make more money, such as buying an Apple MacBook Air for my business. I use the computer to write articles and created graphics for my websites that generate income and clients. The money you make as a result of this good expense will pay for your good expenses.

Bad expenses are when you spend your money on things that generates no income in return, such as buying an expensive car just for show.


Assets are anything that generates "income" and increase your monthly cash-flow. Examples are businesses, stocks, bonds, mutual funds, cash value life insurance, real estate investments, rental properties, etc.

* Notice that savings and checking accounts are not listed, because they don’t generate income. Believe me…earning 0.01% on your $1 million sitting in your savings is not earning. Inflation averages 3% each year. Your $1 million is disappearing in front of your eyes if you let it sit in your bank account.

Liabilities are anything that generates "expenses" or creates “debt” and reduces your monthly cash flow. Examples are your primary residence, car, expensive watch collection, boat, yacht, country club membership, etc.

Sorry, your brand-new Mercedes Benz is not an asset even if it's worth $90,000. It is accruing expenses every month - auto insurance, gasoline, car wash, maintenance, etc.

Unless you use your car to generate income, such as driving for Uber or loaning it out on Turo.

If you become an Uber driver, and use your Mercedez Benz to take riders and generate an income, now your car is an asset.

The same is true for renting your car out via Turo.

In these cases, you can claim your car for business and deduct business expenses on your income tax.

Learn more at Turn Your Car into a Money-Making Asset with Uber

Same for your primary residence. It is a liability. You have monthly living and maintenance expenses - water, sewer, electricity, yard, etc.

You can turn your home into an asset too with house-hacking on airbnb.com with you extra room, or extra unit.


To turn your cash flow from negative to positive, first, you need to have focus and discipline, and support of your family.

First and foremost, cut your expenses.

Here are a few ideas on managing your expenses to help you achieve your financial goals:

Take a look at your budget’s top 10 or so monthly expenses, there are almost always at least one or two items that you could do without, that you’ll end up with more cash at the end of each month.

I have a friend who moved her whole family back to her husband’s family for 6 months, saving the rent for their down payment for a bigger house. Go from two cars to one car to get rid of one car payment, or down size to a smaller car. Cancel cable services, or switching to a cheaper phone service providers. By the end of the year, you’ll be at least several thousand dollar richer.

Now is the time to ditch those bad habits of yours.

If you smoke, that will be the number one habit to kick. First- and second-hand smoking cause harm to both the one who smokes, and the people around him/her. Not to mention to raising tax on smoking habits.

Instead of eating out at restaurants with friends, invite your friends over for dinner.

Stop drinking and buying soda or any sugary beverages and alcohol beverages. These only add to your medical bills in the future. Water is your best friend.

Stop spending money on bottled water either. The plastic bottle contributes to pollution, and erosion of your wallet. Install faucet mount water filter system or use your water filter in your refrigerator and refill your own bottle.

Create a budget and stick to it. A budget helps you compare your monthly income and expenses, and determining needs versus wants.

Live Within Your Means. This is a no brainer. If you spend everything you earn at the end of each month, you'll have nothing left to invest.

Keep a budget and plan for your finance. Be frugal. Buy only what you can afford and need. Don’t dress to impress your enemies.

You don’t need to wear expensive clothes or drive a Mercedes Benz to impress. You should impress others with who you are and your personality.

Remember, wealth is how much you accumulate in asset, not the doodads you accumulate.

Increase deductibles on your auto, homeowners and other insurance policies, which can help lower premiums

Pay off your mortgage as fast as you can, especially if you’re paying mortgage insurance. Mortgage insurance protects the mortgage lender, not you or your family.

As soon as you get your mortgage loan down to 80% of your home value, call your mortgage lender and have them remove the mortgage insurance.

Related: Pay Off Your Mortgage in 7 Years

Pay off your bad debts

Employ these strategies to increase your income.

Sell extra stuff you have sitting around in your house. Things that you have no use of anymore. Sell them on Craigslist or have a garage sale.

Rent out your spare room. Millions of home owners worldwide are now renting out rooms or floors of their current homes for short periods of time on sites like airbnb.com and VRBO.

Rent out your car. Sites like uber and turo allow you to rent out the extra seats in your car - or the whole vehicle, if you’re not too faint of heart!

