Sunshine Smith-Williams was raised in Jamaica Queens, New York by a single mother, who struggled to make ends meet. Growing up in multiple impoverished housing projects with dim hope of the future, she utilized education as a weapon to overcome poverty. Today, she is a philanthropist, community & youth advocate, best selling author, and serial entrepreneur who owns or operates: Sunny Legal Realty LLC, Shared Living Residential LLC. (homeless shelters), Sunny Side-Up Productions & Films, Ambitious Beauty Collection, and Sunny Side-Up Publications just to name a few. Her book titles are Sunny 101: The 10 Commandments of a Boss Chick, Wine and Wealth Series (Vol. 1 -Credit & Vol. 2 – Entrepreneurship) and others. Smith-Williams resides in Long Island with her husband and business partner, and their thirteen-year-old son.
Why is credit, particularly good credit, so vital to wealth building?
Good credit allows you to leverage your buying power by saving. For example: when borrowing, low-interest rates are crucial because the money you borrow will be more affordable and allows you to save more of your after-tax income. Saving more means, you’ll have more money to invest in other fruitful opportunities that can help you build more wealth.
Why do you think credit education was rarely taught within African American families and households?
In most African American households, the resources are not there. You may have been taught to get a “good” government job with benefits. Many times, we started late with getting knowledge, and as a result, horrible decision making, poor money management led to tons of debt, bankruptcies and the list goes on. After attending college, I realized you spend more time working to pay off school debts than you do to obtain assets. Making money alone doesn’t make you rich, it’s how you invest money. Therefore, it is important to start early when teaching your children about credit and incentivize good behavior that will help them build credit when they are ready.
Sunny, what was your passion to help people of color and those in underserved communities understand the “system” of how credit works?
My passion came out of my own experiences here is why becoming a wealth educator became so important to me. In 2005, I attended N.Y. Real Estate Institution in Manhattan, it was there that I received my Real Estate, Appraisal, and Property Management education. I then received certifications and licenses from NYS Division of Licensing Services.
After I got my license, a broker sponsored me. Because of my networking and professionalism my clientele was broad. I sold houses and made my first million within a year. I was living the life, or so I thought. I was squandering my money on lavish trips, luxury vehicles, jewelry, fur coats, an NYC loft that I rented as my primary residence to get away from a toxic relationship. The real estate market crashed three years later because it was flooded with over appraised homes, fraudulent lenders, and greedy investors and brokers. After the market crashed, my income plummeted. I could not afford my lifestyle anymore and had to file for bankruptcy. I went from being a self-made millionaire at age 24 to sit in a cubicle on a 9-5 dead-end job. Although humbled and grateful for the day job, I regretted not taking some of the money made and invested properly. I had no idea that I was supposed to diversify my financial portfolio. No one pulled me to the side and taught me how to invest, start a few businesses or buy properties. I take full accountability for my financial ignorance and after research realized there are others like myself who wished they could have known better.
I became ambitious because I saw my single mother struggle and she never knew about credit until I added her on my first credit card in 1997. Growing up in NYC housing authority with a survival mentality, my motivation and passion came from a place of being poor, poor financial choices, and a lack of wisdom. Preparation and opportunities will give you success but without tools, you will fail.
Why do you think that credit and financial education is completely omitted in high school, colleges and universities?
Credit and financial education are completely omitted and disregarded in high school and college universities because the mass goal is to keep individuals uneducated about the very same things that can keep the rich—richer! In October 2010, before I started my financial firm Sunny Legal Realty LLC, I conducted some research regarding debt in America. The bottom line is the U.S government wants you in debt. I also decided to do a poll at a previous job to gather what my colleges, peers, and I may have lacked, experienced, or had in common regarding financial literacy. I was a paralegal at a law firm for a few years before I departed to start my own firm. Before I left, I took a poll at my corporate job which was multi-cultural.
My poll questions were “How old were you when you knew how to balance a checkbook?” “Do you know what a FICO score is?” “Do you or anyone you know own a home?” The answers received were heart-wrenching. At that moment, I realized there was a need for the firm I was about to start. My mindset is finding solutions to problems. Recently, I’ve changed the narrative of financial education being omitted in schools. In 2019, I collaborated with a program called Pathways To Graduation and taught high school seniors from my financial book titled Wine & Wealth Volume I Credit and Wine & Wealth Volume II Entrepreneurship subtitled the importance of credit, how it works, how to improve, and how to protect it. It also teaches students how to start a business, how to structure their business, build business credit and how to obtain business funding. My financial curriculum “Building Wealth” has been accepted as an elective course in some Queens and Brooklyn school districts. My workshops teach credit education, entrepreneurship, and Investing.
