Bonus Bits – Week of 01/31/22

Good morning! Here are this week’s bonus tips and nuggets from around the community. To get these every day in your inbox, sign up to our daily newsletter where you’ll see these faster, as well as our top 3 curated articles every day!

👉 Credit Score Tips:

As someone who has had an 800 credit score for years, here are my five main takeaways to build an excellent credit score:

  1. Pay your bills on time and in full if you can 
  2. Keep your credit utilization rate low – do not max out your credit cards
  3. Use your credit cards regularly and try not to close old accounts
  4. Mix it up: Diversify your types of credit accounts
  5. Avoid opening too many accounts in a short period of time 

Bonus tip: to work on lowering your credit utilization rate, try paying off your bills in full every week or twice a month -– instead of just monthly. After you’ve tested this method out for a few months, see if your credit score has increased.

👉 What performed best in 2021: Used cars, the stock market, coffee beans, or gold?

👉Project Mickey:

My wife proposed that we fly to Disney World to celebrate once we paid off our home loan. Celebrating the achievement with a once-in-a-childhood trip to Disney seemed like an idea that we could all get behind. 

Later that week she came home with a 1,000-piece puzzle of Mickey Mouse and explained her idea. We would assemble the puzzle, then take it apart, placing contiguous pieces in separate baggies. One thousand pieces, divided by 125 reductions in the loan balance of $1,000 each, meant eight pieces per bag. 

Every time we reduced the mortgage principal by $1,000, we would put eight more puzzle pieces together. We would glue the pieces to a poster board and then put the partially completed puzzle away, while we awaited the next time we could add pieces.

The years passed, the principal declined, the puzzle filled in and the goal grew nearer. Every month, we brought out the poster board, tallied up how much we had paid off and added more pieces to the puzzle. The kids didn’t grasp the “why,” but they liked puzzles and always clamored to add more pieces. As the end approached, they came to understand the celebration that was to come.

👉 A psychological investing trick:

Put in some absolutely absurd good-til-canceled buy limit orders on the stocks you had always wished that you owned – at prices so far below their highs, it would be miraculous to ever buy them down there again. Make sure there is enough cash in your account to cover these orders should you get hit on a few of them. 

This is my very best trick for surviving corrections. I start subconsciously rooting for sell-offs to get hit on my buy limits for the best stocks in the market. And sometimes I actually get them! I bought Starbucks in the 60’s in the spring of 2020. It subsequently ran to 120. I didn’t know it would ever get down to the 60’s. I just knew that if it did I wanted to own it there. And then one morning I got filled. Boom! I am currently setting up bids at ridiculously low prices for a handful of names – all limit orders, all GTC.

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