$650,000 or an 800 FICO?
Once again the age-old question re-emerges online. This time I have an answer for it.
Every year without fail, social media presents us with a question that regardless of race, gender, and societal constructs cuts through the noise of social media and gets our attention. The common denominator is money, and it unites and divides us all the same. We need it.
While I don’t find social media to be a hub of perplexity, I’m occasionally struck by a question and find myself unsure of which I would choose. The question of the month is whether people would choose to have an 800 credit score or have $600,000 liquid cash.
You’ve undoubtedly heard people from Robert Kiyosaki to Grant Cardone praise using debt to gain access to real estate and speed up their business, and in the same vein heard Dave Ramsey condemn having debt and praise having money over a higher credit score.
Before you begin to post links on the amount of Americans siphoning funds from the government or lecture me on the rate of financial literacy in our country, I will say this: The choices people make depend on what they know and what access to they have to resources.
While people can find access to the internet and look for articles and videos, not everyone has the benefit of accessing people with the knowledge to circumvent the red tape that accompanies both choices.
Option A: $600,000
There are few things I think middle America would prefer more than cash in their hands right now. Most of the anxiety, anger, and grief the average person is experienced could be solved with more than the universally promoted idea of six months worth of expenses, so I’m relatively sure that if you asked people would they prefer a near-perfect score on their credit reports or a boatload of money they would prefer the latter. But that’s just me.
Option B: 800 Credit Score
There are a significant amount of young Americans whose salaries are competitive but find themselves denied access to housing and business loans despite significant income and savings because of their score. While money is a welcomed friend to have, a majority of the long-term investments people gained has come from having a top credit score.
An excellent credit score is a safer and universally accepted means of being able to buy property, obtain assets from your company, and decrease the chance of having the authorities investigating your finances. So in the eyes of many who aspire to have long term investments to sustain their wellbeing, credit is a much more vital tool to have. Better in the eyes of some to have a rifle than have a shotgun.
Ultimately, it is essential to have both, but for those thinking long term, cash is trash when compared to a systemic tool that is used to determine the value of someone’s life. Where you live, how you’re perceived by potential employers, and your value as a human are all determined by three numbers. Good luck!