Learn more at How to Make Money with Your (Dream) Car.

Use your skills and time. Got extra time still after selling your stuff? Leverage your earning power during your off-time, evenings and weekends with your professional skills or personal hobbies to bring in some extra cash. If you love doing crafts, you can sell creative items on Etsy.

You can sell fruits from your tree at local farmer’s market. In Hawaii, many houses have fruits trees in the yards. Do you have a special recipe that everyone enjoys? Sell that at local farmer’s markets.

You can also earn extra money with cooking, house cleaning, babysitting or dog walking. The opportunity is limitless. You can list your services on sites like TaskRabbit or Fiverr You can also sign up for Mechanical Turks at Amazon, where you can complete tiny miscellaneous task for a fee.

Starting a second career or a part-time opportunity to earn additional income.

Adjusting your W-2 allowances if you are expecting a tax refund, but consult with your tax advisor before making this change.

Now that you have all these extra cash flow. It’s time to invest and build wealth.

I have an active life and health insurance license and can provide a complimentary financial needs analysis as part of the standard consultation.

Therefore, you pay no commission or service fees to me at all.

So contact us today for a FREE no-obligation consultation.

Repair and Improve Your Credit Score

How to Increase Your Credit Score and Become a Better Candidate for Mortgage Approval

Your credit score is just one of the factors your mortgage lender will use to determine whether you qualify for financing. The problem is, every lender uses different methods to determine your credit worthiness. So, in some cases, a minimum score is difficult to determine for conventional loans.

1. Pay Down Your Credit Balance and Pay On Time. If possible, pay off the entire balance every month. Set up automatic payment with your bank to pay off the full balance automatically. Use no more than 30% of your credit limit. One of the biggest ingredients in a good credit score is simply month after month of on-time payments.

2. Gather up all credit cards on which you have only small balances and pay them off. Then select one or two cards that you can use for everything. Avoid store credit cards.

Related article: Best Debt Consolidation Strategies.

3. Leave old debt and good accounts (debt that you've handled well and paid as agreed) on as long as possible This is also a good reason not to close old accounts where you've had a solid repayment record.

4. Shop for mortgage rates all at once. Too many credit applications can lower your score, but multiple inquiries from the same type of lenders are counted as one inquiry if submitted over a short period of time.

Related article: What is Annual Percentage Rate (APR)?

5. Don’t open new credit card accounts before applying for a mortgage. Too much available credit can lower your score.

6. Do not do anything that could indicate current or future money stress, such as missing payments and suddenly paying less (or charging more) than you normally do, taking out cash advances, or charging at a pawnshop or divorce attorney.

7. Correct any errors in your credit report. Mistakes happen, and you could be paying for someone else’s poor financial management. It is recommended that you check your credit report every 6 months to ensure all information is correct, and that no one has stolen your identity.

Get your free credit scores, credit report card, and enroll in free credit monitoring at CreditKarma.com

Related article: Mortgage Basics

Pay Off Your Bad Debts with the Best Debt Consolidation Strategies

Pay off Your Bad Debt with the Best Debt Consolidation Strategy

Do you have student loans? Car loans? Mortgages? Credit card debts? Are you having trouble paying off your debts? Are you stressed out by all the debts you have?

33% or 77 millions of American don’t pay their bills on time and 39% carry credit card debt from month to month.

We live in the wealthiest country in the world, but we always have money problems.

Having debts in your life is not fun. It’s fun at the moment when you make your purchase. It’s human nature to purchase for emotional reason, then try to justify our purchase with logic later.

Debt is like a tumor. If you don’t do anything to stop it and continue to feed it with more spending, it grows rapidly. Even if you leave it a lot, it continues to grow.

The magic of compound interest that works wonders for us growing our money also works wonders for the banks and lenders, when it’s their money, and we’re paying for it.

Debt becomes a way of life. Consumer debts is one of the biggest obstacles to achieving financial freedom and retiring rich.

It’s important to have a strategy to get rid of all your debts in life and start building a solid financial foundation.

Here’s the best debt consolidation strategy:

“What do you do when you find yourself in a hole? Stop digging!”

