Episode Transcript
[00:00:00] Speaker A: Sam.
Foreign, Are you ready to talk about how to make a money pivot, how your credit, your taxes, your business strategy and income all come into play? Well, on tonight's episode of Pivotal Change, with me, your host, Ryan Khan. We're going to be talking about all of those items with Aldiva or Ali Rubel Cava. She is an expert. She's also known as the FICO Diva. And she is the Fico Diva in many ways. She gives financial solutions through Aldiva's Financial Solutions, her actual company. She's a founder, founder of Better Solutions Incorporated, which is a 501C3. And you can follow her on multiple platforms. And we'll get more of that in just a minute. But if you don't know very much about this woman, you're going to definitely want to look her up because she has won substantial awards and she's going to be pouring out some serious advice and wisdom for you. So get your pen and paper ready to take some notes because you're going to need it. She is the woman of the year. She's been business woman of the year, woman of the month through Power magazine just in February. So you're going to want to pay attention to what she has to say. Ally, welcome to the show.
[00:01:27] Speaker B: Thank you for having me.
[00:01:29] Speaker A: Well, I can assure you the pleasure is mine, and probably more so the pleasure is going to be the audience is here in just a moment. What I like to do is I kind of like to warm people up for getting a little bit to know. To know you a little bit and then understand how and why your brain works the way it does. So what I want to do is I want to talk about assumptions. When people maybe see you or even hear the word Fico Diva, what do they think of when they hear that or what does that story turn into with the questions they ask you? Because I want to know the real story behind Fico Diva.
[00:01:59] Speaker B: Yeah, so I started my business as recovery credit repair, and I was just focusing on credit repair and nothing more. And because my name's Al Diva and I deal with FICO scores, that's where FICO Diva came into play.
And so when I was doing advertising with NBC and with other TV networks out there, they. They even told me, you know, Ali, we couldn't have come up with a better name. You did a great job coming up with that. So that's how FICO Diva came about, because I dealt with FICO scores and my name's Al Diva. So there you go.
[00:02:37] Speaker A: It was a match made in Heaven, it sounds like that's. That's literally.
I like. I like that real story and about using your background to create your future.
So let's talk about your background a little bit more. You know, with fixing credit scores and now helping a lot of business owners change all kinds of things that we'll get into in just a moment. What's maybe a personal money lesson that you learn something, possibly even the hard way, that still guides you and how you teach others?
[00:03:02] Speaker B: Yeah. So the biggest money lesson was I was a licensed female contractor in California for 15 years.
And I, like many entrepreneurs out there, was, was focused on the gross income. I was not focused on the expenses. I was not focused on the net after the expenses. And so one of my big, pivotal education tools that I teach everyone and is we don't live off of our gross. We live off of our net.
So if you're not focusing on what your expenses are, where your money's going to, how much came in versus how much needs to go out before you have what's actually left over, you're never going to overcome obstacles because you're always going to be robbing Peter to pay Paul.
[00:03:55] Speaker A: I think robbing Peter to pay Paul is a cliche phrase that comes up in our line of business with helping, you know, other entrepreneurs and things a lot. And people are having to shift and move money everywhere, and they don't understand that big picture, that planning. People are not looking at their net profits, their eb. They're not budgeting out these recurring expenses. And especially people like in construction, it may not be as bad in California, but construction in Kentucky is rather seasonal. Right. And so they don't know how to ebb and flow with things like that. So that's. That's a pretty good personal touch in, you know, 15 years is a, you know, that. That contractor position. I'm sure you're quite the minority of a female certified contractor like that. And so you probably had quite the view, quite the perspective to lend to your clients, which. Which I like that. So starting with that, was there any specific things that you learned that the world was teaching you about these risks and these margins and leadership over the finances for these people?
[00:04:55] Speaker B: You know, honestly, I'm gonna go back to 2008.
Money was great. I was bringing in $5.5 million a year, and then the market crashed.
Everything took a dive, and I went from making 5.5 million down to 47,000.
And then I was trying to dig myself out of the hole for two years, and I eventually had to file bankruptcy myself in 2010 because there was just no escaping that. It was so hard.
Another thing I learned was a mistake that I made was getting those merchant cash advances because they give you all this money, but then daily as you're receiving the income, they're debiting 25% of your. Of your income to pay back that cash advance.
So now you're down to 75% of your cash flow as opposed to 100% of your cash flow to go towards your debt. So you're just digging a bigger hole. And don't get me started on the interest rates. They're insane.
