Beware Of Carrying Credit Card Balances!

Don't Carry Credit Card Balance

I speak a lot about signing up for tons of different credit cards with big sign-up bonuses for obtaining points/miles which can be used for free or near free travel and experiences.  However, make no mistake in thinking that I mean you should carry balances on credit cards; especially on purchases which are liabilities (things which don't put money in your pocket).  Carrying a small balance of perhaps $500 to $1000 is not so bad considering your monthly cash-flow can wipe that amount away in 3 months or less, if no new purchases where added to the balance, but if balances swell month over month, this is downright dangerous to your financial well-being.

Oh, Instant Gratification

Credit is so widely available that it is hard to pass up using it to satisfy our urge to instantly gratify our desires for stuff.  I'm not knocking buying stuff on credit at all especially if you can afford it, and by afford it, I mean pay off the balance in full each month with either savings or monthly cash-flow.  If not, you should tread lightly using credit for your discretionary spending because the Annual Percentage Rate (APR) on that credit is usually pretty high.  Take for example some of the credit cards I recommend like the Chase Freedom Unlimited or Chase Sapphire Preferred, they have 15.74% - 24.49% variable APR.  These APR don't get much lower under other credit cards either.

Typical Interest Charge Calculation

The typical way in which credit cards charge interest is like below:

• (APR ÷ 365) = Daily Periodic Rate (DPR)
• (DPR × 31) × balance = Interest charge 

So, using a $1000 balance with 15.74% APR in the formula, we get 
 (((15.74 ÷ 100) ÷ 365) × 31) × $1000 = $13.37.

Your new balance is $1013.37.  You might say oh $13.37 is not that bad, but look what happens next month if you weren't to pay down this balance quickly 

• (((15.74 ÷ 100) ÷ 365) × 31) × $1013.37 = $13.54 
• (((15.74 ÷ 100) ÷ 365) × 31) × $1026.91 = $13.72
• (((15.74 ÷ 100) ÷ 365) × 31) × $1040.63 = $13.91
• (((15.74 ÷ 100) ÷ 365) × 31) × $1054.54 = $14.10
• ...

Note: I don't include minimum payment made for added effect of compounding 

The interest on the balance begins to compound at this high rate and, in addition, if you continue to add to the balance, this can get out of hand extremely quick.  Paying the minimum of $25 can mean paying $426.84 in interest over 58 months.  No bueno😞!

Minimum Payment Calculator

Wealth Transfer

The banks are making exorbitant amount of money when you slip up even a little.  Contrast these rates by the 9.8% average annualized total return of the S&P 500 over the last 90 years.  Even if you were eager to do something else which I suggest which is invest, it would make little sense to do so because the interest rates on credit would outpace gains from stock market or other investments as well.  Unfortunately, the wealth which you could be building for yourself and your family is being transferred to JP Morgan Chase, Citi, Wells Fargo, and their shareholders, etc.  

Start Move Towards Credit Balance Reduction

So if you are in this situation, it is best to have narrow focus to get quickly from under large credit card balances and then continue to keep balances at zero or payable within 3 months.  If this cannot be done so easily, here are a few suggestions I heard have worked or I know are possible to get moving in the right direction:

• Call the lender and explain your situation and ask for lower rate.
• If your credit score (get free credit score here) is in the high 680's and above, consider doing a balance transfer using a 0% promotional rate.  You can find offers here. 
• Escalate paying much more than minimum payment on credit card balances and more frequently as banks typically use daily average balance, so keeping the averages low can mean less interest gets charged.  Try paying weekly or bi-weekly in billing cycle, instead of monthly.
• Don't add new purchases to a credit card with an already large balance.
• Try using service like Debitize (see my blog @ Debitize on personal experience using this service)

In Closing

I don't advocate cutting up your credit cards once you get out of debt, but I do suggest using credit responsibly for mostly non-discretionary spending for things you have to pay monthly for anyway like cell phone, utilities, food, insurance, and the like when you have some sort of incoming cash-flow.  Think twice about putting discretionary spending like vacations, shopping, eating out and the like on credit cards if you know you don't have the money or will not have the money to pay for it in less than 3 months because you see the damage that can happen in short period of time for just $1000 balance.  Now, I gave you fair warning, beware carrying credit card balances!

