Vistage CEO: Peer Advisory Groups an Invaluable Tool for SMB Owners

When small business owners have questions about how to propel their business forward, it’s not always clear where to find answers. Consultants are expensive, employees may have other priorities and industry groups may not have resources to help.

Business peer advisory groups may be the solution for some SMB owners. These groups consist of experienced professionals offering their peers a sounding board, a wealth of knowledge and no objective other than helping each other succeed.

As fourth-generation owner and president of 120-year-old Garvin Industries, an electrical manufacturing company headquartered outside Chicago, Bart Garvin struggled to grow his business. Then a friend introduced him to a business peer advisory group called Vistage.

Company revenue was around $4 million when Garvin joined his peer advisor group. Over six years later, it’s almost five times that amount. Garvin, who’s still a member, says the group provides an independent lens through which he views his company.

“Because we’re all human, every business owner or CEO has multiple blind spots,” Garvin explains. “Those blind spots often give us distorted perception of truth inside our company, and it’s all based on our past experiences. [The group] forces me to step outside my business and be intellectually honest about my blind spots so I can change them.”

Lisa Reisman was also introduced to Vistage through a friend and has attended for years. She’s the co-founder and managing director of Azul Partners, a B2B media company in Chicago. For Reisman, the benefits are clear: “Getting outside feedback, having an outside sounding board and being exposed to ideas that are outside of my industry that could be applied to my business and my industry.”

Reisman says she also values the mentorship from group members possessing more experience. For example, many members in her current group have bought and sold companies — something she hasn’t done much of yet — so she’s grateful for their shared insight and perspectives.

Vistage is the largest for-profit company offering business peer advisory groups. The groups are confidential and professionally facilitated by highly trained individuals, often former CEOs. NerdWallet recently interviewed Vistage’s CEO, Leon Shapiro, to learn more about how the company works and why peer advisory groups are so powerful for small business owners in particular.

NerdWallet: How did Vistage get its start?

Shapiro: Vistage started back in 1957 in Wisconsin. A gentleman by name of Robert Nourse was out of work. He got together with a group of executives; they sat around a table and realized the value they brought to each other as business owners, and facilitated that group meeting every month. From there, it really spread throughout the United States, and today is in 16 countries and has almost 20,000 members around the world.

What types of advisory groups does Vistage offer?

All of the groups conceptually do the same thing; all are founded on the same principle. The different flavors, if you will, relate to four segments: first the CEOs, leaders and owners of larger businesses, then CEOs and leaders of smaller businesses — perhaps in the $1 million to $5 million revenue range. The third segment is all of the key direct reports to these executives, then the fourth is all the trusted advisors to the ecosystem; the lawyers, accountants, service providers, etc.

Who facilitates these groups?

They’re all facilitated by what we call our chairs, or chairmen, who are independent contractors that are schooled in the Vistage process; there’s a very particular process. They go through ongoing learning and development at least six times a year, if not more.

We heard Vistage also offers one-on-one mentoring sessions with the chairs; is this available to all members?

It’s available to everyone; it’s priced and packaged into programs differently. So for example, our flagship program for CEOs consists of them attending monthly meetings and also meeting for two hours a month with their chair on an individual, one-on-one basis, so that gives them opportunity to deal with specific, individual issues. It’s also a great opportunity for the chair to work with someone and perhaps encourage them to bring their issue to the group meeting, which is where all the power of Vistage happens.

Can someone stay in a Vistage group indefinitely?

There is a natural graduation point, typically when you sell your business, retire, or if you’re a CEO and you move on to do something else. But our average member sticks around for over five years. And if they make it past the first year, they typically stick around seven and a half years, so they’re very long-term members in the group.

What are some of the benefits small business owners can experience from meeting with a Vistage group?

As a CEO or small business owner, you really don’t have any place in the world to go to get objective advice given to you by people who don’t have any interest or connection in the outcome. So from your management team to your lawyer to your accountant to your family, everyone you interact with does so in a very caring and positive way, but has a connection to the outcome. A peer advisor group is the one place where a trusted group of 15 of your peers whose only vested interest is in helping you become a better leader, solve your business problems, take advantage of opportunities, in a very direct and open way. They don’t hold any punches, but at the same time, they’re there for you as a support network.