So it's just things that a lot of people don't take into consideration. Because I feel that a lot of our entrepreneurs are making moves based out of desperation and they're not slowing down to evaluate what their business decisions are.
[00:06:20] Speaker A: I like that. I've used. You tell me if you think this might be an appropriate metaphor. I've used the analogy of the bigger your ship is going and the faster you're going. A lot of business owners are just driving that boat forward, right?
[00:06:31] Speaker B: Yeah.
[00:06:31] Speaker A: And they're driving that boat forward and that they're not looking back at the wake that they're causing. And they're driving through their, their neighborhood, their, their little boat dock, and they're knocking all the boats out of the way. They're disrupting the. And everything's getting tossed and turned. So by the time they stop, there's this huge surge that hits them and it all catches up to them and ultimately sinks their boat.
You know, So I appreciate you pointing out some of those things and some of the dangers of that quick money, those cash advances, those merchant loans and things like that, that can really damage that. So you obviously having to have declared bankruptcy took a big hit to your credit score.
Yeah, there was probably a build back phase. So how long did it take you to build back a reputable score?
[00:07:13] Speaker B: So that's the beautiful thing about bankruptcy. Because, you know, some of you viewers out there watching, you might need to file bankruptcy. And if you do, I want you to know it's okay.
And I say that because as soon as your bankruptcy is discharged, if you go chapter seven, not 13 or 11, because those are different.
But if you go chapter seven, your bankruptcy gets discharged today, you can get a secured credit card tomorrow, you can rebuild your credit in the next 45 days.
And creditors love you after bankruptcy because you can't file bankruptcy again for eight years.
So now they're protected from you.
And if your goal is to buy a home.
Two years after your bankruptcy discharge date, you can actually close on a home.
So if bankruptcy is in your future, don't be afraid. It's okay. You're not the only one out there that's going through it.
Just know that there is.
There's peace at the end of the chaos.
[00:08:18] Speaker A: Yeah, I think that's great advice. I think people genuinely need to hear a lot more that whatever situation you're in, you're not going at it alone. And so whether that's the highs or the lows, you can find people on both ends of the spectrum that can help you work through those. So let's talk about one of the highs real quick. Back in 2006, businesswoman of the year. It's a pretty big deal. What did that season cost you behind the scenes, you know, in order to earn and work towards that title? And then what did it unlock for you next?
[00:08:48] Speaker B: So what. What was happening behind the scenes was I was one of the few female licensed contractors in California. I had 100 men working for me. My payroll was through the roof. I had high workman's comp, not because we had any accidents, but because of our classification code at the time.
So there was a lot of expenses that were rolling out, you know, your general liability insurance, your bonds, your contractor's license, like all these things that you have to maintain and.
And again, focusing on the gross and not preparing for what was to come because we kept seeing, you know, all of these negative amortization loans that were happening. So I'm going to tell you about my case because I was a victim of it. I shouldn't say victim, because I bought into it, but I also had fault in it, But I was a victim of it. And what I mean was I bought. And what I'm going to tell you guys are crazy numbers, but they're factual. I bought a $700,000 home, and my mortgage payment was 1300amonth.
That's less than the interest on the home. Okay. That's why they were negative amortization loans. They were going backwards.
So as I'm paying my thirteen hundred dollars a month, there was more interest accumulating on the back.
So then three years later, when the loan amortized, my $1300 a month became $6000 a month.
I had to do a short sale on my home, sold my $700,000 home for only 350 to someone else, and now that home is worth over $1.5 million.
[00:10:36] Speaker A: Wow.
[00:10:37] Speaker B: So, yeah, that's.
[00:10:40] Speaker A: That's very Tough. So last question. We got maybe 30 or so seconds before break, but when did you realize that your lane wasn't just building businesses, it was building financial confidence from all of these lessons and life experience?
[00:10:54] Speaker B: Honestly, it was. The more I speak to people, the more I hear their stories. I look beyond their situation.
I tend to listen to them with a different ear and I tend to pick up on their habits as they're describing things to me that makes sense to me, that help me explain things to them to where it makes sense. And that's what opened up my doors to all this education that I do now.
[00:11:20] Speaker A: I like that and I'm going to describe it for movie lovers out there. It's like when Neo can first see the Matrix for the first time and he can see all the numbers running. You're looking at the person or the business and you're seeing the numbers, the habits, the situations behind the scenes. And I think that's really important. So we're going to stick a pin in the conversation right here in just a moment. We're going to return and get a little more tactical, a little bit more specific about credits and taxes and funding and stuff like that. So everybody sit tight. We'll be with Ally here in just a moment after this break.