Subscribe to my blog @ http://oslifemoneypoliticsnotherthings.blogspot.com or on the right side of this page in the Follow by Email box.  

Please provide feedback or questions pertaining to this blog post by leaving a comment below.  Also please be sure to share this content with your friends and family.  I thank you in advance.

Also, next time you think to shop at Walmart online, how about clicking through on the banner ad at the bottom of my blog site.  It will be appreciated, but also check out my blog post Loyal3 10 Stock Plan.  If you are spending money in Walmart, you should be owning it too!

Beware Of Carrying Credit Card Balances!

Don't Carry Credit Card Balance

I speak a lot about signing up for tons of different credit cards with big sign-up bonuses for obtaining points/miles which can be used for free or near free travel and experiences.  However, make no mistake in thinking that I mean you should carry balances on credit cards; especially on purchases which are liabilities (things which don't put money in your pocket).  Carrying a small balance of perhaps $500 to $1000 is not so bad considering your monthly cash-flow can wipe that amount away in 3 months or less, if no new purchases where added to the balance, but if balances swell month over month, this is downright dangerous to your financial well-being.

Oh, Instant Gratification

Credit is so widely available that it is hard to pass up using it to satisfy our urge to instantly gratify our desires for stuff.  I'm not knocking buying stuff on credit at all especially if you can afford it, and by afford it, I mean pay off the balance in full each month with either savings or monthly cash-flow.  If not, you should tread lightly using credit for your discretionary spending because the Annual Percentage Rate (APR) on that credit is usually pretty high.  Take for example some of the credit cards I recommend like the Chase Freedom Unlimited or Chase Sapphire Preferred, they have 15.74% - 24.49% variable APR.  These APR don't get much lower under other credit cards either.

Typical Interest Charge Calculation

The typical way in which credit cards charge interest is like below:

• (APR ÷ 365) = Daily Periodic Rate (DPR)
• (DPR × 31) × balance = Interest charge 

So, using a $1000 balance with 15.74% APR in the formula, we get 
 (((15.74 ÷ 100) ÷ 365) × 31) × $1000 = $13.37.

Your new balance is $1013.37.  You might say oh $13.37 is not that bad, but look what happens next month if you weren't to pay down this balance quickly 

• (((15.74 ÷ 100) ÷ 365) × 31) × $1013.37 = $13.54 
• (((15.74 ÷ 100) ÷ 365) × 31) × $1026.91 = $13.72
• (((15.74 ÷ 100) ÷ 365) × 31) × $1040.63 = $13.91
• (((15.74 ÷ 100) ÷ 365) × 31) × $1054.54 = $14.10
• ...

Note: I don't include minimum payment made for added effect of compounding 

The interest on the balance begins to compound at this high rate and, in addition, if you continue to add to the balance, this can get out of hand extremely quick.  Paying the minimum of $25 can mean paying $426.84 in interest over 58 months.  No bueno😞!

Minimum Payment Calculator

Wealth Transfer

The banks are making exorbitant amount of money when you slip up even a little.  Contrast these rates by the 9.8% average annualized total return of the S&P 500 over the last 90 years.  Even if you were eager to do something else which I suggest which is invest, it would make little sense to do so because the interest rates on credit would outpace gains from stock market or other investments as well.  Unfortunately, the wealth which you could be building for yourself and your family is being transferred to JP Morgan Chase, Citi, Wells Fargo, and their shareholders, etc.  

