It was an inspiring post on social media that many adults would probably say, “If only I’d known at a younger age” that makes Josh McPherson ‘The Big Five’ guest this week. His insight is a great lesson for the up-and-coming generation. His original post is below in red for a frame of reference, and we hope it will inspire you to share this good advice with the next generation in your life too.
Tell readers a bit about yourself and what you do professionally.
Hi! My name is Josh, the Florida Mortgage Dude. I am a Senior Mortgage Loan Officer at American Home Mortgage in Flagler Beach, Florida. We are a true local business in Flagler County and my primary focus is securing financing for homeowners. I work with people buying their first homes, dream homes, second homes or even help with refinancing. No matter what the loan program ,or type, I give all loan files my complete attention to detail to close on time.
How has your professional experience helped you as a young professional strategically set goals for you and your family personally?
When I first stepped into this industry, I had no idea how in depth your personal finances can go. I always thought that as long as you paid your bills on time and saved some money every month you would be ok. That could not be farther from the truth. There is so much that goes into preparing for you financial future and I have found the younger you are, the less aggressive you have to be to take advantage of compounding interest in retirement investments. I have reviewed so many loan files with older clients who did not prepare for their future and rely on social security income alone to live. Seeing this firsthand has motivated me to be more focused on our financial future to ensure that my wife and I can enjoy our retirement rather than stress about it. I want my future self to look back at this time in my life and be proud of the financial decisions I made rather than wish I made more financial sacrifices.
You recently posted some pretty impressive benchmarks for a person of any age. How have you been able to achieve these goals?
I recently published a success post on social media providing my friends, family and clients with a personal testimonial about me becoming a student of my craft and showing that it does work. For years I have been discussing credit and financial strategy but behind the scenes I have been putting those same strategies into action. This has increased my FICO from the low 700s into the 800s within a matter a couple of years. I didn’t realize how difficult it was to get into the 800s until I made it a goal to reach this. Funny enough, I when my personal credit was pulled for my recent refinance, I was thinking my credit score would be around 780 but it actually came in at 806! I was blown away. I could not believe the report I was reading through. All over those years of putting my own practices into action finally paid off and I unknowingly reached a goal.
Were there any pitfalls you had to learn from along the way?
Absolutely! When it comes to finances there are so many pitfalls you could face. Some are within your control, and some are not. There was a time after I started working towards an 800 credit score where I over extended my credit and had too many liabilities. I had 3 installment loans and 2 credit cards that were carrying a high balance. Once I realized this I started to make changes. We had a camper that was financed, and I sold it. My credit card balances were high which started bringing my credit score down, so I paid them off. I had a 2018 Silverado that was financed and, thanks to the chip shortage, I sold that for more than what I bought it for and purchased a used vehicle cash with the remaining equity. I feel fortunate that I have not had any major financial setbacks along the way like a bankruptcy, foreclosure or any outstanding balances go into collections. Once you start watching your credit you can see exactly what is affecting it either positively or negatively. I would say the most important lesson I learned along the way is to monitor your credit so you know exactly what’s going on.
High school graduates and young adults don’t often get advice or training on how to accomplish what you’ve listed. What are the steps they should be taking early on to achieve success?
I think it’s sad that a real-world financial class has not been implemented in schools. This can really help change a lot of people’s lives but instead we have to learn the hard way or learn through our family and friends. Those who do not have individuals in their network with strong financial experience will more than likely get a late start. My advice for your adults is listed below:
- Start savings your money now to purchase a home. Renting a home is paying for somebody else’s investment. Let’s say you rent a home for 2 years at $1,500 a month, that’s $36,000 over 2 years with no opportunity to get any of that money back but if you owned that home you could potentially make that back or more.
- Pay your bills on time. This should go without saying but I have seen so many clients with late pays. This is essential for a good credit rating.
- Implement a credit card strategy. Put your normal monthly expenses on your credit card and pay that balance off in full every month. The golden ratio for a credit card balance is 30% of the max credit limit. Try not to exceeds this.
- Don’t keep up with the Jones’. Nobody really cares what kind of car your drive, how nice your furniture is or how expensive your clothes are. It took me some time to realize this. When we’re looking at a big purchase, depending on what it is, the first place I check is Facebook marketplace or eBay. There are deals to be had on just about anything you need there with a substantial savings.
- Start investing in your retirement NOW. Compounding interest on investments pays big on the back end. Consult with a financial advisor on the best investment accounts to open and stick to the plan.
There’s so much that goes into your personal finances and everybody’s situation and goals are different. All of this advice is based on what I have seen work for me and what I think achieving financial success is. At the end of the day you have to make the decision on what the best path is for you and your family.
Josh McPherson’s Inspiring Social Media Post:
– We just refi’d to a 15 yr at an absurdly low rate and are on a 10yr payoff plan without skimping on our retirement investments.
– I sold my new truck to buy an older (and cooler) truck cash so I don’t have a truck payment.
– I pay off my credit card balance in full every month so I’m not carrying that monthly debt
– I have one personal loan that I don’t want to payoff in full since it gives me a positive credit payment history and keeps my FICO in the 800s.
I’ve been a student of finances since day 1 of getting my Mortgage Loan Originator License and I have put to practice what I preach to my clients. I am a firm believer in leading by example and I want my referral partners, clients and future clients to know that not only do I know how to close your loan but I can show you how to get an 800 credit score and live a financially balanced life.