Really, you feel accountable to them and they feel accountable back to you. You’re likely to use this information, the benefits of their experience. I mean, 15 other people with 10, 20 30 years of experience under their belts — you’re much more likely to use that in a meaningful way and feel accountable to the group. And in fact, part of the process is that when an issue is processed or the group helps you, you commit to a set of actions that you choose, and commit to bringing it back to the group and letting them know what you’ve done. It tends to be very, very effective.

Do small business owners often experience quantifiable benefits from participating?

Absolutely. The performance of companies in Vistage far outweigh the performance of their peers. [Vistage later provided us with results of a survey by Dun & Bradstreet showing Vistage member companies outpacing annual growth at comparable companies by more than six percentage points, over a four-year period.]

What are other member benefits in addition to peer meetings and one-on-one sessions?

At every monthly meeting, half of the day is dedicated towards an expert speaker. We have close to 1,000 experts in a speakers bureau, so groups book these speakers. Those are experts on very specific business issues—marketing, how to deliver presentations, to work/life balance issues. Every year in each region we hold events for the entire region…we put together a full day event with expert speakers, content, and interaction between members. There’s also an online content library, webinars and more.

There are many other smaller, niche peer advisory groups available. What makes Vistage a better choice?

I think there is value to certain niche groups. They do bring very different value than Vistage brings. The magic of Vistage is in a 58-year-old, tried and true process with chairs that are incredibly experienced and continue to develop and hone their skills every year, year in and year out. Really that complete perspective coupled with a very rigorous process in safe environment of a group has proved to be unbelievably successful.

We also are establishing membership networks for some of the very reasons that people have other needs. For example, people in the manufacturing industry—we have probably 1,000 plus members in Vistage that are in manufacturing and need to interact with other people in the manufacturing industry on industry specific issues that are separate from being a CEO and just leading company. So we facilitate those member networks as well. Those are both online and in person. For example, in Chicago at a big manufacturing event several months ago, we had close to 100 Vistage attendees there who got together at the much larger manufacturing event.

Must members meet certain criteria to join?

Yes, they do. There’s a selection interview process that takes place, because at the end of the day, everyone needs to make sure that there’s a fit between the prospective member, the existing chair and the existing group. You wouldn’t want 14 CEOs of $100 million businesses and someone who’s just done a start-up and has one person under them. So there’s a very good process of mutual selection.

What are the costs associated with joining?

Members pay a monthly fee that ranges between $1,000 to $1,300. Most people think of it as an annual ongoing fee.

What’s your best advice for small business owners?

Find a group of peers; it’s the most powerful thing you have going for you as a leader. Vistage isn’t so much a place you go to have your questions answered, but rather a place you go to have your answers questioned.

For more information about how to start and run a business, visit NerdWallet’s Small Business Guide. For free, personalized answers to questions about starting and financing your business, visit the Small Business section of NerdWallet’s Ask an Advisor page.

Emily Starbuck Crone is a staff writer covering personal finance for NerdWallet. Follow her on Twitter @emstarbuck and on Google+

---

Image via iStock.

Source Article http://ift.tt/1y39EC7

Read More

Google Debuts ‘Project Fi’ Wireless Service

Google on Wednesday introduced Project Fi, its own wireless service that, after a small monthly fee, will charge users based solely on how much data they use each month.

The program, which will at first be limited to owners of Google’s Nexus 6 smartphones, is a partnership between the technology giant and established wireless carriers Sprint and T-Mobile, which have agreed to carry the mobile traffic Project Fi creates.

The service will be able to switch automatically between Sprint and T-Mobile, depending on which has the strongest signal at any given time and place.

Project Fi will cost a flat rate of $20 per month, and $10 for each gigabyte of data a customer uses.

“As mobile devices continually improve how you connect to people and information, it’s important that wireless connectivity and communication keep pace and be fast everywhere, easy to use, and accessible to everyone,” Google Vice President Nick Fox said in a blog post. 

