Day 3: Rocky Mountain High

Today’s day was spent enjoying the sights on the train as we traveled across Utah and through the Rocky Mountains to Denver. We were joined by Ally Seeley who works for Something Independent .This is a Denver-based organization that helps shed light on start-ups and connects individuals with other resources in the area.

I also sat down and surveyed participants on the train regarding my project today. These individuals were college graduates or working towards their doctorate in their respective field. It was surprising to find out from them that they were very in touch with their finances in regards to student loans, credit cards, and credit scores. This got me thinking about the students I talked to yesterday and how much of a stark contrast the two sets of conversations were. It is an interesting thought that we are labeled as being millennials yet there is this huge difference between knowledge of finances due to age. I am hoping to go to the University of Denver and Colorado State University to talk with more students to get even more of an understanding.

This evening we were fortunate enough to receive free tickets to go see the Colorado Rockies play the Pittsburgh Pirates at Coor’s Light Field. These tickets were given to us as a donation from the Colorado Rockies so a huge thank you and shout out goes to them!

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Day 2: In Transit

I really should just learn to go with the flow. Thursday night was supposed to be spent on the train in the Oakland rail yards since our luggage was sent there from our hotels. We were informed at 10 PM, however, that the rail authorities were not going to let us stay in the cars for security reasons. To remedy the situation we were put up in hostels across the Golden Gate Bridge only equipped with toothbrushes and toothpaste.

Today was filled with fewer hiccups as we finally made it onto the train. We are put in 3 converted train cars from the 1940’s-50’s. Two of the cars are sleeper cars and the other serves as a kitchen/observation car. We spent the morning listening to Eric Kessler, a former advisor under the Clinton administration and founder of Arrabella Advisors, spoke to us about what his company looks for in individuals who are seeking philanthropic funds. His biggest message I took away was that the biggest investment anyone can make is in themselves. If you don’t believe in your own idea and live it and breathe it every day there is no way that it will succeed to its fullest capabilities.

This afternoon we heard from Mike Zuckerman, the founder of [freespace] which was the hub we used last night. He shared with us he journey from working with Yahoo to becoming a civic hacking leader and create a space where individuals can come together and create a collaborative and innovative working space.

Traveling through the Sierra Nevada Mountains with this group of very talented and motivated individuals has been quite the humbling experience. I have learned a lot from the others on this trip and have had the great pleasure of getting to know them individually. A lot of participants have expressed interest in having me teach a little financial 101 seminar so I will be doing that in the coming days. We will be having a free day on the train tomorrow to enjoy the ride through the Rocky Mountains and will be arriving in Denver tomorrow evening for a Colorado Rockies baseball game!Image

Day 1: San Francisco-UC Berkeley

This morning was the official kickoff of the Millennial Trains Project in San Francisco. We started off with an Idea Morning  session hosted by participant Jason D’Mello where there was free coffee and had guest speakers Elizabeth Gore, resident entrepreneur from the United Nations Foundation, and billionaire serial entrepreneur Karman Elahian talk about their work in entrepreneurship. One important lesson that I took away from Karman Elahian’s speech was the notion of celebrating failures and that success is only the management of your failures. We then had a 90-minute purpose-based leadership seminar hosted by Dr. Max Klau. He explained how our journey on the Millennial Train Project will change our outer world that we live, but also our inner worlds as well. We were also challenged to create our own personal mission statement, a statement that goes beyond the realm of our everyday tasks in a 9-5 work period and resonates with who we are as individuals.

Today I was able to begin gathering information from students about their personal finances. I traveled out of our hub and outward to the University of California- Berkeley where I surveyed students about their knowledge of personal finances. Overall I was impressed how willingly students were to have me come up to them and talk to them about this issue. I gathered basic information from students about their knowledge and familiarity of student loans, credit cards, credit score, and basic budgeting. I was surprised to find that most students knew the different types of student loans they had. I even ran into two students who mentioned they have already started saving for retirement…wow!

One student I interviewed that particularly stood out was a woman named Tatiana, a junior at UC-Berkeley who is from Arkansas. When I asked about her thoughts of financial literacy she opened up to me and said that it is not something her parents stress on her and that they would rather have her focus on her education first. She explained to me that her parents come from Russia and that culturally it is more important for her to focus on education and have her parents guide her with her personal finances while in school. All of the students I spoke with agreed that financial literacy is something that should be taught by schools and heavily promoted by financial institutions.

Tonight we will be enjoying a dinner at our hub location and finally moving onto our train! More updates will be coming along the way and you can follow me on Twitter @SeanKolodziej to see what I’m up to throughout the day. Tomorrow we will be in transit all day and arriving in Denver in the evening. I’m looking forward to sleeping in and being able to enjoy the landscape of the Rocky Mountains, as well as the company of the 23 other participants on this journey. Image

How’s Your FICO Doing?

