Comments on Wisdom Steps 101 ... Be Weird...Be Debt Free: You Can't Beat The Credit Card Companies

You don't seem to understand the dangers. If ...

2006-12-15T20:27:00.000-06:00

You don't seem to understand the dangers. If you have the money then invest it, but never repeat NEVER invest borrowed money. Even Roger Shumaker a licesensed CSA and owner of Retirement & Tax Solutions (member NASD/SIPC)sad he would advise anyone he talked with against such a plan. The first words out of his mouth was that such a thing was to risky.

You claim you have cash, so invest that cash in some good mutual funds and do not invest borrowed money...tht is what you call stupid.

what should i do with the money i've earned? shoul...

2006-12-15T17:39:00.000-06:00

what should i do with the money i've earned? should i burn it? should i send it to you? is it invisible money? do i have to tell the irs? (of course i do.) wake up and realize 4% is easy and risk-free to earn, so 0% is worth every penny. it's funny that i've been explaining this for months to you now, but you continue badgering me in top level posts, and more and more people try hard to communicate to you that what i'm saying is real. not for everyone, but very real.

it sucks to write a thoughtful comment that you do...

2006-12-14T11:35:00.000-06:00

it sucks to write a thoughtful comment that you don't release. some day i'll stop coming around this joint.

Trent, you're at the heart of it. I can earn this ...

2006-12-13T20:00:00.000-06:00

Trent, you're at the heart of it. I can earn this small income because the banks still earn their large one. I want everyone to succeed against them, foremost by living within their true means. Kevin and I agree 100% on that. Now let me tell you more: Actually in 2006 I incurred some debt (and spent some savings) to fully fund a 401(k), Roth IRA, and HSA, and use the deduction to convert a traditional IRA to Roth. I did it all within the 15% tax rate, and in actual fact speculated on equities (win some, lose some).

I am tracking how much "pay-off-all-credits" power my 401(k) gives me, which is half its balance as a self-loan, limit $50,000. Obviously I'm planning against a universal default clause, which I assume to call the whole thing. I've used this credit muscle to achieve the above plan cheaply and cleanly. To back all this I'm earning a very sound income now, but strictly speaking, yes I'm using debt. Just very conservatively. Indeed, my interest in Kevin's blog empire began with our disagreement on the wisdom of debt at all. I also have a mortgage at $130,000 but it's 6% fixed and my house is stunning. Some debt can be justified. Just don't ever think it's free.

Flexo, I think Dave Ramsey often assumes that cred...

2006-12-13T11:46:00.000-06:00

Flexo, I think Dave Ramsey often assumes that credit card users are irresponsible because, statistically, they are.

Anyway, using credit cards for profit is fine, but it does carry some risk - mostly related to your own responsibility.

I have to disagree with the premise and the follow...

2006-12-13T10:52:00.000-06:00

I have to disagree with the premise and the following statement "don't spend (or invest) money you don't have."

The average home costs $170k in the US. Should someone not buy a home because they don't have 170k in cash?

Should a high school graduate forgo college because he doesn't have 30k for tuition & books?

Should you forgo medical treatment (even though you might die) because you don't have 10k for medical treatment?

The whole "don't spend money you don't have" sounds pretty stupid when you start putting things into context.

Credit cards ARE money - specifically it is BORROWED money just like you borrow to buy a house, go to college, get medical treatment, buy food, buy clothing, pay for shelter.

The BAD things happen when you borrow MORE than you could ever reasonably pay back.

I currently have BORROWED 56k (yes $56,000 at 0%) and earning (yes EARNING) 5% on that money. I will PAY BACK EVERY PENNY after my 0% APR period ends.

From those borrowed funds of 56k, I will have CREATED $2800 in NEW money out of thin air. I will then use this money to either invest it further or on personal consumption.

In either event I am helping the economy and creating new wealth by borrowing; I would be doing neither by leaving my credit card accounts dormant.

hi, kevin. yes, $10/day continues. I have $74,000...

2006-12-13T10:25:00.000-06:00

hi, kevin.

yes, $10/day continues. I have $74,000 at 0%. It's all in money market funds at 4.5%. You say I have no business earning $10/day? That makes it even sweeter! A 4.5% money market "investment" carries nearly zero risk. I am not relying on my paycheck... the money I earn from my job is separate from this money. To pay the monthly bills, I use a corporate money transfer that is part of most automatic check delivery agencies. Even if I die, the payments still happen automatically. You are right: The money must get paid back perfectly. The BillPay system through my bank has never missed a payment and it's done electronically, but that risk is still why I keep the assets in liquid form... so I could pay them all back tomorrow.

Recently I was denied more credit. Well that's fine cuz I already have $74k in cash! If I paid it all off today, I'd have a fine credit score in two or three months. And actually I have no *real* need for credit. I just enjoy a small hobby and income.

Your quote from Mr. Clarke has not been true in my experience. No lender has sought to prevent my xfer of funds. Also: xfers do not appear on credit reports. In fact, rate does not, either.

Kevin, I got back into this because you said it was a bad idea. Since then I've earned about $500. I kind of think anyone can do this, but realistically one must be very organized, very conservative, and very experienced to succeed as I do with it. Essentially I'm a businessman... I'm not spending a penny of the money, and I'm not losing a penny to the banks. Not everyone has that level of fiscal discipline.

Flexo, why don't you just save cash and invest tha...

2006-12-13T09:24:00.000-06:00

Flexo, why don't you just save cash and invest that? Same returns without the risk.

http://debtfighters.blogspot.com/

some people think they can borrow at 0% on their c...

2006-12-13T09:01:00.000-06:00

some people think they can borrow at 0% on their credit cards and invest that money....they are acting like that credit card is money and that is what is being refered to in that statement.

again never spend (or invest) money you don't have!

Dave Ramsey is wrong. Credit can be used as a too...

2006-12-13T08:49:00.000-06:00

Dave Ramsey is wrong. Credit can be used as a tool as long as the user is responsible. 0% balance transfers work, and the credit card companies allow them to. Credit cards are just waiting for the moment the guy who does this screws up and misses a payment... but responsible people won't let that happen.

Of course there might be a drop in your FICO score if you go overboard, but some people have little need for a perfect FICO score. The drop in these types of situations is temporary, anyway, and has to do with the opening of the credit card accounts over a short time period, number of accounts open, and only possibly transfers between cards.

If you have an emergency fund already and have no need for a high FICO score in the short term, by all means, make money off the credit card companies (if you know what you're doing). You do have to be careful and make sure you understand the terms of the 0% transfer offer. But a responsbile person can completely handle 0% balance transfers. It's not recommended for everyone, but it is possible for someone to earn a fair amount of interest. In my opinion, it's a lot of work for little return, but not everyone shares that opinion.

None of this has anything to do with a credit card "being" money. I don't understand that comment. A credit card is a piece of plastic... You don't give someone your credit card (to keep) in return for a product or service... of course a credit card isn't money.