Foreign.
Welcome back to Pivotal Change and thank you for sticking with us through that commercial break. The real cool part about this show and this network is that you can find us anywhere anytime because we are streaming and live on demand. You can go to the NOW Media TV website, you can find Pivotal Change, this show, your favorite, and many other of your favorite shows as well. And they're all in English and Spanish, so just work through the menu, pick whatever you want. And the nice part is it's iOS, it's on Roku. You can find us on YouTube pretty much everywhere. And you can download the podcast version at NOW Media tv. So catch it on the go. Even if you can't watch, you can still listen to your favorite shows. So we're going to roll back into this conversation with Ali Rubel Cava and she is the FICO Diva and she has some incredible financial advice. She's telling us her background, her story of even having to claim bankruptcy herself and building out of that and giving us some anti fear tips into doing that. So we're going to jump down on the weeds a little bit more, give them maybe a little bit more tactical. And so I'm sure you hear this a lot, but somebody that you're working with or potentially working with comes up and says, yeah, but my credit is bad. What are the first? Maybe let's say two things that you look at to tell whether somebody is like a quick, quick fix or they're going to be more of a deeper build.
[00:13:29] Speaker B: So number one is, are you maxed out on your credit cards? Because a lot of times you have no collections, no charge offs and your scores are low. That is a clear indicator that you are overspending on your credit cards. What does that mean? That means if you're spending more than 30% of your credit limit, you yourselves are dropping your scores 80 to 120 points.
So I want you guys to think of a credit card, anything that's revolving, which means I could spend it, I could pay it, I could spend it, I could pay it. That's why it's revolving debt, right?
So I want you guys to think of when you were a kid and you played on a teeter totter.
So when you have zero balances and zero debt, your level, there's nothing to push you up or down.
But the minute your debt starts going up on those cards, your scores start going down. The minute your debt starts going down, your scores start going up.
So when you think of debt down, scores up, debt up, scores down, that makes sense.
The second thing is charge offs now and collections. Depending on the state that you're in, we have a thing that's called statute of limitations.
So for example, California, Texas, Nevada, they only have four years to collect on the debt. Arizona, Washington, Oregon, they have six years. Tennessee and Wyoming, you all have 10 years.
So it's really important to understand how long debts legally collectible in your state. And it's from the date of last payment, not from the date you went into collections.
[00:15:09] Speaker A: That's very good information to know.
And you know, so quick little thing, some people are in service industries and they say, hey, I'm going to engage in a project for you. And it might be a two week project, two month or two year project, and they don't invoice to the very end of that project, somebody stiffs them on the bill. How does that work in a situation where people are trying to chase down work they've been doing for the last year or two.
[00:15:30] Speaker B: So that's where it's important to have.
What's the word I was looking for?
I just lost my train of thought. When you, when you bill in advance, not in advance, but why can't I think of the word? I'm having a brain crown?
[00:15:45] Speaker A: You do the project completion and you bill after the Project, the results are all done.
[00:15:50] Speaker B: No, but you can also do the billing where as you complete certain steps.
[00:15:55] Speaker A: Oh yeah, phase phased out, building like construction phase, things like that.
[00:16:00] Speaker B: Yep, exactly. So it's important to do that and also be clear on your contracts because one thing I'm going to tell all of you right now is what are we doing nowadays? We are getting a docusign. And what are you guys doing on your docusign? You're going, oh, I got the contract signed, approved. And how many of you are downloading that docusign and how many of you are reviewing it and how many of you are reading the fine print? Very few, because you guys are taking in, are taking what the other company's saying at their word. But what's on paper is what matters, not someone's word.
So it's really important to always download those docusigns, read, highlight, question, whatever you're not sure about.
Yes, it's time consuming, but chasing money is even more time consuming.
Okay.
And in that way you don't sign something and get into a contract that you're not aware of. Some government contracts, they take 90 to 180 days to pay. Okay. Are you, are you able to front the money on the, on the labor front, the money on the material front the money for anything for 90 to 180 days?
Only you can answer that if you're watching.
[00:17:25] Speaker A: Great advice. So it's the power of your contract and that written word is going to supersede any verbal agreement, any, you know what promises that were made, unless you can, I guess, record or put down and pay for those promises. So great answers. I like that a lot.
So going with people that are having these credit issues, and I know we got on tangent there a little bit, what's the difference between like credit repair and just having a credit strategy? And why does the distinction change really everything?
