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Leverage

“Give me a lever long enough and I could move the world.”

Sorry – this post is not about a TV show on TNT.

Interest rates for borrowers are at an all time low, 0% APR into rates for credit cards are running rampant, and there are even no fee 0% balance transfer offers out there as well.  All this translates into virtually free money!

Credit Card

I have had a different credit card every since 2005.  I may have even had 2 in any give year.  It all depended on who was willing to give me the best offer.  All of my cards have been of the 0% family.  I put everything, regardless how small the purchase may be on these cards.  In the mid 2000s cash back was around 5% on gas, groceries, and pharmacies.  Now you are lucky to find 3% with most being in the 1% nature.  For the duration of the intro rate, I pay the minimum or a few hundreds dollars.  All the while using the saved cash in a high(ish) rates savings account or held in the emergency fund.  I only missed 2 payments in the past 7 years and luckily was able to talk the CSR out of the fee.  Over the past 7 years, I would not be surprised if I have made 5k just from using my credit cards.

Mortgage/Equity

When I bought my home in 2009, I had a rate of 5% on a 30 year note.  A year later I took a refi down to 4% on a 15 year.  Recently I went down to 3.625% on a 15 and cashed out 10k.  I used the extra money to pay off a car loan and do some HVAC upgrades.  I am content where I am not, but will pull the trigger if the right offer comes my way.  However, I just did apply for a HELOC @ 2.99%.

Holy Grail

Holy Grail? Yes! The Holy Grail of leverage is the 0% balance transfer with no fee.  When these were very prevalent in the early to mid 2000s, I did not use credit cards.  I have only been privy to 3 such deals, but I do have a “Come “Back” offer sitting on my desk as I write this.  These deals are not for the weak of heart though.  The 1st time I pulled the transfer deal, I spent a few weeks analyzing the would be payments and projecting a budget for 12 months.  The 2nd time was just as bad, but I did it anyway.  I actually ended up using it as my primary card – which I have right now.  (Chase Slate if you were curious.) The 3rd one intermingled the 2nd and was an offer to my wife.  She was all for it so we went ahead and signed up.  Strangely enough this once is the largest balance but I am the least worried about.  As far as the current offer, only time will tell.

Ironically, if you asked me about leveraging myself 4 or 5 years ago, I probably would have laughed and said debt free and cash heavy is the way for me.  I guess all of this free money out there is making me take more of a risk.  Which leads to more stress.

Saving

Part of being stressed is my life is knowing there is always money available and that is budgeted for.

Between my wife and I we have 9 different banks that we have accounts with.  Crazy.  Thankfully we do not use all of those banks, but it can be daunting at times.

2 of her accounts are virtually dormant.  She has one that houses her retirement and another that a small amount of her paycheck gets transferred every 2 weeks.  That is her “slush fund.” The “do as you please fund.”

So, that leaves 7 different accounts.

We have a joint account that funds our mortgage and bills.  We both have our direct deposit go here.  From that account monies are transferred into a different account that pays our credit cards, saves for an IRA or other investments, savings for our next car, and even an account that funds extra mortgage payments or home repairs.  Talk about a mess!

The next bank is a credit union and I am a big fan of them.  This bank also has direct deposit.  I had my mortgage with them until the bank above offered such a low refinance that I couldn’t resist.  This bank has our emergency fund (approx 6 months), vacation account, birthday/gift account, as well as our home repair account.  You may be seeing that there are 2 home repair accounts at this point.  This is the main one and one we really only use.

I also have a http://www.lendingclub.com/ account.  Lending Club is an interesting concept and I really think it has long term potential.  I have only been a member for 2 years, but I like what I see so far.  At this point I am not making new investments, just taking the interest and investing in different notes.

Next is my brokerage account.  My work 401k, IRA, and individual account are here.  There is also a bank account that I have only used twice, it was an inheritance from my grandfather.  I should empty the account and close it, but for some reason I don’t have it in me.

Finally there is my own personal checking account.  I would say it is my slush fund, but it really isn’t.  This account also has direct deposit.  Since I work overtime, this account varies in deposits.  On the debit side this account is for our monthly allowance.  I will delve deeper into this, but the basis is that we do not ATM.  If the account gets over $3,000, I transfer the money elsewhere – usually to pay off a credit card bill or place into a home repair account.

Yes, this may be messy and for the most part it is streamlined and really helps us to set goals and know what we can and can not do.

Do you do something similar to this?  Am I crazy for my approach?

Poll


Stress

There was a time when there was no Mister Stress.  Before having a job, taking on a mortgage, getting married, the glorious news of an expanding family, figuring out ways to balance a budget, and more importantly making sure there would be something in retirement.  It was not even that long ago either – maybe 4 or 5 years ago before there was a semblance of stress.  That was pre-everything I just listed above.  Those days can be surmised as knowing there would be stressful times ahead, but not knowing what those stressful times would entail.  Not dumb, but not oblivious either.

Now stress is a daily thing, but it turns out that I like stress and even thrive on stress.  I don’t prefer things to be stressful, actually I much rather have an empty to do list, but it seems I am in my element when I am up against a wall.
I probably worry too much and do often find myself running numbers in my head before I to sleep.  Some people may count sheep before bed, but I count ways to save more, spend less, and maximize everything we do.What makes you stressed?

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