Other Applications for CashMap’s Line of Credit Strategy

27 Apr Other Applications for CashMap’s Line of Credit Strategy

Our Challenge

We’re all busy. There are too many things demanding our time. There are more things to do than there is time to do it! For most of us, we work hard for our money and there’s not enough of it. Our money doesn’t demand our attention, there’s nothing keeping us from blowing it and it’s not there encouraging us to make the decisions necessary to ensure that we’ll have enough of it.

Banks Our Money to Make Money

We can’t afford to have our dollars sitting around doing nothing. Banks thrive off of lazy dollars. They use our savings and checking account dollars to borrow anywhere between two and eight times our savings and checking account balance for almost nothing, make loans at six percent and pocket the difference. The simple principal behind CashMap’s Line of Credit Strategy allows you to turn the tables on the bank.

CashMap’s Simple Underlying Principal

We always keep our money working for us. That’s it!

When we have debt and we’re unsure if we can get a higher return on our dollars than the interest rate we are paying on our debt, debt payoff is an excellent strategy to boost financial wealth. However, if we’re not getting rid of debt, how can this strategy be used?

Our Savings Habit that Helps Banks

We all know we need to save; however, the way we do it is the problem. First, most of us don’t budget. Second, we worry that we might not have enough cash or we don’t want to be bothered. So, we leave idle cash sitting in our checking accounts.

For most of us, saving thirty percent of what we earn is aggressive. It shouldn’t be and doesn’t have to be like this. If after we pay our bills, we have $1,000 saving $300 is aggressive. If we were to save $300 a month earning 4 percent, in twenty years we would have $304,000. We’ll have almost $661,000 if we were to save $1,000 a month. $700 is sitting in the checking account doing nothing. What’s even worse, we don’t know where the $700 was spent.

A Savings Account Dilemma

In a recent posting, ‘The NerdWallet Credit Card Blog’ recently listed their ’Top 10 High Yield Savings Accounts for the Digital Age’. The highest savings rates are between .85 and 1 percent. Admittedly, the interest rate is low; however, this is much better than what the banks are willing to pay us.

There’s a problem.

We’re only allowed to have six withdrawals a month. If we go over, there’s a fee. This keeps many of us from saving more aggressively.

CashMap’s Simple Saving Solution

To earn the greatest amount of interest, we want to keep the average daily balance in our savings account as high as possible. How do we do this? Depositing our dollars as early in the billing cycle and making withdrawals as late as possible in the billing cycle. To do this, we shift the due dates of all our bills to as late as possible. This means that we might have just two withdrawals during the month, our rent/mortgage and all our other living expenses.

This is a one-time adjustment. The six-withdrawal limitation is no longer a concern. Our dollars are working for us all month long, we are aggressively saving and we have few if any lazy dollars.

In my next post, we’ll discuss how you can use this strategy with your investment advisor!

Ready to start your journey towards financial freedom? Get started today!

I’d love to hear from you. Please send your questions, topics or suggestions to dennis@cashmapconsulting.com. You can also follow me on twitter at cash_map.