[00:17:53] Speaker B: Yeah. So credit repair is when you actually have negative remark, negative items on your credit report that are not factual and that are inaccurate and that we can actually go after and remove from your credit report.
Now anything that's factual and accurate is very hard to go after because you actually did it.
So what I mean by that is I'm going to pick on late payments. Everyone's always worried about, can I get these late payments removed? Okay, if you were physically late in February of 26, but they reported you physically late March of 26, but March you have proof that you made the payment on time, that's a, that's an inaccurate error that can be Resolved.
But if you are physically late in February and they reported you physically late in February, that's always harder to resolve because you actually were late.
So you need to keep that in mind because I know a lot of credit repair companies out there will say deletions in 90 days, guaranteed.
First of all, it's illegal to promise or guarantee anything in credit repair. You need to know that.
Second of all, there are some strategies out there that are not lawfully done.
You need to be aware of that too.
And third of all, you need to know that not everything can be fixed.
Yes, a lot of things can, can be fixed. A lot of things can be corrected.
But not everything can be fixed all the time.
So if you ever, if it ever sounds too good to be true, keep your spidey senses up because more than likely that's what's happening.
[00:19:44] Speaker A: I like that a lot. And I really appreciate you making an emphasis on the promises and guarantees. There's very few if any promises and guarantees in life other than like, hey, we're all going to die one day, right? And so that's, that's really important. So somebody's making the promises, the guarantees that we can remove this, we can reduce that, we can. You're probably looking at maybe some scammers. And like you said, your spidey sense should be something that you rely on and at least do further research, do get some testimonials and referrals and things like that.
And again, nowadays with the Internet and AI, you can probably get some pretty credible research pretty quick about how that stuff works. So thank you for explaining that. So tell us a little bit about DSCR and how you've broken that down and how that works with the real estate credit, because you've talked about that on your show. So tell us about that. Like what's the number one way that people maybe misunderstand stuff revolving around leverage and they end up somehow trapped?
[00:20:38] Speaker B: I love DSCR loans. So in order for you to get a DSCR loan, there's two ways. One, you either have to have a corporation or an llc, or two, you can be an individual to qualify for a DSCR loan, but you have to own your main property. So keep that in mind.
What I love about DSCR loans, especially if you have an LLC or a corporation, is that you have to put down 20%, you have to put down your closing costs, and as long as your mortgage is 1% less than the rent in the area that you're buying, you qualify to buy that property.
Now, a lot of lenders do not report and I'm saying a lot because some do, but a lot of lenders do not report that debt on your personal credit report. It's only reported under the LLC's name and the EIN number.
So then whenever you go to buy property for yourself, it frees up your DTI because that, that, that loan isn't reporting on your personal credit report. Like I said, sometimes some lenders do report a DSCR loan on your personal credit and as long as you have proof it's a rental, that can reduce your, your dti, your debt to income ratio.
But I love the product, I think it's awesome.
[00:21:57] Speaker A: Good. So people need to investigate that and if they need some advice, they probably need to tap you on the shoulder for that lender.
[00:22:04] Speaker B: Just so you know, I do not do lending, but I do have a lot of lender partners that work in multiple states.
[00:22:10] Speaker A: I love that. See that's, that's for me, part of the, I like being the person that like, well, I know the person, I know the guy, I know the gal. Let me hook you up. And brokering, that's another thing I do. I broker a lot of stuff for people, but that's not what we're talking about. So let's go back to the small business owners because that kind of seems to be a niche. You know what's maybe like a funding move that you see a lot of them jump into.
It's a good move. Maybe they're chasing it too early or it's confusing like hey, all my friends are doing it, but it might not be right for them. What should they build first so that lenders are going to actually take them seriously.
[00:22:40] Speaker B: So number one, there are some nonprofits out there that work with startup businesses and they do give you startup loans, but you do have to have a business plan in place. Okay. They want to see what's your projected income, what are your projected expenses, what's your projected growth in order for them to buy into your dream. But there are funding sources out there for new for startups.
The majority of them want to see that you have at least two years in.
And so what I see a lot of mistakes that people do when they form their corporations or their LLCs is they stay stagnant for two years to let that two years grow as opposed to get yourself a secured credit card under your EIN number and start building your business credit to make you more credible for when your two year mark gets there.
[00:23:33] Speaker A: I like that. I like that. So here in just a moment we're going to come back from another break. But first, tell us how to get a hold of you. We're liking what we're hearing. How do people find you?