Fox wrote that in addition to Sprint and T-Mobile connectivity, the Project Fi network incorporates “more than a million free, open Wi-Fi hotspots we’ve verified as fast and reliable.”

The $20 flat rate will cover talk, text, Wi-Fi tethering, and international coverage in more than 120 countries. Users will then select the number of gigabytes of data they expect to use and pay $10 for each. They’ll receive a refund each month if they use less.

Many existing U.S. wireless plans require consumers to pay for a set amount of data that rolls over at the end of each month. In many cases, that means people are paying for data they never use.

People interested in trying out the plan — which, again, is going to require a Nexus 6 at least for now — may request an invitation to take part in its Early Access Program. They should first check to make sure they live somewhere that Project Fi has coverage.

Google Senior Vice President Sundar Pichai has said the company expects its wireless project to be a relatively limited experiment, not one aimed at disrupting the wireless industry (which may explain Sprint and T-Mobile’s reported willingness to play along).

“While Google may not be targeting huge numbers of subscribers, their entry into this market is very important, because it has the potential to disrupt the wireless industry in much the same way Google Fiber prompted changes in the cable and broadband industries,” Rajeev Chand, head of research at investment bank Rutberg & Company, told The Wall Street Journal.

Fiber promises super-fast 1-gigabit per second speeds. Google Fiber is active in three metro areas and was announced for four more earlier this year, with others on the way. As it rolls out, other Internet providers have begun making their own high-speed options available.

Doug Gross is a staff writer covering personal finance for NerdWallet. Follow him on Twitter @doug_gross and on Google+.

---

Image via iStock.

 

Source Article http://ift.tt/1y39EC7

Read More

Small Business Success Story: Hot Dang Conquers Growth Challenges

It started with an outrageous challenge. Martha Pincoffs, a trained chef and cooking instructor in Austin, Texas, was dared by her partner to eat every meal at home — made with local ingredients — for an entire year. The couple expected to save money and learn more about homegrown food, but Pincoffs had no idea that a concoction whipped up during this yearlong experiment would later end up in hundreds of grocery stores nationwide.

That concoction — a humble, grain-based patty Pincoffs assembled on the fly in her kitchen — launched her on a journey filled with many challenges: spending long, non-lucrative hours at the farmers market, learning to forge strategic partnerships, conquering production challenges and understanding how to navigate the retail grocery world.

Looking back, Pincoffs says overcoming these hurdles allowed her to fulfill her mission: “I wanted clean food for the masses.”

An unexpected product

During her year of culinary austerity, Pincoffs spent lots of time at farmers markets and grocery stores. She says she found herself falling in love with the small food business, becoming intrigued with making consumer packaged goods, and admiring successful local ventures like Dai Due and Salt & Time.

Hot Dang founder Martha Pincoffs.

Since Pincoffs and her partner weren’t dining out, their home became a social hub. One day, not in the mood to go to the market yet again, Pincoffs experimented with ingredients she had on hand and ended up with a grain-based veggie burger. She and her partner weren’t vegetarian, but she realized there was nothing like it commercially available. It became the most requested item by their frequent guests, and it occurred to her that other people might enjoy her veggie burgers, too.

“It’s made of all recognizable ingredients, and it’s something I really believed in, because at the time, a lot of the competition had stuff I didn’t recognize and texturized vegetable protein, which is a really processed version of soy,” Pincoffs says. She named the product Hot Dang, and she encourages people to eat it in more creative ways than just as a burger substitute (think crumbled on a salad or chopped up in a frittata).

On a Saturday morning in April 2011, Pincoffs awoke at the crack of dawn and spent hours preparing for her debut at Austin’s Sunset Valley Farmers Market. She describes the experience as backbreaking: Starting three to four hours before the market opened, she prepared her patties by hand at home and gathered a glut of supplies. Pincoffs then arrived and worked long hours to set up the booth, operate her station and break it down at the end — all for less than a livable wage, she says. Nevertheless, it was an ideal place to start because she found a curious customer base willing to try new things and received direct feedback on her product. Locals tried it, and they liked it. A few months later, Pincoffs was able to land her product in several Austin grocery stores.