Start Move Towards Credit Balance Reduction

So if you are in this situation, it is best to have narrow focus to get quickly from under large credit card balances and then continue to keep balances at zero or payable within 3 months.  If this cannot be done so easily, here are a few suggestions I heard have worked or I know are possible to get moving in the right direction:

• Call the lender and explain your situation and ask for lower rate.
• If your credit score (get free credit score here) is in the high 680's and above, consider doing a balance transfer using a 0% promotional rate.  You can find offers here. 
• Escalate paying much more than minimum payment on credit card balances and more frequently as banks typically use daily average balance, so keeping the averages low can mean less interest gets charged.  Try paying weekly or bi-weekly in billing cycle, instead of monthly.
• Don't add new purchases to a credit card with an already large balance.
• Try using service like Debitize (see my blog @ Debitize on personal experience using this service)

In Closing

I don't advocate cutting up your credit cards once you get out of debt, but I do suggest using credit responsibly for mostly non-discretionary spending for things you have to pay monthly for anyway like cell phone, utilities, food, insurance, and the like when you have some sort of incoming cash-flow.  Think twice about putting discretionary spending like vacations, shopping, eating out and the like on credit cards if you know you don't have the money or will not have the money to pay for it in less than 3 months because you see the damage that can happen in short period of time for just $1000 balance.  Now, I gave you fair warning, beware carrying credit card balances!

Subscribe to my blog @ http://oslifemoneypoliticsnotherthings.blogspot.com or on the right side of this page in the Follow by Email box.  

Please provide feedback or questions pertaining to this blog post by leaving a comment below.  Also please be sure to share this content with your friends and family.  I thank you in advance.

Also, next time you think to shop at Walmart online, how about clicking through on the banner ad at the bottom of my blog site.  It will be appreciated, but also check out my blog post Loyal3 10 Stock Plan.  If you are spending money in Walmart, you should be owning it too!

Blacks Don't Invest In Stocks and Bonds

Blacks Don't Invest In Stocks and Bonds?

During a conversation I was having with a Black young lady, when I brought up the topic of investing in stocks, she said something along the lines that, "Blacks don't believe in investing in stocks and bonds..."  Though I was somewhat perturbed by that statement about Blacks mentality towards a form of investment, I later thought to myself is there "some" truth to that because I want to write about that?  I must state it as "some" truth because I am investing in stocks, not so much bonds, and I am Black.  However, more broadly speaking, I can feel where she is coming from and the statistics in articles that I have included in my blog, "Don't Drain Your 401K For A Pension Payment" seem to support that sentiment, and generally, not only do we not invest in stocks and bonds, but not much else in any other assets either; thus, the large wealth disparity between whites and blacks.

• Blacks still far behind whites in wealth and income
• The Racial Wealth Gap: Why A Typical White Household Has 16 Times The Wealth Of A Black One 

If Blacks, on a whole, don't invest in stocks and bonds, or we don't invest in real estate, or businesses, we are simply transferring our wealth to someone else's pocket.  However, we don't need to let that continue to be the case.  We can learn to invest ourselves and teach our children how to invest as well.  I know financial literacy is not taught much, but there are websites like mine and others littered online for us to digest what we can be doing to learn.  

It Starts At Young Age

Let me give you an example of this past week, my niece was by the house and she said every time she comes by she gets from us life lessons talks, and she does, because I don't want her to say nobody told her or tried to tell her.  In this case she had just gotten some money back and she was telling me about Snap's streaks and I asked her did she like Snap as she was on it like the whole time she was at my house.  I said to her, you know you can purchase like two shares for about $17 each, only a little more than 10% of what she had and her reaction is typical for what I think it is for many blacks when it comes to investing, which is I don't think I want to do that with my money.  I know she wanted to go see the 2Pac movie and go shopping as well to spend some of her money.

Isn't this familiar, we will go spend our money on this or that brand, which is a more than likely a publicly traded company, yet if asked if we own one share of that company, the answer is probably nah, why I need to own that?  If my niece that is young can heed these life lessons early and invest a little bit over time, the power of compounding will do the rest.  Snap(SNAP) doesn't currently pay a dividend, but if she was to invest in Nike (NKE) for about $51 a share as of writing this that pays an annual dividend of 1.38% which I explained in my blog, "Stocks Basics 101 - Dividends".  Each year, she would get back approximately $0.72 per share she owns.  Now contrast that with if she owns no shares, she only gives Nike money and all she gets in return is what she paid for.

