THE 209 BEAT

Welcome to the 209 Beat! I’m Mike Kistner, a real estate agent and real estate investor. I also work at a refinery in the Bay Area planning and scheduling turn around projects. In short, I’m trying to find balance between my pursuit for Financial Independence Retire Early (FIRE) and making sure I’m taking advantage of all the great wine tasting that the 209 area provides.

Here’s why I wanted to start The 209 Beat, what this site is not, what you can expect, and a little bit about myself.

Why The 209 Beat?

There are two goals for the 209 Beat:

1. To provide insight in the local market and

2. to help others get their financial situation on track.

Moving is stressful. Whether you’ve lived in the same area your whole life or you’re moving to a new location it’s never the same experience for anyone. My hope is that by providing local market updates and personal reviews of businesses and events you’ll feel more comfortable with your move.

The other reason I wanted to start The 209 Beat is because more and more people are working two to three jobs. They do this either out of necessity or as side hustles to reach FIRE more quickly.

My hope is to provide encouragement and another perspective to people in both situations.

What This Blog is Not.

This is not a frugal FIRE blog. There are a lot of great ones out there, but this is not one of them. I for one am not that frugal. I believe in making big money wins, so I can enjoy a $5 coffee when I feel like it.

I will not give you a blueprint to FIRE. Personal finance is just that, personal, and what may work for one person may not work for another. That’s why I’ll never say you must follow strict rules to become financially independent.

Lastly, this blog is not built for grammar police or those sensitive to strong language. Consider yourself warned!

What You Can Expect.

Local readers can expect market updates and personal reviews of businesses, local wine, and events in the 209 area. I may also sprinkle in interviews with local business owners and posts on relevant topics that pertain to the 209 area.

For readers everywhere, you can expect a mix of general financial basics and posts specific to my pursuit to FIRE, the strategies I've used, the successes I've had, and more importantly the failures.

Lastly, with the hope of reaching a wide range audience, I may sprinkle in guest posts and interviews with subject matter experts of various topics. 

Now Let Me Introduce Myself.

I'm 30 years old and live in Lodi, California. With over 85 wineries and Napa only 60 miles away, it's a safe bet I'm exploring a new winery when I'm not working. With that said, I'm rarely not working.

If I'm not planning and scheduling turnarounds at a refinery in the Bay Area, I'm either helping others with their real estate needs, looking for my next investment property, or working on a side hustle. My life usually feels like an elaborate juggling act.

Outside of wine tasting some of my other passions include: backpacking, traveling, and all things real estate. 

I hold quarterly real estate meetups in Lodi and am looking to expand it in 2020.

Enjoy! 

I look forward to building connections and hope you enjoy The 209 Beat!

Cheers,

Mike Kistner

 

Oct. 4, 2019

What is a FICO Score and Why Should I Care?

How do you know if someone is good with money? You could ask ten people and get ten different answers. However, if you ask a group of lenders how they know that someone is good with money, you’re likely to get a single answer: a credit score. More specifically, lenders often look at someone's FICO score. Because approximately 90% of top lenders look at FICO scores, it is worth getting to know your FICO score better. 

What is a FICO score?

Created by the Fair Isaac Corporation in 1989, FICO is a credit scoring model. There are actually several different scoring models that exist. FICO remains one of the most popular.

 

Because not every credit scoring model works the same way or uses reports from the same credit bureau, scores can vary somewhat. However, it’s still worth knowing your FICO score, especially since it’s so easy to get.

How do I get my FICO score?

If you have a credit card, there’s a good chance that you’ve heard of a FICO feature on your card. Many credit card companies, such as Discover, Citibank, and American Express, now allow you to monitor your FICO score for free. This is also true for some major banks, including Ally Bank.

 

That means the easiest way to get your FICO score might be right under your fingertips. The next time you log onto your banking dashboard or open your banking app, do a search for FICO. If you don’t find your FICO score there, you might also check with your auto lender or mortgage provider. The most important thing to remember is that there should not be any fees associated with getting your FICO score. 

 

You can also explore Discover, whether you are a customer or not. Discover offers a free tool called a Credit Scorecard. Your FICO score is included in the Discover Credit Scorecard. So if you can’t access your FICO score elsewhere, this program is definitely something to look into.

What does a FICO score mean?

Your FICO score is a number in a range that helps lenders predict how you will use credit. The numbers span 300-850. The higher your FICO score, the better. In short, a high score means that lenders look at you as a more reputable borrower.

 

The FICO scoring model uses five different categories to rank individuals. 