Strategic partnerships needed

In the early stages of the business, it was a one-woman show. “I was bootstrapping it, so I was paying for it, making all the product, doing the demos and making deliveries,” Pincoffs says. She also had a life partner and two small kids, and all of her commitments eventually became too much to handle, she says.

“It forced me to look outside and give up some of the company in order to be able to get the vision further,” she says. In 2012, she found a business partner, Tim Murphy, who had valuable industry knowledge, including experience with General Mills and working with Naked Juice when it sold to Pepsi. Pincoffs says bringing him on board was by far her best move yet.

Pincoffs and Murphy took the first year together to redesign the product packaging, increase their offerings and improve processes on the back end, such as making production more efficient. Pincoffs says the operation had to be tightened up before the business could really grow. Though the company officially started four years ago, 90% of the growth has occurred in the past year as she and Murphy have optimized everything together.

Initial production challenges

When Pincoffs started her business, she made every veggie patty by hand. As the business grew, a key challenge was streamlining production and moving from her home kitchen to an actual manufacturing facility. Although Austin is quickly growing, it’s still a midsize metro area, and Pincoffs found that it lacked the infrastructure and support she needed to scale her product.

“We wound up going to Boulder (Colorado) for six to nine months, making our product there, because they had a manufacturing incubator that basically had to make our product at scale,” Pincoffs explains. “Then we could bring it back to right outside of Austin.” Her products are now produced at a facility in Buda, a small town a few miles south of Austin.

Taking a product from a farmers market booth to grocery store freezers is no easy task. “Getting into big grocery stores has been a mix of persistence, well-placed introductions and having brokers working for us,” Pincoffs says.

Making the jump

Her first goal was to get into Whole Foods Market, a health-oriented supermarket chain headquartered in Austin. She says Whole Foods has an unusual decentralized system, so a company can get into one store at a time and learn how the system works. “It gives the stores room to really embrace the communities they are in; they are great about scouting local products for their regions,” Pincoffs explains. Whole Foods employs a network of “local foragers” to find such products.

Hot Dang encourages consumers to think of its products as more than simply burger substitutes.

How does someone get a product into Whole Foods? Lynda Berrios, Southwest local forager for Whole Foods, says the first step for small suppliers is to get in touch with the forager responsible for their area, like herself. After making the connection, suppliers go through a vetting and review process. “We will look at everything from ingredients, sourcing, packaging, cost, pricing and take a tour their facility or manufacturing space,” Berrios says. “Sometimes that process can take a matter of weeks or more than a year depending on how ready the supplier is for retail.”

Berrios adds that Whole Foods has very high standards for what ultimately makes the cut; this includes such things as adhering to animal welfare standards and requiring that items be free of artificial flavors, colors and preservatives. “Each category has its own set of deep and broad standards specific to that type of product,” she explains.

Hot Dang met the rigorous standards, and through Pincoffs’ own efforts, she got into all Austin Whole Foods locations. After her products performed well, she brought in a broker, Green Spoon Sales. This company presented Hot Dang to the rest of Whole Foods’ Southwest region and the Rocky Mountain region and successfully landed her products in those stores.

Not every business can expand into new markets so quickly. “We gauge that readiness on several factors,” Berrios explains, “including their production capacity, strong sales compared to similar products in that store, active demo support and the relationships they build with store buyers and team members.” This expansion can also be financially difficult for small operations, so Whole Foods offers Local Producer Loans — low-interest loans to small suppliers who need cash to grow their business.

Going from farmers markets or direct sales into wholesale retail is a big leap for small food suppliers, Berrios says. While visibility and brand awareness are huge perks, it’s a challenge to compete with products that may have more of a following — especially national brands. To overcome this hurdle, “we offer our small suppliers a lot of in-store signage through our local supplier profiles, the opportunity to participate in events and vendor fairs, and we are always looking for creative ways to promote our local suppliers via in-store events, pop-ups, community education classes or opportunities we might dream up together,” Berrios says.

Pincoffs next aimed to get into HEB, one of the largest grocery chains in Texas. The process there was quite different, she says. She and Murphy went on a sales call with HEB’s frozen foods buyer, thinking they might get into 40 stores if they were lucky. The meeting was a success, and they found out they got into 150 stores. She notes that it was hard to fulfill the first few purchase orders while they were in the midst of transitioning manufacturers, but once they got into their new facility, they’ve been able to comfortably fill all orders — and grow with them.