[00:23:43] Speaker B: Yeah. So obviously our website is ficodiva.com you can call us at 559-372-2823. Text us 559-744-4011. You can follow me on Instagram, on TikTok, on Facebook under Fico Diva. I'm also on Snapchat, WhatsApp, you name it, I'm there.
So, yeah, just look for us, follow us, call us. And so let's, let's start talking.
[00:24:14] Speaker A: All right. We definitely are able to find you and you'll be able to find us here in just a moment after this break.
Congratulations. You've made it past the halfway point of pivotal change. But we're really just getting the fun started here. We were starting to get into some of the nitty gritty, some of the real tactical strategies and advice that you can take home with you. So keep that pen and paper ready. We've had all kinds of discussions about credit repair and credit stat strategy and getting into what types of loans might be available, types of timelines. It is be able to get into some funding options for your business to help you grow.
But we're going to kind of get in some of the no fluff area as well, too. So, Ali, let's talk about maybe some no fluff credit rules. You know, what are maybe three habits that could build credit quietly over six to 12 months and three habits that sabotage every person trying to get that high score.
[00:25:24] Speaker B: So the first three habits are using more than 30% of your credit limit, getting a lot of I'm going to pick on these buy here, pay here. Now, companies that give you six months, same as cash.
And the reason why I'm picking on them is because they give you these little micro loans, six months, zero interest. You make your payments on time, you pay them off and then what happens? It closes the account and it deems you 50 points.
So I've seen people with like 30 of these little pivotal six months, same as cash accounts on their credit report. I really wish that these accounts would convert into revolving as opposed to being installment debts because then it would help the consumer more. But every time that you open one of these accounts up, you make your six months on time. You, you're perfect. You're never late. Your scores are going up, you pay it off, it dings you 50 points. So that one drives me insane.
And what's the third one, the third one is not checking your credit. A lot of people think that credit. Well, the one that's online, that starts with a, with a CK is, is a good source. And it is, except you need. And then you're like, well, I, but I review my experian on experian.com okay, so you've got this online resource that's based on advantage 3.0 score. You've got experian.com that's based on a FICO 8 algorithm. So you're reviewing two different algorithms and you're not understanding why your scores are so different. And that's the main resource that's the main reason is that you're looking at things from different platforms and then you're looking at your credit scores on your, on your credit card apps. Those are all based on FICO 8 because that's the algorithm that credit cards use in order to approve you or deny you for a loan.
Now, when it comes to mistakes that I see a lot of people do is people want to carry zero balances on their credit card, which is great. However, whenever you keep a zero balance, your credit's reporting like it's asleep. Even though you used it and you paid it off, it's still on paper, looks like it's asleep. So what I tell people is, is allow a 5 or $10 balance to report.
Yes, you're going to pay interest on that. I don't want to hear it. But it's going to wake up your credit because now there's going to be a little balance reporting and it's going to shoot up your algorithm higher.
So, and those of you who don't believe me, try it. Let me know how it works out.
[00:28:14] Speaker A: Well, I, I'll be a testament for that. I, I got some really good advice from when I was in college and I opened up a, the discovery had a student loan credit or student credit card. It was a 500 max limit. And so my rules were this is for gas only, so I only use gas. Again, this is back a couple of years ago when gas was cheaper. And so I would run up 50, 75, 100 bucks a month and I would pay off. I would pay off 90% of it every month, right? And so if I had a hundred bucks, I' eighty to ninety dollars a month carry ten dollars over. I didn't know what I was doing. I was basically just throwing the money. I had at it in a couple of months. I paid it off and tried to carry very little forward. I was Very disciplined. This is for gas only, right? And I got out of college with a bunch of student loan debt and my credit score was like in the 690s as a college student with, and then only grew from there when I finally got a real job, real career. So that is something that can build credit fast. And that's what I do with a lot of my pre entrepreneurs, like a lot of the young people that I coach into getting ready for business. And so that piece of advice is a little gold nugget that she just gave you folks. I hope you write that down and start doing that today.
That's, that's a big one. All right, so people get some credit surprises. They don't know how to, they don't know how to follow your no fluff advice. But now they wrote down the three and three.
So now they get around to, okay, I'm running my business. Hey, my gross numbers are looking good. You told me to watch out for my net numbers. I'm getting my, my credit under control and I'm not paying a whole bunch of interest. My score is going up, but all of a sudden, boom, tax season hits and I get this big tax season surprise. And small business owners run into this all the time. So what do they need to start doing to track monthly and quarterly to be able to be prepared to handle taxes?
