Personal Update: Debt Free

Credit? Cut it out

Today was the day I decided that I had to cut up and get rid of my credit card. It was a liberating moment in my financial life. Though cutting the card did not rid me of my debt, it does ensure that I will not create any new debt.

Too many of us have been fooled into thinking that credit is the new cash or even that it is better than cash. Under the presumptions that you have the money to pay off your temporary debt, you are establishing good credit which could later be used to buy a home etc. While it is true that having good credit is a great thing, the facts is, most of us don’t have the discipline required to use credit properly. Instead we use the credit exactly the way the banks intended, by paying as little as possible for much longer than necessary. I would loan someone $100 if I knew I could get them to pay me $118 back, hell banks do that all the time… in fact they “Bank” on that.

The reason we like loans and credit is because we can get what we want now and pay for it later… The problem is you REALLY pay for it LATER. Lets do some simple math…

Joe wants to buy a new car for $15,000 on credit (finance). Dealer Ted sells Joe the car on a 48 month plan with 9% interest, and 0 cash down. With taxes and fees included the purchase price is 16,090. Joe agrees to the 48 month deal paying $400 a month, because he can afford $400 a month but he cant afford $15,000. Well, 48 months go by and Joe makes every payment on time. Very happy he brags to me about his purchase and all I do is face-palm. 

I say to Joe,  ”do you realize that you spent $19,200 on a $15,000 car?”. I follow that up with, “on top of that… lets say the bank behind your auto purchase put your payments into a savings account (assuming a 2% interest rate that compounds 4 times a year). At the end of your loan payment, they will have $20,036.76 give or take. That’s a $5,036 profit (assuming they sold the car at cost $15,000) which we know isn’t true.

Joe began to get upset and his face grew red as he explained to me “Well at least I own the car now, I didn’t have a car and now I do. I was able to afford the monthly payments so I am happy. I told Joe “Congratulations man, you paid $19,200 and were finally given the title to a car now worth $7,500. I bet if you had 12,000 in cash when you went to see Dealer Joe, you could have purchased the same car out right and kept a potential $7,200“. Joe slammed his fist down on the table and left me at the restaurant to pay both our bills.

You see Joe didn’t understand how he was really spending his money long term. He was blinded by the possibility that credit opened up for him. I too was once Joe. I purchased car rims on credit, I financed my first car. Now with all of the studying I have been doing on finance and economics, the last thing I want to have is debt of any kind. The moral of this story is, do you best to decrease debt (liabilities) and increase income (assets). Also do yourself a favor and don’t buy a brand new car. If you want a new car, get a used car that is a year or two old, after it has already had its most significant depreciation in value, that’s what most millionaires do anyway.

Book Review: Eat Mor Chikin

By S. Truett Cathy

Eat Mor Chikin

This wonderful and inspiring book is the story of S. Truett Cathy’s life as he started and built up the fast food franchise known as Chic-fil-A. I wanted to read this book primarily because it was the story behind a company that was completely service driven. Their business model was based on customer loyalty and not customer manipulation. Reading the book made me want to tip my hat to Cathy, each chapter takes you a bit deeper into the man behind the chicken.

Cathy has over 100 foster children and he loves and supports them all. Do I see a reality show, Cathy and Jeanette plus 103. His love for life, and appreciation for honesty and integrity show through each chapter of the writing. This man puts God first in everything and has seen much success. Not often do you see such a publicly known for profit company with so much of its business model based on servitude for the Lord. Commendable if you ask me.

Eat Mor Chikin, will help you think about giving back. You will often put your decisions against his and realize areas in your life where you can offer more help or any help to those around you. I think this book is a good read for anyone let alone people who are interested in business and the Chic-fil-A history. S. Truett Cathy is an inspiring entrepreneur who we should all try to be a little more like. On another note though, I was expecting to read a bit more about the business. I wasn’t turned off when reading about the foster care, and the evangelical acts and random kindness that Cathy wrote about, I just was looking for more… meat. Good book though, I’ll keep this one around.

Rated 4 out of 5

This Game Will Teach You to Get Out of Debt!

Rich Game Poor People

For those of you who dont know Robert Kiyosaki, he is the author of the acclaimed Rich Dad Poor Dad and many other related books that teach you about personal and business finance. Before I continue, the books are great you should really pick up Rich Dad Poor Dad for starters. I will have a review of it soon actually. But lets talk about his game Cashflow.

Cashflow is a game that is targeted at the same audience as his books, people who are broke who want to learn how to be rich. Cashflow isnt going to tell you step by step what to buy, it teaches how to by, the theory behind personal finance. Robert has seemingly made it is lifes work to help people get out of debt. I commend his intentions and appreciate the knowledge that he shares with the world. It feels good to know that someone isnt trying to just profit off of the get rich quick mentality and is actually doing things to help the lower and middle class. So if you are broke, and want to understand why you are not rich, and you want to learn how you too can become a multi millionaire and retire without worry, you should buy Cashflow…. FOR $195.00

New iPhone Game: Popple

Popple - My first published game design.