Hot Dang products are now sold in 300 stores in 14 states, with eight more states on the horizon.

Supportive local community

Pincoffs credits some of her success to being based in Austin, a supportive community full of creative food entrepreneurs. “There are wonderful people willing to collaborate, and it feels like everybody’s in it to see everybody else succeed,” Pincoffs says. “It makes a huge difference to have people ahead of you willing to take time and encourage you,” she says.

This camaraderie led her to create a group called ATX Makers Club, made up of locals who produce consumer packaged goods. “It’s a bunch of different food entrepreneurs that get together once a month and troubleshoot challenges and opportunities of growing a small food business, and it’s been really helpful,” she says.

For more information about how to start and run a business, visit NerdWallet’s Small Business Guide. For free, personalized answers to questions about starting and financing your business, visit the Small Business section of NerdWallet’s Ask an Advisor page.

Emily Starbuck Crone is a staff writer covering personal finance for NerdWallet. Follow her on Twitter @emstarbuck and on Google+.

---

Images courtesy of Hot Dang. 

 

Source Article http://ift.tt/1y39EC7

Read More

Small Business Success Story: Blossom Foods Blooms With Bank of America

Sue Adams got the idea to launch Blossom Foods when she worked as a speech pathologist in San Francisco.  Many of her patients had a difficult time swallowing food — a condition known as dysphagia — and the worst parts of the day were mealtimes.

Adams recalls how her patients could no longer chew and swallow their favorite meals, and in many cases, their only options were unappealing plates of mush.  “Every time you saw a patient who had an issue with swallowing, you saw that they had to downgrade their diet.  These balls of beige would show up on their plates and they would always ask, ‘What is this?’ because it didn’t seem like real food,”  Adams says.  Many of her patients literally couldn’t stomach what was on the menu, even though the nutrients were essential to their health.

Adams decided to launch a company that would provide tasty breakfasts, lunches and dinners for people with dysphagia.  The condition affects one in seven people, and that figure could increase as the population ages, which suggested she’d have a strong market.

Blossom Foods was born in 2006 and Adams began testing recipes and assembling taste panels.  By 2008, she was selling pureed, ground and chopped entrees to local hospitals.  “I quit my job and my former employer was my first client,” she says. Today, Blossom Foods sells entrees like turkey, chicken enchiladas and pancakes with eggs.

Financing taste tests

When Blossom Foods first launched, Adams and her husband dipped into their savings to get the business off the ground.  She didn’t hire her first employee until about three years after they started selling food, she says.  Adams hired a chef and also moved into a kitchen that could accommodate USDA inspections.  Word got around to local hospitals and her business grew.

With demand increasing, Adams knew that she’d need financing help to get better kitchen equipment.  A specialized meat grinder would cost several thousand dollars, and a larger capacity freezer could cost even more.  But Adams predicted that such equipment additions would allow Blossom Foods to increase its business volume up to three times.

Finding a financial partner

At first, Adams didn’t consider applying for financing at her regular institution, Bank of America, even though she and her family had been customers for several years. Her perception was that big banks weren’t for small business.

Adams looked first into partnering with angel investors, but couldn’t seem to find the right fit. She hoped to get in touch with someone who could partner with her and provide entrepreneurial expertise, but she never met that person, she says. After not finding what she was looking for from other avenues, Adams considered her traditional bank.

It’s a smart move for entrepreneurs to check with their home bank to see what opportunities may exist, says Desi Stark, senior vice president for small business at Bank of America in San Francisco. “That’s pretty much how our small business banking channel was born,” she says.  “We started listening to small businesses and we started hearing people asking for that attention.  We ended up hiring experts in the field,” she says.

The ideal business owner is someone who starts a business with an intention to grow, somebody ambitious, Stark says.  But it can take time for a small business to get a loan from a traditional bank. “There are a lot of regulations that we have to abide by,” Stark says.  “We look at how the business shows profitability.  We look at tax returns and revenue, and we also look at future projects and business forecasts.  We have to understand the whole story.  It’s not just the numbers.”