[00:29:55] Speaker B: Books, books, books, books, books. And I, I mean it all the time. Do your online QuickBooks. I love QuickBooks online. It's one of my favorites. If you prefer Excel, if you prefer other software, it's whatever you're most comfortable with. But books, books, books. Okay? And what I mean by books is you don't just go in and put in your transactions, right? You actually have to go in and you have to do a bank reconciliation every month. So what does that mean? That means that my bank statement shows this, my QuickBooks show this, and at the end of the month I'm zero, which means that I balance. So that means that my bank statement and my QuickBooks all balanced. One thing I'm going to warn you guys about QuickBooks, especially when you have the auto dumping feature. I cannot stand QuickBooks auto dumping feature. I'm going to tell you why. Okay? Yes, it's convenient because it's linked to your bank account and it's automatically putting things in for you.
But it's misallocating funds, it's duplicating transactions.
And if you're not on top of could actually cause you cost, cause you to owe more money in taxes. Okay? So it's really important to review your books, make sure that you're doing your monthly bank reconciliations. Make sure that if there is a duplicate transaction that you're voiding it. Never delete. Because you, if you ever get audited from irs, they want to see voids, not the leads, because that's a proof of something. Okay?
So it's really important that you track these things and that you see where you stand. Because a lot of mistakes that business owners make is they're like, oh, I spent all this money here and I forgot if it was used with a business bank account or a business credit card and you were, and you had everything allocated, it would be in your expenses, it would be in your profit and loss.
Okay? Another thing too is interest. Interest on credit cards, that's a write off. Interest on you, on your corporate vehicle, that's a write off. Miles many of you drive forever and you're not tracking your miles. Now commuting miles do not count. But going from your office to a job site and back, those count. If you're an investor and you're out there reviewing properties, all those miles count and you're not logging them. Why?
You know, you need to log these things.
[00:32:29] Speaker A: I love what you're saying here because you know, when in the accounting firm the number one problem is dirty books, we have to clean up the books. And of course that's a headache. And the human memory only serves you so much. You know, it's Mark Twain that said a short pencil is better than a long memory, which means write it down back then. Well, now we have computers. Get an accounting software, get your bank balances in order, get everything lined up. Because we see business owners running literally multimillion dollar businesses out of the cash register. Like, well, they look at their bank account, do I got enough money to make this purchase? Or shoot, my bank account's a little low, so I better like, you know, drive up some sales instead of having a true financial position and picture because they understand and have clean financial statements. And then you'd mention the write off and deduction. So that's common language for us. But break us down a little bit about write offs. They're not just free money, right? So what's the difference between being smart with your deduction strategy and maybe deductions or write offs that ultimately create a long term.
[00:33:28] Speaker B: So honestly, what I've been finding, and correct me if you've been seeing other things, is that people go in to do their taxes and they go, here's my income, here's everything that I spent my money on. Here you go. And the tax person goes and goes, okay, you now owe this much money.
There's no questions.
There's no. Based on your type of business, typically you have this kind of expense or write off, do you.
There's none of that there. You're in and out and like, like Taco Bell, like in and out in two seconds or less, you know, and that's not the proper way for a business to be doing their taxes. And then also, if you as business owners are always writing everything off and then you decide you want to buy a home.
[00:34:18] Speaker A: Yep.
[00:34:18] Speaker B: That can prevent you from buying a home.
So then you need to know that you need to report X amount of income and have your adjusted gross income show a certain dollar amount so that you can qualify to buy that home that you want to buy for your family and for two years, not one. And yes, you're probably going to have to pay taxes on that income that you're reporting, but that's okay because you're going to get the ultimate goal of owning your own home.
So there's a lot of things that strategically you have to consider when you're doing your books and when you're doing your taxes. Because sometimes not all write offs are good write offs, especially when you have a goal of buying a home.
[00:35:00] Speaker A: I love that.
[00:35:02] Speaker B: And also if you're always reporting a loss, the IRS is going to be like, this is more of a hobby. Why are you even in business?
[00:35:10] Speaker A: So that hobby board is a huge buzzword in the compliance and attestation and auditing world. So that, that's a good point made. So we got about just like 20 seconds before we cut to a commercial break. So just maybe pull out one habit that you see entrepreneurs do that is a magnet for stress. Every spring during tax season,
[00:35:30] Speaker B: I'm going to pick on the tap and go, this thing is not your friend.
The convenience of tap and pay is not saying, I have a thousand dollars in the account. I just tap 300 bucks. I have $700.
You guys are too focused on what's in the bank account and not focused on the expenses.