 

  • Poor: 579 and below

  • Fair: 580 to 669

  • Good: 670 to 739

  • Very good: 740 to 799

  • Exceptional: 800+ 

 

In order to have a better sense of which category you are likely to fall into, it is important to understand how your FICO score is calculated. 

How is my FICO score calculated?

It is worth noting that FICO scores can vary a bit depending on who pulls the report. That means that if you use your bank to access your score, that number might vary slightly to what a lender sees. However, all FICO scores are calculated using the same factors. 

 

These are the factors that impact your FICO score:

Payment history (35%)

Your payment history refers to how you pay your bills over time. Do you pay your bills in full? Do you pay them on time? How you pay your debt accounts for the largest chunk of your score. That means if you’re looking to boost your FICO score, making on-time payments is the best strategy.

Outstanding debt (30%)

Lenders are interested in how much money you already owe. They also look at your credit utilization ratio. That’s a complicated term for a simple concept. Lenders want to know how much credit you have available in total. They then compare your slice of debt to the whole pie.

Length of credit history (15%)

Another component of your FICO score addresses how long you’ve had credit. A long history of repaying debt means you seem more trustworthy to lenders. To calculate the length of your credit history, lenders look at two things: 

  • The age of your oldest account, and 

  • The average age of all of your accounts.

New credit (10%)

Though this is a much smaller part of your FICO score, new credit still matters. Lenders look at how many new accounts you’ve opened recently. New credit is perceived as riskier than older credit. Therefore, if you are opening a bunch of accounts at once, you could see a dip in your FICO score.

Credit mix (10%)

The final factor in your FICO score is your credit mix. Lenders want to know if you are able to manage a variety of types of credit. That means they look at retail accounts, credit cards, car loans, and mortgages, among other things. 

How can I improve my FICO score?

There is no magic fix for your FICO score. Remember that a FICO score is intended to be an indicator of your trustworthiness with credit. That means that you need to continually make sound financial decisions. 

 

Here are six things you should concentrate on to improve and maintain your score:

 

  1. Pay down your debts.

  2. Pay your credit card bills on time every month.

  3. Request an increase in your lines of credit (but don’t utilize it). 

  4. Open new accounts sparingly. 

  5. Keep your oldest account open.

 

It is also worth noting that you can keep an account open without using it frequently. To keep the account open, make a small purchase periodically and pay it off right away. 

 

The key to improving any score is to continue to use debt wisely. 

Why does a FICO score matter?

A FICO score matters because of the things that it helps you access. While many people may prefer to pay in cash and pay in full (for good reason!), there are going to be times when that isn’t an option. Those are the instances when it pays to have a good credit score. Credit scores can impact everything from your mortgage rate to your car insurance premiums. Keeping your credit score healthy is a smart money move. 

 

Keep in mind that credit scores, including FICO scores, are going to fluctuate a bit. Even if you have exceptional credit, you can expect your numbers to rise and fall a few points every month. There’s nothing to be alarmed about.

Final Thoughts on FICO Scores

There is no single way to measure a person’s wealth or assess a person’s money sense. However, lenders do take your credit score seriously. They view it as a predictor of the likelihood of you paying off your debts and using credit responsibly. Since your FICO score can impact everything from loan rates to insurance premiums, it makes sense to get to know your FICO score and keep it as healthy as possible.

 

Cheers,

Mike Kistner 




Posted in FIRE, Real Estate
Aug. 27, 2019

Getting Going with the FIRE Basics

The FIRE movement is growing and for good reason. More and more people are realizing that their careers do not have to define their lives. In fact, they are looking for ways to achieve financial freedom and possibly leave the workforce altogether years or even decades before the traditional retirement age. That is a stark comparison to 48% of Americans who are 55 or older who have no money saved for traditional retirement.

If this financial freedom sounds interesting to you, here are the basics of the FIRE movement and the first steps you can take to get started.

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Posted in FIRE
Aug. 27, 2019

FIRE Math: Exploring the 4% Rule

Retiring early seems complicated. But is it really? The psychological and emotional aspects definitely present considerable challenges, but the math behind early retirement may not be as complex as it first seems. Consider this a primer on FIRE math, including the famous 4% Rule and how to run these numbers for yourself.

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Posted in FIRE
Aug. 27, 2019

What is a Roth & Why Do I Need One?

You don’t want to work forever. In fact, if you read this blog, there’s a good chance that you are planning on leaving traditional work behind earlier than most Americans. That means you’re on board with the idea of not just retiring, but retiring well. Opening a Roth IRA is an easy and essential way to do just that.

Here’s the basics of what you need to know about Roth IRA accounts and why you probably want to start contributing to one right away.

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Posted in FIRE