Changing Wealth Transfer Mindset One Blog at A Time

If it is one thing that I hope this blog site does, it is to educate and teach you to be comfortable and empowered to invest in real estate, stocks, bonds, options, precious metals, businesses, and people.  On my blog, I try to stress the importance of investing early and often and teaching others when we have learned ourselves.  That is how we begin to do better for ourselves and I'm sure the wealth gap will start to close.  I'm confident that if we know better that we would do better and it's a matter of retraining our psyche away from just being consumers and also thinking ownership.  The one thing that I would most like to see us shed is this urge to buy all these name brand stuff, but don't own nary a stock in those companies.  So we look rich, but aren't rich because we don't partake in the flip side to that equation of being rich through the success that company has as a result of our consumption of those products and/or services. 

Ownership Man!

Investing in stocks and bonds is about wanting ownership because when you owe share(s) of stock in Apple(AAPL), Disney(DIS), Google(GOOGL), Tesla(TSLA), and the list goes on and on you own a piece of that company, you are a owner in that company.  So, when the statement is that Blacks don't believe in investing in stocks and bonds, see in a way how that equates to saying and meaning that Blacks don't believe in ownership.  When that belief carries over, not only to stocks and bonds, but to real estate, businesses, people, and other assets, that gives a great deal of clarity on why the median wealth holding for blacks was $7,113 compared $111,146 for whites.

In Closing

The bottom line is that we got to want and take ownership in this country and to not just be its consumers.  If you don't invest in stocks and bonds; however, it is OK if you are investing in other assets, but I know of no simpler way than through stocks to partaking in ownership of some of the most profitable companies in the world.  I like Robert Kiyosaki's definition of what an asset is which is something that puts money into your pocket.  So, if the thing which you are investing in is not meeting that criteria then you should try something else, perhaps stocks and bonds.  I know that there is a good amount of money that can be made investing in the stock market over time, so I will continue to mention ways and means to use it for your benefit.  Let's start to invest and provide that kind of continuity by passing on wealth and knowledge to our heirs that we can be proud of.

You can start making small investments on platforms like the ones I mentioned in this blog:

 Investments for 2017 (Loyal3 has moved to FolioFirst)

Note: If you want to get into investing and it makes your head spin, you can follow my lead where I am investing money and purchase the below diversified motifs.

Os ETF 87/13 Allocation
Os Own What You Love

Check out my Affiliate and Referral links here for products in services to help with investment, credit, cashback, and award travel.  Also  you can find more of my blog post on Start Here.

Subscribe to my blog @ http://oslifemoneypoliticsnotherthings.blogspot.com or on the right side of this page in the Follow by Email box.  

Please provide feedback or questions pertaining to this blog post by leaving a comment below.  Also please be sure to share this content with your friends and family.  I thank you in advance.

Also, next time you think to shop at Walmart online, how about clicking through on the banner ad at the bottom of my blog site.  It will be appreciated, but also check out my blog post Loyal3 10 Stock Plan.  If you are spending money in Walmart, you should be owning it too!

Blacks Don't Invest In Stocks and Bonds

Blacks Don't Invest In Stocks and Bonds?

During a conversation I was having with a Black young lady, when I brought up the topic of investing in stocks, she said something along the lines that, "Blacks don't believe in investing in stocks and bonds..."  Though I was somewhat perturbed by that statement about Blacks mentality towards a form of investment, I later thought to myself is there "some" truth to that because I want to write about that?  I must state it as "some" truth because I am investing in stocks, not so much bonds, and I am Black.  However, more broadly speaking, I can feel where she is coming from and the statistics in articles that I have included in my blog, "Don't Drain Your 401K For A Pension Payment" seem to support that sentiment, and generally, not only do we not invest in stocks and bonds, but not much else in any other assets either; thus, the large wealth disparity between whites and blacks.

