Credit scores are so middle class, credit scores are for the 'poor'.
The wealthy don’t need a score sheet, they slap cash on the board…
Ok… Let me explain.
For the longest, my dream was to live a nice middle-class life. I didn’t want for much or need for much but the idea of 2.5 kids, a wife that loved me - who I would invest small-dollar into her business and see her flourish - with a family home 4/5 bedrooms, across 3-4 floors, and a nice garden that I would mow the lawn on the weekend, and pick between; The family car (Range Rover or Q7) - the Mrs’ car; My humble car - a Gunmetal grey Audi S5 black edition; or the weekend roadster - a Porsche Boxster with a little private plate. I would take my Porsche GT for a Sunday drive, after my Brazilian Ju-jitsu (BJJ) session with my eldest, to go grab a groovy green smoothie, and get back home in time for lunch and family time.
Sounds lovely right?… Well, I was nearly there.
Credit score 999, perfect! I even wrote blogs about how to build your credit score, in a practical way back in 2016, and loads of people (and I mean loads) over the years have told me that they used my blog as gospel! (See blog here) - originally, it was a Twitter thread.
But here’s the thing, because I wanted to be middle-classed, maybe upper-middle classed all I researched, put into practice, and aimed for, were middle-class things…
And I got there, the Mrs and I were looking for places, put in for a beautiful property in Finchley, with great schools and commute journeys and space for two cars, and that was ok. I mean, I could’ve always rented a garage down the road somewhere and stored the imaginary Midnight blue Porsche 911 and covered it up, right?
Anyways, if you know my story… Well our story, you’d know I kissed the sun and it scorched the earth. The universe had a completely different idea/ plan for us and in that plan, I was ripped out of heaven.
Why am I telling you this?
Well, I got back into the dungeon, and if Ra told me that I couldn’t have the middle-class life - I guess the blue pill? (click here or the image below to understand the context) - then I would go for the biggest heist of them all… I will go for complete, utter, totally, disrespectfully, slap your mother in the face FREEDOM!
So here I am… planning. Researching again and something that I have learned along this new level is that credit scores are for - what the rich would call - the ‘poor’ lol.
A high credit score means you’re poor. Dam, right? You’re poor in the sense you have to borrow to live - therefore you live in debt. Your home is a loan, your car is a loan, your holidays are a loan, everything you think you ‘own’ you don’t, and for a lot of people - with this false sense of security - they learnt this the hard way during Covid.
So here’s the plan, how are you, In fact, how are WE going to pull a heist on Freedom? We will play by the real rules.
The REAL rules
A few things here:
If you know the language of money, the first thing you would do is cut up them same credit cards I told you in 2016/17 to apply for.
Change your goals from buying a house or owning a portfolio of houses, these are LOW yielding items that are incredibly illiquid. You may laugh when I say this now but RENT - If you do own where you live, go rent somewhere else and rent out your property, at least change it from being a burden of some sort.
Learn how to INVEST. Now there are 3 types of investing styles.
I’ll leave points 1 and 2 for another time but we will focus on point 3:
POINT 3: Learn how to Invest.
Investing in yourself - your own intellectual property, skillset or craft.
Investing in others - investing in someone else’s intellectual property. skillset or craft.
Invest into an institution - which is technically a legal entity/ person but we will give it its own section - its intellectual property, product or craft.
Spawn a NEW character
Register a limited company.
Create a new player for your game, now here’s the trick, your new player will have no XP points - experience points - ‘credit score’ so, to begin with, your LTD will leverage yours but who cares? If you have a good credit score you’re poor remember lol.
Flesh out your idea, create a 1-page business plan to streamline your thoughts, funnels and uniqueness then blah blah blah - another blog for another time. Create your brand, apply your idea and buy a domain name - 2 out of the 3 of these are I.P. (Intellectual property)
Trademark and/or copyright your things.
Then create a pitch deck (another blog for another time) bang out some financial assumptions, make it airtight and reach out to the people with the money!
Rule of thumb - “Those who are idea-rich are capital-poor, those capital-rich are idea poor.”
Just be aware, there are people in the middle, that have both rich ideas and the capital to create and execute into a one-percenters lifestyle - but these people are rare as it comes.
“Idea rich, capital-poor, capital-rich, idea poor”
You are now a business owner. Understand this is far different from being an entrepreneur. A business owner does what it says on the tin. They own a business. Good or bad, this does not make them an entrepreneur. An entrepreneur takes money raised from others and builds upon an idea.
Now notice what I did there.
The Business owner
Most business owners are middle-classed. They most likely have great credit scores but they have a ceiling. They will NEVER truly be free. They are either working to keep the cash flow going, then when the bank says it’s ok, they can borrow more money to get into new spaces, take on more debt, and pressure or working until the end - sell, death, bankruptcy.
The Entrepreneur
Entrepreneurs on the other hand run through the funnel. They raise funds on a great idea - you don’t need a credits core for that. They build a product - raise funds on that. They find product-market fit - raise funds on that. They build revenue streams - raise funds on that. Then introduce newer propositions and then guess what? Raise funds on that lol.
This is an oversimplification of the process but the one thing that both the business owner and the entrepreneur trade off on is TIME.
Building a business is never easy and personally, I wouldn’t recommend it to the masses because there is a really strong tie to one’s mental health and like I said, the blue pill is the happy li(f)e… But notice the difference in constraint?
Whilst the entrepreneur has the pressure of executing at a high level to make good on their promises to friends, family and investors, his barrier of entry was just ‘know-how’ and the acceleration from zero to multimillionaire can happen over a short time span of 5-10 years. Exit.
For a business owner, you need to hit all the criteria and jump through all the hoops the banks and financial institutions give you to just get started, and then your exit time is at least 15-25 years. Stake your mortgage to leverage a loan to give you more funds? Now you put your home at risk… How long is that commitment? 25-35 years and the interest rates are a killer!
Really, Interest rates are for the ‘poor’. Just like Taxes - I’ll leave this for another blog. The wealthy, pay for it cash, keep it, sell it or give it away (in cash). They are strict on what fees take away from their earnings and even stricter on how their money is stored. And thus, if one pays for it in cash, straight up, one will forever have a ‘poor’ credit score because a poor credit score can come from having a zero credit history too - they hardly take on ‘debt’. The most you’ll see a wealthy person use, on credit, is a charge card. An AMEX or two just streamlining expenses and clearing the balance monthly. Funnily enough, you’ll even hear some wealthy people brag about how low their credit score is…
Because what’s game credit, when you play by different game rules?
Don’t believe me? Cool.
Yours Truly
Beckford
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