Even after financing is secured, it’s important to continue the banking relationship, Stark says.  “It’s not just about funding.  Business owners also need to know how to maximize their dollar, and how they can make their business grow,” she says.  “Bankers can go into the field, sit down and have a conversation about how you run your business and ask what you need.”

After meeting with Bank of America, Adams opened a business credit card account with a $35,000 credit line. She says it gives her the flexibility to purchase kitchen equipment and expand her operations. Today, Blossom Foods serves close to 80 hospitals, medical offices and rehabilitation centers. “We’ve been profitable the past three years, and we’re growing,” Adams says. She has plans to continue to grow and serve medical centers across the country.

Tips for small business owners

Before you seek outside funding, invest your money in your business, Adams says.  Even after Blossom Foods became profitable, Adams says she reinvested her money in her business for several years instead of buying fancy cars or taking exotic vacations. “When you self-fund your business, you do need to be willing to make the tough choices about what you want to do with your company,” she says.

It’s also important to stay on top of advancements in your industry. Adams keeps her speech pathology credentials current, which she says helps her understand patient-related issues and puts her in a better position to respond to medical changes or breakthroughs that affect her clients.

When you are ready to seek financing, make an effort to develop a relationship with your local banker, Stark says.  With a relationship, you get advice and you get someone who can talk to you and help you know the right questions to ask, as well as how to answer them, she says.  “Sometimes it’s not just numbers. We also want to understand what you’re thinking.  Do you want to open just one store, or do you have expansion plans?” Stark says.

When you have an existing business relationship with your bank, it can be very helpful when it comes time to apply for future financing, including lines of credit and business loans.  Blossom Foods is one such company that has taken the first step in what could be a long and prosperous relationship.

For more information about how to start and run a business, visit NerdWallet’s Small Business Guide. For free, personalized answers to questions about starting and financing your business, visit the Small Business section of NerdWallet’s Ask an Advisor page.

Margarette Burnette is a staff writer covering personal finance for NerdWallet. Follow her on Twitter @margarette and on Google+.

---

Image by Margarette Burnette/NerdWallet.

Source Article http://ift.tt/1y39EC7

Read More

Trek Recalls Nearly 1 Million Bicycles

Major bicycle maker Trek has recalled nearly 1 million bikes over a problem with the braking system. That problem reportedly led to accidents that left one rider paralyzed.

The recall covers about 900,000 bikes in the United States and another 98,000 in Canada.

According to the recall, the bicycles have a quick-release lever on the front wheel hub which, if improperly adjusted or left open, can come into contact with the disc-brake assembly, causing the front wheel to lock up or fall off.

The Trek bikes with the system were sold from about September 1999 to April 2015, for prices ranging from $480 to $1,650.

Trek says it is aware of three accidents related to the problem. One resulted in a rider becoming paralyzed, while injuries in the other two were less severe — one leading to facial injuries and the other a fractured wrist.

Owners are advised to stop using the bikes and take them to an authorized Trek retailer to get a new quick-release installed on the front wheel. Trek will give everyone who participates a $20 coupon toward merchandise from Trek-owned Bontrager, a line of products including helmets, seats, tires and cycling shoes.

Consumers with questions may contact Trek at 800-373-4594  or online at www.trekbikes.com. Click on “Safety & Recalls” at the bottom of the page for more information.

Doug Gross is a staff writer covering personal finance for NerdWallet. Follow him on Twitter @doug_gross and on Google+.

---

Image of recalled Trek model via Consumer Product Safety Commission. 

 

Source Article http://ift.tt/1y39EC7

Read More

Google Rolling Out Its Own Wireless Service This Week

Google is expected to unveil its own wireless service in the United States this week, putting the tech giant in at least limited competition with the likes of AT&T, Verizon, T-Mobile and Sprint.

Google’s wireless service could debut as early as Wednesday, the Wall Street Journal is reporting.

What will make it stand out — aside from association with Google’s existing expanse of products across mobile and the Web — is a model through which users would pay only for the amount of data they actually use.