• Blacks still far behind whites in wealth and income
• The Racial Wealth Gap: Why A Typical White Household Has 16 Times The Wealth Of A Black One 

If Blacks, on a whole, don't invest in stocks and bonds, or we don't invest in real estate, or businesses, we are simply transferring our wealth to someone else's pocket.  However, we don't need to let that continue to be the case.  We can learn to invest ourselves and teach our children how to invest as well.  I know financial literacy is not taught much, but there are websites like mine and others littered online for us to digest what we can be doing to learn.  

It Starts At Young Age

Let me give you an example of this past week, my niece was by the house and she said every time she comes by she gets from us life lessons talks, and she does, because I don't want her to say nobody told her or tried to tell her.  In this case she had just gotten some money back and she was telling me about Snap's streaks and I asked her did she like Snap as she was on it like the whole time she was at my house.  I said to her, you know you can purchase like two shares for about $17 each, only a little more than 10% of what she had and her reaction is typical for what I think it is for many blacks when it comes to investing, which is I don't think I want to do that with my money.  I know she wanted to go see the 2Pac movie and go shopping as well to spend some of her money.

Isn't this familiar, we will go spend our money on this or that brand, which is a more than likely a publicly traded company, yet if asked if we own one share of that company, the answer is probably nah, why I need to own that?  If my niece that is young can heed these life lessons early and invest a little bit over time, the power of compounding will do the rest.  Snap(SNAP) doesn't currently pay a dividend, but if she was to invest in Nike (NKE) for about $51 a share as of writing this that pays an annual dividend of 1.38% which I explained in my blog, "Stocks Basics 101 - Dividends".  Each year, she would get back approximately $0.72 per share she owns.  Now contrast that with if she owns no shares, she only gives Nike money and all she gets in return is what she paid for.

Changing Wealth Transfer Mindset One Blog at A Time

If it is one thing that I hope this blog site does, it is to educate and teach you to be comfortable and empowered to invest in real estate, stocks, bonds, options, precious metals, businesses, and people.  On my blog, I try to stress the importance of investing early and often and teaching others when we have learned ourselves.  That is how we begin to do better for ourselves and I'm sure the wealth gap will start to close.  I'm confident that if we know better that we would do better and it's a matter of retraining our psyche away from just being consumers and also thinking ownership.  The one thing that I would most like to see us shed is this urge to buy all these name brand stuff, but don't own nary a stock in those companies.  So we look rich, but aren't rich because we don't partake in the flip side to that equation of being rich through the success that company has as a result of our consumption of those products and/or services. 

Ownership Man!

Investing in stocks and bonds is about wanting ownership because when you owe share(s) of stock in Apple(AAPL), Disney(DIS), Google(GOOGL), Tesla(TSLA), and the list goes on and on you own a piece of that company, you are a owner in that company.  So, when the statement is that Blacks don't believe in investing in stocks and bonds, see in a way how that equates to saying and meaning that Blacks don't believe in ownership.  When that belief carries over, not only to stocks and bonds, but to real estate, businesses, people, and other assets, that gives a great deal of clarity on why the median wealth holding for blacks was $7,113 compared $111,146 for whites.

In Closing

The bottom line is that we got to want and take ownership in this country and to not just be its consumers.  If you don't invest in stocks and bonds; however, it is OK if you are investing in other assets, but I know of no simpler way than through stocks to partaking in ownership of some of the most profitable companies in the world.  I like Robert Kiyosaki's definition of what an asset is which is something that puts money into your pocket.  So, if the thing which you are investing in is not meeting that criteria then you should try something else, perhaps stocks and bonds.  I know that there is a good amount of money that can be made investing in the stock market over time, so I will continue to mention ways and means to use it for your benefit.  Let's start to invest and provide that kind of continuity by passing on wealth and knowledge to our heirs that we can be proud of.

