Podcast Summary: So Money with Farnoosh Torabi

Episode: 1773: Ask Farnoosh (New!): Getting an 800+ Credit Score, Investing Pro Tips and Best Budget Tools
Release Date: January 10, 2025

Introduction and Milestone Celebration

In this milestone episode, celebrating the podcast's 10th anniversary, host Farnoosh Torabi reflects on the journey and evolution of "So Money." She reminisces about her early conversations with notable guests like Queen Latifah, Barbara Corcoran, Tim Gunn, and Margaret Cho, highlighting the timeless financial advice shared over the years.

"Financial advice, while it evolves as our lives evolve, there are some timeless pieces of advice that we have been lucky enough to hear and experience on this show." — Farnoosh Torabi [01:18]

Farnoosh emphasizes the show's impact on listeners, sharing that numerous emails have highlighted how the podcast has transformed lives by helping people get out of debt, save more, invest wisely, and negotiate salaries.

Personal Reflections and New Year Intentions

Farnoosh opens up about her personal challenges in 2024, detailing a period of burnout caused by overcommitting to various projects and responsibilities. This wake-up call led her to prioritize a more intentional and quality-focused approach in 2025.

"This year I'm stepping into 2025. Slower, more intentional. I'm prioritizing quality over quantity." — Farnoosh Torabi [02:45]

She invites listeners to share their own financial journeys, aiming to feature everyday people alongside industry leaders to provide relatable and impactful stories.

Recap of Recent Episodes

James Rhee – Red Helicopter Author

Farnoosh discusses her conversation with James Rhee, author of the national bestseller "Red Helicopter." They delved into the synergy between compassion and capitalism, exploring how kindness can drive business growth and innovation.

"Kindness isn't just a virtue, but it's a revolutionary business strategy." — Farnoosh Torabi [05:10]

James also challenged traditional perceptions of mathematics, advocating for its creative potential contrary to common stereotypes.

Anthony O'Neill – Take Your Seat at the Table Author

In her discussion with Anthony O'Neill, Farnoosh explored wealth-building strategies for underserved communities and the importance of representation in finance. The conversation touched on integrating faith with financial philosophies, highlighting diverse perspectives on financial independence.

"Connecting your faith with your financial philosophies can create generational change." — Farnoosh Torabi [09:20]

Reviewer Spotlight: Jake Z from NYC

Farnoosh spotlights Jake Z, a loyal listener, who praises the podcast as "Best in Class" and commends its practical advice tailored for all financial levels.

"Farnoosh offers practical personal financial advice and over the years I keep listening and always learn something new." — Jake Z [13:15]

As a token of appreciation, Jake receives a free 15-minute phone call with Farnoosh and a one-month membership to the So Money Members Club.

Workshop Announcement: Book to Brand

Farnoosh announces her upcoming "Book to Brand" workshop scheduled for Friday, March 7th, in New York City. This event is designed for aspiring authors aiming to write prescriptive nonfiction books, offering guidance on proposals, publishing, and accelerating the book development process.

"This is the ultimate opportunity to take your book idea to the next level, accelerate the process." — Farnoosh Torabi [15:30]

Acknowledgment of LA Wildfires

Turning to current events, Farnoosh expresses her concern for those affected by the devastating wildfires in Los Angeles and surrounding areas. She provides listeners with resources to aid relief efforts:

• Red Cross: redcross.org
• California Community Foundation's Wildfire Relief Fund: calfund.org
• United Way of Greater Los Angeles: unitedway.la
• World Central Kitchen: WCK.org

"Please stay safe, take care of each other and know that there's a whole world rooting for your recovery." — Farnoosh Torabi [18:00]

Mailbag: Listener Questions Answered

1. Carla's Question: Paying Off a Car Loan Early

Question:
Carla, a 30-something with a $1,000 remaining on a $15,000 car loan at 4.75% APR, asks if paying off early would negatively impact her credit score.

Farnoosh's Response:
Farnoosh acknowledges Carla’s desire for financial peace of mind and supports her decision to pay off the loan early, emphasizing the emotional benefits.

"Our emotions matter. If paying off your debt sooner than later gives you peace, then so be it." — Farnoosh Torabi [20:10]

She explains that paying off a term loan like a car loan has a minimal impact on the credit score, primarily affecting the credit mix, which constitutes about 10% of the score. The positive payment history remains on the credit report for up to 10 years, continuing to benefit Carla's credit profile.