We’ve all heard about how important your credit score is when it comes to purchasing a new home or applying for a credit card, but the reality is that, according to the Huffington Post, nearly 50% of Americans don’t know what their credit score is. In this blog I will break down the components of your FICO score and give you some pointers about managing your score.

Your FICO score is the most common type of credit score that lenders use. In essence, it is a number that determines a financial institution’s risk for lending money to you that ranges from 300-850 (the higher the score the better). Don’t feel intimidated by what FICO means either; it just stands for the Fair Isaac Corporation which is the company that produces the method for credit bureaus to create FICO scores. As aforementioned your FICO score is used to determine your likeliness to receive a mortgage or auto loan, but did you know it can also be used in determining whether or not you get hired at a company?

There are 3 credit reporting agencies who report FICO scores: TransUnion, Experian, and Equifax. Each credit reporting agency reports different information so not all 3 scores will be the same. The breakdown of your score looks something like this:

  • 35% Payment History
  • 30% Amount Owed
  • 15% Length of Credit History
  • 10% New Credit
  • 10% Types of Credit Used

From this there are a few things you can do to help your credit score so you can get the best interest rate possible when financing your home. The first tip I have is to check your credit score annually. By law, you are allowed one time to check your credit report for free from each of the credit bureaus but you have to pay to obtain your credit score. You can visit annualcreditreport.com to do so. Don’t check your score on your own more than once though, it can actually hurt your credit score by doing so!

The second tip I have is to reduce the amount of debt that you owe. This means limit the use of your credit card to only larger and planned expenses that you can pay off right away. Have you have multiple outstanding loans or credits in your name, use your credit report and begin budgeting to erase those negative balances.

The third tip I have is to make payments towards loans or credits cards in full AND on time. Typically you will have 25 days from when your outstanding balance is put on a statement for you to pay off you debt. Making only the minimum payments will end up costing you more money in the long run so do the best to pay off as much as you can at a time since most of us cannot afford to make a one-time $20000 payment towards a student loan for example.

FICO scores can be confusing and hard to understand so I hope this general information will enable you to get thinking what your score is and what you can do to manage it. If you would like more information about credit scores visit myFICO.com.

New Student Loan Interest Rates: A Fix for Now and What You Can Do About It

If you are like me along with the 12 million other college attendees who will be taking out student loans this coming fall, there have been some important changes to be aware of. On July 1st, Congress failed to come up with a plan for setting interest rates on student loans. This allowed for the interest rate of Direct Subsidized loans to double from 3.4% to 6.8% but kept the Direct Unsubsidized loan interest rate at 6.8%

Yesterday, the House of Representatives passed a bill that changed the Stafford Direct Subsidized and Unsubsidized interest rates for the coming school year. The bill was passed in the Senate last week and President Obama is set to sign it in the next couple of days. Undergraduate students who take out federal student loans this year can expect a fixed interest rate of 3.86% on both the subsidized and unsubsidized loans. This rate is tied to the rates of 10-year Treasury notes plus an additional 2.05% and these rates are locked in for the life of the loans. The rates are a little bit higher for graduate students as well as parents who intend on taking out loans for their kids.

These new interest rates are appealing to take advantage of, especially if you are eligible for the Direct Unsubsidized loan. They offer a low, fixed interest rate which is less risky than the variable interest rates that are offered by private lenders, but borrowers beware…

As appealing as these low and fixed rates are, lending in the future may cost you more. If the economy begins to improve more, the interest rate on the 10-year note will increase which will increase the interest rate of student loans. Luckily, the new bill sets a cap as to how high they can get at 8.25% for undergraduates. An article from Time Magazine states that Congressional researches believe the interest rate next year could be up to 4.62% and as high as 7.25% in 2018. With average student loan debt sitting around $24,000, an interest rate of 3.86% and 7.25% is a difference of paying $5000 in interest versus almost $10000 in interest.

So what can you do? Be knowledgeable about what you are getting yourself into. Your student loans are a debt you will have to repay in the future so stay on top of them. Check how much interest you have accrued monthly if have any unsubsidized loans and if you are in deferment. You have the option to make payments towards your loans or interest while you are in school as well. Budget your money and set a goal to save even as little as $20 each month to pay towards your student loans. It will result in lower principal and interest payments over the life of your loans. You should also take advantage of any scholarships that your school or other private institution offers to avoid student loans altogether.

For more information about student loans in general, visit the Federal Student Aid website.

Introduction

Hello everyone! This is the blog I will be using to jot down my experiences as I am traveling with the Millennial Trains Project from August 8th-August 18th. More updates will come as I travel from city to city.

If you are unfamiliar with my project or what the Millennial Trains Project is, I will include the links down below for you.

The Millennial Trains Project: http://millennialtrain.co/journey

My project: http://crowdhitch.millennialtrain.co/campaign/detail/1627