So it may be a shock to a lot of you but in my free time… I am secretly a video game developer. Ever since I was young I wanted to make video games and it’s a dream come true to be doing so now. I work at GoPlay Games, an independent iPhone game developer in Irvine, CA. Our first game Popple was just released to the iTunes App Store and we racked in 4 sales in our first 3 hours!

What’s special about Popple is that it is MY first published game. Prior to GoPlay I was working at Obsidian Entertainment on a project that wasn’t released therefore making Popple the first title applicable to my resume!

iPhone game companies are sprouting up all over in hopes of cashing in on a one hit mega wonder of a game. We at GoPlay are just trying to get noticed and build up a fan base with our games. Prosperity will come but not without loyal and repeat customers.

I would love to rate my own game, but obviously the integrity of this blog would be tarnished forever! I feel bad enough as it is just advertising it but hey, it’s part of my life, and GoPlay is my business. So with that said, if you have an iPhone and you like games like Tetris or Simon Says, I suggest you check out the game. If you do happen to buy the game please feel free to email me and let me know what you think.

Book Review: Start Small Finish Big

Start Small Finish Big

Start Small Finish Big – Fifteen key lessons to start and run your own successful business

By: Fred DeLuca

I just finished reading this inspiring book which was a page turner from cover to cover. This book has fifteen lessons that any new or soon to be small business owner should know. With each lesson presented, Fred also does a great job of either tying in his personal experience or the experiences of other former (and now famous) small business owners. For those of you who don’t know, Fred DeLuca is the cofounder of Subway. He brings you the essential guidelines for a business owner in 311 pages.

I was initially attracted to the book just by the title. Start Small, Finish Big. Every small business owner should wish to achieve that sort of success and I was no different. It wasn’t so much a how to start small and finish big tutorial for business. It was mostly a collection of proven practices that have helped many other small business owners that if you do follow or adhere to the same mindset, you yourself might see similar success. I can tell you that this collection of writing has improved my mindset and optomisim about running my business. You will see examples of some quite famous companies that started from a simple idea and some without a real plan, that evolved over time into a few of the most familiar brands that we recognize such as Kinko’s, Little Caesars and of course Subway.

I think this book is great for anyone who is a new or potential small business owner, these are valuable lessons that you cant afford to ignore. It was a pleasure to read and I might even hold on to it for a re-read somewhere in the future.

Rated 4 out of 5

The beauty of networking

If you want to be in the video game industry you must learn how to network. A lot of people think networking is building a portfolio of business cards that you acquire at trade shows, full of people who have already forgotten you. A useful network is a grouping of people of which you have established a good relationship with who can in some way provide something beneficial to you. You also have to understand that in order to build or maintain a good network you have to invest time and sometimes money. I don’t mean pay people off but I do mean, share. If you want your network to do something for you, I say you have to do 10 times more for it and the people in it.

10 times more? That is exactly right. If you help only one person, there may come a day where you may need that person’s help. The problem is they may not be home that day.

Reach Out: Keep in good touch with the people in your network as often as possible even if you are just saying hello, I hope everything is well.

Shake Hands Make Friends: I like to meet people thinking first, would like to get to know this person? and not what can this person do for me? I can’t begin to tell you how much I hate brown nosers, kiss asses and moochers. Most people help the people they want to help, if there is no reason to help you, no emotional tie to you then what is the incentive for them to use their resources to provide for you?

Be a Resource: People say its not what you know but who you know… Now I cant say that knowing people isn’t a great deal important, but it is not everything! I can guarantee that the coolest guy in the world will get fired if he cant perform. So be a resource. If you are an artist be an amazing artist. If you program, be a phenomenal programmer. If you can become a resource, people will come to YOU to add YOU to their network, thereby expanding yours.

Now to tie all of these points into a story to prove their worth…

I said earlier that I started an iPhone development project and am currently working on getting my business license so that I can sell my game on the iTunes store. Well at first I wanted to do everything on my own. I began programming again, I designed a game, I even created art and sound. 4 months later all I had was temp art, sound and some basic know how for making apple applications… no game. I did however know that if I could get a programmer to help me, and get an artist to create work, all i would have to do is manage the project and I could get 4 or 5 games out a year instead of 1 (if that, at the rate  I was going). So I began networking.

I attended a social event for Game Developers in SoCal called Beer Wednesdays (at the Auld Dubliner in Tustin @ 6:30) and started talking about my idea with anyone who would listen. On the Monday of that week I had no programmer, by friday I had 5 potential candidates all because I opened my big mouth and talked. I chose to begin working with a programmer who had experience in iPhone development already and was willing to get paid post release. One week after he agreed to work, he sent me a video of my game at alpha being played. After building a good relationship with said programmer he explained that he has contacts that will help our game get attention. One of my bosses at work told me that he also knows of ways that I can increase my likelihood of success with the iTunes store. I went to lunch with an artist friend of mine who said he would also love to help make games with me for free just because. And by the way, his brother is a lawyer… who I will soon meet with to get my business license, trademark my logo and product…

ALL BECAUSE I MAINTAIN A GOOD NETWORK.

We all have heard the phrase “It’s not what you know but who you know”. Had I not known Jim Rivers and established a great relationship with him, I bet I would be unemployed right now.