The very first thing to do is to set your mind to be debt-free, and stopping spending. Write “Want or Need?” in a piece of paper and put that piece of paper in your wallet. Every time you’re about to spend money, ask yourself if this is a need or want.

Buy only what you need.

2. Consolidate your credit card and consumer debts with a low interest line of credit

Revolving high-interest credit card debt is one of the worst types of debt because it can quickly grow into an unhealthy financial situation. Let’s look at an example of the true cost of using a credit card.

Credit card minimal payment

In the above scenario, you end up paying $6,173 in interest, which is $1,623.29 more than the original credit card balance. However, if you commit to paying slightly more each month, you can pay off the card’s balance in half the time and pay much less, only $2,574, in interest.

Paying Extra Each Month

These examples show why it’s important to strive to pay off credit card and high-interest loan debt sooner rather than later.

• Itemize all your outstanding credit card debt or loans from the highest to the lowest interest rate, and list the monthly payments for each.

• Pay more than the minimum – as much as possible within your budget
– on the credit card/loan with the highest interest rate. Once you pay off that credit card/loan, begin paying off the next highest interest rate credit card/loan.

• Consider transferring credit card/loan balances to a card with a low interest rate that is offering a promotional, no fee transfer option. Or, for an account that is charging more than 14 percent interest, call the credit issuer to ask for a lower rate, such as 11 percent.

There are many companies out there that offer debt consolidation loan. However, many of them still charge high interest.

A better option is a line of credit from your local banks or credit unions. Credit unions usually have more competitive rates and easier qualification requirements than bigger national banks.

If you qualify for a personal line of credit, you can use this line of credit, which acts like a credit card, to pay off your high interest-rate debt faster.

If you are a homeowner, you can also consider taking out a low-interest home equity line of credit to pay off your debt. Although the home equity line of credit is still debt, the interest accrued is usually tax-deductible. As always, check with your CPA to be sure.

Plus, you'll always have an emergency fund available.

A line of credit allows you to take out only what you need. You don’t have to take the full line of credit out like a loan.

Another benefit of a line of credit over conventional loan is the interest accumulation. In a conventional LOAN, such as mortgage, car loan, personal loans, interest is calculated by amortization. Your payment is the same every month for the duration of the loan, but you’ll be paying more interest in the beginning, which means you’ll pay off your loan slowly.

On the other hand, interest on any line of credit is calculated as simple interest, which means you only pay interest on just the portion of the loan that you borrow. And interest is calculated on a daily basis. So if you use your line of credit like your checking account - putting your income into the line to bring down the balance, you'll pay less interest. Because it is a line, you have to flexibility to use the credit each month, as long as responsibility is exercised.

A friend of mine paid off $8,000 debt in just one month with his $12,000 personal line of credit. He uses the money from the line of credit to pay off his outstanding personal loan, which is the $9,000. Then he just keep attacking his line of credit balance with his cash flow.

When he is putting his monthly income into the personal line of credit, that deposit is considered his payment, which is obviously greater that the minimal payment. So that helps to improve his credit score.

3. Pay off your mortgage in 7 years with a home equity line of credit.

If you have a mortgage, try to pay it off as quickly as you can by paying additional principal each month. Don’t refinance, even if the rate is better.

When you refinance, you’ll repeat all the escrow, appraisal and closing costs. Besides, refinancing means you re-start your 30-year all over again, which means you’ll be paying mostly interest, which does not help you pay off your mortgage.

4. Make more money by starting a side gig or business

Now we have a few strategies in place, we need to look into making more money to help speed up your debt elimination process.

Think about it. You got into this position in the very beginning because you’re spending money that you don’t have. So it makes sense to find ways to make up this money and get yourself out of debt.

Being an uber driver is one of the easiest way to make money right away. You just need to have a functional 4-door car with all legal license, insurance and inspection, etc. Download the apps, register and you’re good to go. You get paid once a week. You can easily get $20 an hour taking people to their destinations and meeting new people.

You can also join the cause in revolutionizing the financial industry. You’ll earn while you learn financial concepts and help families like yours become financially independent. Pay is handsome.

Debt consolidation does not need to be complicated. It requires discipline and determination. Retire your credit cards and focus on making money.

Related article: How to Make Money Work for You