[00:35:52] Speaker A: So stop that beautiful statement. You're too focused on the actual bank account and not on the expenses or the projection. So that's a great place to pause. We'll be back for our final push of the night here in just a moment with more pivotal change. It.
Foreign.
Did you know pivotal change could be found anytime, anywhere that you have data or wireless connection because it is on demand? You can get it on the NOW Media TV website. Here's an example of pivotal change you drop down. You pick from any menu of whatever you want in English or in Spanish. The multilingual network for everything from culture to arts to news to media to leadership and business. And you can find it all in a podcast version as well. You can listen on the go find it on Roku, iOS, YouTube and the Now Media TV website. So we're going to get back to this episode here and we're going to get through the big push because Ali the FICO diva has been leading us to something. We're talking about fixing your credit, all of these hazards and things to watch out for. Not all write offs are good and how to plan for your future, but not just your immediate future of maybe getting out of debt and raising your tennis tech technical credit score, but building generational wealth. So if I said to you I want to build generational wealth, what's the first boring financial thing you would tell me to start looking at or doing?
[00:37:41] Speaker B: I would start looking into Iuls and I would start looking into life insurance, especially if you have kids.
Do you know that you can actually get a policy for your baby at maybe 30 bucks a month and it'll stay that at that rate till they're 99 years old and by the time they're 18 they can actually buy a home cash because of that life insurance policy.
And a lot of people don't look into that. We'll spend $30 or more on our nails, but we won't spend it on something that's actually going to build that generational wealth.
So I think it's really important to consider that we do so much mindless spending on things that don't matter as opposed to actually getting something that does matter and helps us with our future and helps our children grow as well.
[00:38:38] Speaker A: You know, I think you just said something really important is that one there's areas to answer that's an investment ultimately, the areas to invest in, to look at and to capture future resources based just on looking around and asking a few of the right people.
And another thing too, your mind shift there was hey, this is the cost of my my nails getting done right? And I started to think about that a long time ago. So a long time ago I was trading time for money. I worked at an hourly rate and now I work on a value based type of proposition.
But in both scenarios, let's say I wanted to say, hey, let's take my family out to a nice celebratory Big meal. One of these big meals for family at a really nice restaurant could be 3, 400 bucks these days. Especially if you let your kids order steak because you're celebrating something, right? And so you get a 400 meal. And in my head I was like, man, I gotta work three, four hours in order to pay for this meal. And then now if I want to take my family on vacation, I say, I want to upgrade our vacation. Let's go someplace really nice. I have to do so many advisory packages or so many value based property. I need three new clients to pay for this vacation.
When you start thinking about it in that trade off, I think you can start building generational wealth. I can either buy this cup of coffee for $5 a day for the rest of the week and I'm working. You know, let's say I do it six times a week, that's 30 bucks. Or I can make coffee at home and pay for a life insurance policy that's guaranteed to make my child a millionaire. Right?
So I really, really like that you pointed that out. So let's shift to your not for profit lane instead of keeping everything inside your for profit work. You know, what gap are you seeing in communities that, that are making you push into this area?
[00:40:12] Speaker B: So what I feel is there's a lot of financial literacy need out there.
Especially when, God. When I was in high school, we used to learn how to use a check register, how to write a check, how to balance a checkbook. What does that look like nowadays? And you know how many adults I speak to that have never written a check in their lives, have never seen a check register in their lives. And they're, they're just so focused on. My app says I have this much money, so I could spend this much money. And they're not focused on the reality of I just made a thousand dollars, my rent is 800.
I only have $200 to put gas, put food on the table and last until my next paycheck.
So what does that look like? Or do I get $1,000 a week and my rent is $800? So do I put $150 a week in savings?
You know, even in the money market savings account that's earning you 3.75% interest as opposed to that lovely one miserable penny a month that we get.
And that way your money is growing with a little bit of interest, a little bit of money that you have in there, and then when it's time to pay your rent, you've already put that money aside. I Feel like everyone's focused on this is what I have in my checking account. And no one's transferring into a savings account that can grow a little bit. So then when it's time to pay the bills, then they just transfer it into the checking and pay.
So it's a mindset change that I'm trying to create out there so that people can start being more financially savvy.
I, I can't stand people say, you know, they don't teach us in school anymore. They really got to teach us.
Yes, they don't teach us that in school anymore. And I'm going to tell you this now, a lot of schools are trying to get it, trying to get into financial literacy.
How many of those educators, and I say this from personal experience, from people I personally talk to, I'm not saying that everyone is in this category, but it does exist. How many of the educators out there are living paycheck to paycheck, they're not balancing their books, but yet they're the ones teaching us about financial literacy and they're teaching our youth.