"The impact is minimal, so feel good about paying it off and consider redirecting those payments to other financial goals." — Farnoosh Torabi [21:00]

2. Leah's Question: Canceling a Department Store Credit Card

Question:
Leah is contemplating canceling a department store credit card and inquires about the potential impact on her credit score.

Farnoosh's Response:
Farnoosh outlines the factors affecting credit scores when canceling a credit card, focusing on credit utilization and length of credit history.

"Canceling a credit card can increase your credit utilization ratio, which might slightly lower your credit score." — Farnoosh Torabi [22:30]

She advises Leah to assess her overall credit utilization and consider alternatives like freezing the card or negotiating with the issuer to retain the account without fees.

"If you decide to cancel, ensure your credit utilization remains low to mitigate impacts on your score." — Farnoosh Torabi [23:10]

3. Sierra's Question: Investing After Reaching Emergency Fund Goals

Question:
Sierra has achieved a six-month emergency fund and is ready to invest part of her savings using Wealthfront's index funds with a 0.25% annual fee. She seeks advice on the reasonableness of the fee and further investment strategies.

Farnoosh's Response:
Farnoosh congratulates Sierra and confirms that the 0.25% fee is competitive for robo-advisors, which typically offer lower fees compared to human advisors. She cautions about interpreting short-term high returns and encourages a long-term, diversified investment approach.

"A 0.25% annual management fee from Wealthfront is reasonable for the services provided." — Farnoosh Torabi [25:00]

She advises Sierra to maintain a balance between high-yield savings for short-term needs and investing for long-term wealth building, recommending diversified index funds and adjusting portfolio aggressiveness based on age and financial goals.

"Splitting your funds between savings and investments ensures liquidity while building wealth over time." — Farnoosh Torabi [26:10]

4. Chelsea's Question: Budgeting App Recommendation

Question:
Chelsea requests a reminder of the budgeting app Farnoosh mentioned, aiming to organize her finances for 2025.

Farnoosh's Response:
Farnoosh recommends Empower (formerly Personal Capital) as an excellent tool for tracking all financial accounts in one place. She highlights its features, including net worth tracking, spending analysis, and retirement planning tools.

"Empower offers a comprehensive dashboard to monitor your net worth, spending, and investment performance." — Farnoosh Torabi [27:45]

She also suggests alternative apps like Wealthfront for investment tracking and encourages experimenting with different tools to find the best fit for individual budgeting styles.

"Choose a budgeting app that aligns with your proactive financial management needs." — Farnoosh Torabi [28:20]

Conclusion and Final Thoughts

Farnoosh wraps up the episode by summarizing the key topics discussed: managing and paying off debt, the implications of canceling credit cards, balancing savings with investments, and utilizing budgeting tools. She encourages listeners to stay engaged, subscribe, leave reviews, and share the podcast with friends.

"Cheers to all of us wishing you a prosperous, intentional, maybe even a slow at times 2025. Wishing you health, wealth, and the time to enjoy both." — Farnoosh Torabi [30:00]

Key Takeaways

• Debt Management: Paying off loans early can provide emotional relief with minimal impact on credit scores, particularly for term loans like car loans.
• Credit Score Factors: Canceling credit cards affects credit utilization and credit history length, but strategic management can mitigate negative impacts.
• Investing Strategies: Low fees from robo-advisors like Wealthfront are reasonable; long-term, diversified investments are essential for sustainable growth.
• Budgeting Tools: Empower is recommended for comprehensive financial tracking, offering a unified view of all accounts and financial health metrics.

Notable Quotes

• Farnoosh on Timeless Financial Advice:
  "There are some timeless pieces of advice that we have been lucky enough to hear and experience on this show." — [01:18]

• On Prioritizing Quality:
  "I'm prioritizing quality over quantity." — [02:45]

• Carla's Debt-Free Path:
  "You should be proud of the fact that you're tackling this loan and you're almost at the finish line." — [21:00]

• Empower's Comprehensive Tracking:
  "Empower offers a comprehensive dashboard to monitor your net worth, spending, and investment performance." — [27:45]

Join the Conversation:
Farnoosh invites listeners to engage via Instagram at @FarnooshTorabi or email at Farnoosh@SomoneyPodcast.com to share personal stories and questions for future episodes.

Membership Opportunity:
Explore the So Money Members Club at SoMoneyMembers.com for exclusive workshops, resources, and community support.

Note: This summary excludes advertisements and non-content sections to focus on the core discussions and insights shared during the episode.