You can start making small investments on platforms like the ones I mentioned in this blog:

 Investments for 2017 (Loyal3 has moved to FolioFirst)

Note: If you want to get into investing and it makes your head spin, you can follow my lead where I am investing money and purchase the below diversified motifs.

Os ETF 87/13 Allocation
Os Own What You Love

Check out my Affiliate and Referral links here for products in services to help with investment, credit, cashback, and award travel.  Also  you can find more of my blog post on Start Here.

Subscribe to my blog @ http://oslifemoneypoliticsnotherthings.blogspot.com or on the right side of this page in the Follow by Email box.  

Please provide feedback or questions pertaining to this blog post by leaving a comment below.  Also please be sure to share this content with your friends and family.  I thank you in advance.

Also, next time you think to shop at Walmart online, how about clicking through on the banner ad at the bottom of my blog site.  It will be appreciated, but also check out my blog post Loyal3 10 Stock Plan.  If you are spending money in Walmart, you should be owning it too!

Highest Yielding Savings Accounts

High Yield Saving Accounts

I was moving some money around in savings accounts that I opened some time ago and after writing the blog, "Loyal Only To Next Big Sign Up Bonus", it got me to thinking had I been resting on my laurels when it came to where I had money sitting for future bills to be paid for taxes, insurance, or savings.  I had vetted out these savings accounts 4 years ago that they were yielding the most at the time, but I hadn't checked in awhile until just this past week how they still fared.  

Time For Some Changes

What I found is that I have some changes to make to get a higher rate of return for this money that is mostly going to accumulate and sit around until I need to pay it out.  Here is what I found for the current state of my accounts as far as there yield amounts:

Bank                                       Yield

Ally                                           0.85%

MySavings Direct                  0.85%

Capital One                             0.60%

Salem Five                               0.90%

FNBO                                        1.82%

Discover                                   1.10%

I compared two sources for the highest rates I could get now using Mint.com and Magnify Money.  I found 6 banks which offer higher yield than all but one of the accounts I had.  Personally, I don't mind an online bank as I currently have banked remotely with USAA for over  20 years and I have yet set foot in their home bank in San Antonio and I've been able to do all I want to do as far as banking just fine.

Magnify Money Results

Mint Results

Based upon these results, I will be opening two new savings accounts in Dollar Savings Direct and Bank Purely for the 1.30% as I can't get the rate I currently get if I were to open another FNBO account now.  

New Accounts For $ To Sit In

I'll use these savings accounts to segregate out 4 buckets of funds I have to put aside for future.  The setup will probably be something like follows:

• FNBO - Property taxes and taxes for investment income from options trading - 1.82%
• Dollar Savings Direct - Mini Emergency Fund of $1000 - 1.30%
• Dollar Savings Direct - Home Owner's and Flood Insurance - 1.30%
• Bank Purely - Tenant Security Deposits - 1.30%

I like this setup as it's an increase of almost 50 basis points over if I do nothing. 

In Closing

I had been resting on my laurels and even I need to be shaken out of a slumber every now and then.  If you have some cash just sitting around why not use this time to evaluate can you too do better.  If these rates are higher than what you are getting at your current bank, it may be time to switch as again that question of why you are loyal comes up again if the bank is not offering you better value? 


Check out my Affiliate and Referral links here for products in services to help with investment, credit, cashback, and award travel.  Also  you can find more of my blog post on Start Here.

Subscribe to my blog @ http://oslifemoneypoliticsnotherthings.blogspot.com or on the right side of this page in the Follow by Email box.  

Please provide feedback or questions pertaining to this blog post by leaving a comment below.  Also please be sure to share this content with your friends and family.  I thank you in advance.

Also, next time you think to shop at Walmart online, how about clicking through on the banner ad at the bottom of my blog site.  It will be appreciated, but also check out my blog post Loyal3 10 Stock Plan.  If you are spending money in Walmart, you should be owning it too!