So it's things to consider and I feel like that there's a big gap and there's a huge opportunity out there that needs to be fixed.
[00:42:51] Speaker A: I think you're, I think you tiptoed to the next question I want to answer you, so I'm going to tweak it just a little bit. But what you're saying is so important is who are you actually listening to to give you your financial advice?
Most of what they teach you in school is how to get a good grade on a test so that both you and the school get funding and a college application approved. Right. And so you have to teach this mind set shift. And so I'm not in my 5M's program. Mindset is the number one. It's the first M. So are you teaching these youth, these future entrepreneurs, you teach them more about budgeting? Are you going credit scores? What are you doing first before anything else with that mindset change?
[00:43:28] Speaker B: So I, what I'm doing is, is I'm making them so I actually am a the financial literacy coach for a non profit for another nonprofit. And so with their students, when they come into my class, I don't tell them what I'm doing, but I make them open up their bank apps and I make them download their last monthly statement and I make them write down this is how much income came in, this is how much I spent on food, this is how much I spent on coffee, this is how much I spent here, how much I spent there.
And the aha moment at the end is crazy. Like, some of them were like, how do I have all this money left over? Where did it go? Or some of them are like, I didn't even realize I spent that much money here. So by me inadvertently making them do the work, it's opening up their eyes.
[00:44:25] Speaker A: I like that. So you're putting it. Instead of that transactional mindset and that transactional life, you're saying, I'm gonna at least put one month fully in front of your face, make you write it down and highlight, underline, and add up certain categories. Like, again, how much did I spend on coffee this month? And people get shocked because you put it all right in front of their face. That's really. So there's a form of leadership in doing that. So speaking of leadership, you have something that. It's called high standards with a high heart.
Right. And so what does that look like when you're serving people who might even feel ashamed about their money or money situation?
[00:44:58] Speaker B: So that's one thing with me is that I don't care where you came from.
I don't care what happened in your life. I don't care about your past because your past is behind you. I care about where you are right now. And my biggest goal is if you come into my office or I meet with you and you walk in with your head down, I'm going to make sure you walk out with your head high.
Because there's always a goal to be achieved.
And never be ashamed because life happened, because life happens to everybody out there. And you're not above or below anyone else. You're special, you're unique, and you're deserving.
[00:45:40] Speaker A: Love it. So what's the most powerful before and after transformation that you've witnessed?
[00:45:45] Speaker B: Oh, there's been so many.
One of them was a person who, who came in and so they owed over 260, $60,000 to the IRS, and they were terrified, and we didn't offer uncompromise, and IRS settled for 21,000.
And now they.
They're. They're just so proud because they were able to save all that money and, And. And make. And make a. A change in their lives. And they feel like that monkey is now gone, like that weight is gone.
And they feel free.
[00:46:22] Speaker A: The amount of stress that must have been off of their shoulders and the ability to get stable again, that's an incredible, incredible story.
So let's give us last thing of the night. You got to leave us with the three things, three moves that you want them to take in the next seven days, go.
[00:46:37] Speaker B: Number one, download a bank statement. I really want you guys to do this. Download a bank statement.
Look at your income, look at all of your expenses, See where your money's going. You're going to be amazed at where there's so many money saving opportunities that you're just not taking advantage of.
Number two, check your credit. And it's okay if the numbers are low, it's okay if the numbers are high. But see where you stand, okay? You need to get a grip on that. A lot of you do. Not a lot of you do, but a lot of you don't. Right?
And then third, you know, ask questions, reach out.
Whenever someone tells you the word no, I never want you guys to take it as a negative because to me, those two initials in O stand for new opportunity. So when someone says no, be like water pivot. And now you have a new opportunity that's going to open up doors for you. Because this one said no.
[00:47:42] Speaker A: Ali, where do we find you? If we want you to be that person, we ask for help.
[00:47:47] Speaker B: Yeah. So reach out to us via online ficodiva.com you can reach out to us on Facebook, tick tock, Instagram, WhatsApp, Snapchat. It's all under Fico Diva. And of course, give us a call. 559-372-2823. Give us a text next. 559-744-4011. And we're here to help.
[00:48:12] Speaker A: Ally, thank you for coming on the show with all of your wisdom.
[00:48:16] Speaker B: Thank you for having me.
[00:48:17] Speaker A: To everyone else out there, I want you to go into the world. I want you to see the change and be the change. And we'll see you next time on Pivotal Change.