How young do you think that our children/youth should be introduced to the concepts of proper credit building?
Credit building is so important. You should start discussing and introducing concepts of credit building by 12. My son knows what it takes to be an entrepreneur, how to start a business and the importance of credit, and how it works. Next year on his 13th birthday, I will be adding him as an authorized user on my credit cards. Adding your child as an authorized user a great way to help them build credit, and in some cases, your child only needs to be 13 to 15 years old to qualify (read about the minimum age for each card issuer.) Before you add your child, call your card issuer to confirm that their activity will be reported to the credit bureaus (most major issuers do). Otherwise, it will have no benefit to helping them establish a credit history. Once they are on your account as an authorized user, they can use your card independently for purchases online and while they are out and about. This is a good way to know implement restrictions and education on spending. At the end of the month, walk them through the billing statement and talk about what it means to repay, what happens if you carry a balance and pay interest, what the future consequences are if you don’t pay that bill and it impacts your credit. This conditions him/her for responsibility.
Can you provide some advice and examples on the benefits of having good credit?
Here is some rock-solid advice that I can offer:
- Save money for an emergency fund.
- Pay down your debt.
- Do not spend more than can you afford.
- Keep your credit scores as high as possible.
Having a good credit score comes with many advantages, including:
- Significant savings on interest rates on big-ticket loans.
- Better terms and availability on loan products.
- Access to the best credit cards.
- Insurance discounts.
- More housing options.
- Security deposit waivers on utilities.
Sunny, what are five strategies that can be used to start the credit repair process?
- Payment history: This is typically one of the most important factors—roughly 30% to 35%—in determining your score in most scoring models. Late or missed payments bring your credit score down. Conversely, if you have a long history of paying your bills on time, your score will generally be higher. The most important thing you can do to boost your credit scores is to pay all your bills on time every month. If you establish a pattern of doing this over time, your scores will improve.
- Credit utilization ratio: This is the amount of revolving credit you’re actively using compared with the amount of credit available to you, based on your credit card limits. The lower the ratio, the higher your credit score. Aim to keep your utilization ratio under 30%, but for the best scores, you’ll want to keep it under 10%.
- Credit history: Most scoring models also look at how long you have actively used credit. They typically look at the average age of all your open accounts. The longer your credit history, the better it is for your score. You can’t do much about this one, other than let time do its thing.
- Credit mix: Scoring models also take into account what types of credit you have, including installment loans and credit cards. To improve your credit score, aim for a good mix of different types of credit.
- Hard inquiries: When you apply for a new credit card or another kind of loan, the lender will request your credit report. That is considered a “hard inquiry”—and too many can lower your score slightly. However, multiple inquiries of the same kind—if you’re shopping for a car loan, for example—during the same period are often treated as one inquiry. The impact of hard inquiries goes down the older the inquiries are.
Do you have any final remarks regarding this subject? More important than how hard you work for your money, is how you put your money to work for you. Diversify your financial portfolio. Below are some of my current investments:
- Royalty incomes (My books, workshops and curriculums.)
- Invest in Real Estate. (Capital Gains and Rental income.)
- Invest in commodities.
Here are four basic ways to invest in commodities:
- Invest directly in the commodity. If you want to invest by physically buying a commodity, one advantage is that you don’t have to go through a third party.
- Invest in futures contracts. Invest in commodity stocks. Invest in commodity ETFs and mutual funds.
- Invest in fine art.
- Invest in cryptocurrencies.
The goal is to create as many income streams as possible and that includes residual, passive, dividend, royalty, and profit income. Sunshine Smith-Williams is a board-certified credit specialist and wealth educator whose duty is to teach how credit works, how to protect it, and how to improve it. She believes that real education is global and cultural studies such as understanding the difference between currency, commodities, and trading. In addition, learning how money works, balancing a checkbook, monitoring your finances, budgeting, investing, and building generational wealth.For more information on how to connect with the multi business owner and educator www.sunshinesmithwilliams.com