As the Journal notes, many existing U.S. wireless plans require consumers to pay for a set amount of data that rolls over at the end of each month. In many cases, that means people are paying for data they never use.

Google’s wireless service is expected to run on networks owned by Sprint and T-Mobile, which have agreed to carry the traffic, according to “people familiar with the matter.” The service will be able to switch automatically between Sprint and T-Mobile, depending on which has the strongest signal at any given time and place.

The Journal says that, initially, the service only will be available for Google’s new Nexus 6 smartphones. In the past, Google has introduced services that only work with its own products before rolling them out more widely.

In March, Google’s Sundar Pichai, a senior vice president, said the wireless network was months away from release and that it would be a relatively limited experiment, not one aimed at disrupting the wireless industry (which may explain Sprint and T-Mobile’s reported willingness to play along).

“While Google may not be targeting huge numbers of subscribers, their entry into this market is very important, because it has the potential to disrupt the wireless industry in much the same way Google Fiber prompted changes in the cable and broadband industries,” Rajeev Chand, head of research at investment bank Rutberg & Company, told the Wall Street Journal.

Fiber promises super-fast 1-gigabit per second speeds. Google Fiber is active in three metro areas and was announced for four more earlier this year, with others on the way. As it had rolled out, other Internet providers have begun making their own high-speed options available.

Doug Gross is a staff writer covering personal finance for NerdWallet. Follow him on Twitter @doug_gross and on Google+.

---

Image via iStock.

Source Article http://ift.tt/1y39EC7

Read More

How Student Loan Default Can Hurt You, and Someone Else

The tower of debt that’s often attached to a college degree can be intimidating. But when it comes to paying back student loans, borrowers must put their fears aside and attack debt systematically or face potentially long-lasting credit consequences. Here are five things to expect should you not pay your student debt:

1. Your FICO score will plummet

Several factors go into calculating your FICO score, but payment history is the most important. Not paying your student loans on time hurts your payment history record, and hurting your payment history record lowers your FICO score, plain and simple. As a borrower, you want your FICO score within a reasonable range, and having a higher score is never going to burden you in the credit approval process.

 2. Your credit report will be tarnished for 7 years

Applying for a car loan, a mortgage or even more student debt can all get harder when students don’t make their loan payments. Credit reports are like memory-foam mattresses: If you alter their shape, they’ll eventually bounce back — but it might take a while. A “while” in this case generally means seven years, the length of time late payments can stay on your credit report, affecting your creditworthiness the whole time.

 3. You won’t be able to get other loans

This one almost goes without saying. If you’re already not paying off an existing loan, new lenders will likely hesitate when considering you for a new loan. On the other hand, if your payment history is untarnished, you may qualify for lower interest rates, ultimately keeping more money in your pocket over time.

Nerd Tip: Overborrowing can be easy to do and hard to resolve. As a rule of thumb, try to keep your total loan amount less than your expected first-year salary after graduation.

4. You may not be able to rent an apartment

Running a credit check is standard procedure for landlords during the renter-approval process, and if you’re the type of person who fails to pay debts on time, landlords will probably assume you’ll do the same when rent is due. Not paying student loans can result in a new landlord requiring a higher deposit at the beginning of a lease. In more competitive rental markets, it might mean missing out on an apartment entirely.

 5. Your parents’ credit may suffer (if they cosigned)

If you have a cosigner on your student loans, the decisions you make affect more than just you. Most students taking out college loans do so with the help of a parent. But by cosigning, parents are making themselves fully responsible for the debt. If a student stops making payments, parental credit can suffer just as much as the student’s.

The moral of the story is to pay your student loans on time. Remember, bankruptcy can’t usually erase student loans, and issuers can put liens on bank accounts of those borrowers who refuse to pay. If making your student loan payment is literally impossible, deferment or forbearance may be options to consider as they generally don’t negatively impact your credit score. Either way, it’s best to plan ahead and design a payback strategy that works best for you.

Kevin Cash is a staff writer covering credit cards and consumer credit for NerdWallet. Follow him on Google+.

---

Image via iStock.

Source Article http://ift.tt/1y39EC7

Read More