If you’ve heard the news, Congress is trying to speed up credit card reform. It’s the law the places more restrictions on when credit cards can raise their rates, reduce limits, etc. Why is Congress doing this? Take a look at this article:
http://money.cnn.com/galleries/2009/news/0910/gallery.credit_card_evil_things/index.html
This recent article gives some suggestions to minimize the impact on changing rates, terms, and fees.
http://finance.yahoo.com/expert/article/moneyhappy/197408
But what about the 5th option? Instead of being at the mercy of the banks, why not start your own bank?
No I don’t mean opening branches and hiring tellers. I mean getting your finances such that you can operate as your own bank. If you owned your own bank, would you care about your own credit score? Collateral? Interest rate? Of course not!
That would take forever! And where would I get the money to even do this?
Well, first things first. Often, people spend or waste money unknowingly and I don’t mean by buying things. Think of the things you do in your financial life: how fast you pay your mortgage, how you save/invest money, how you insure your possessions, and how you finance purchases. We make hundreds, if not thousands, of little decisions each month. The question is: Are you making the most effective and efficient ones?
It’s often the things we think are good for us that really hurt us in the long run – like paying down your mortgage faster than required. In many instances, people can free up hundreds or even thousands of dollars each month by being more efficient – without changing your lifestyle.
Once you free up that money, it becomes very easy to start your own bank. Using the proper vehicle, you can earn a competitive rate of return, borrow at attractive rates (from yourself!) and minimize taxes all at the same time. And no, I don’t mean using savings accounts.
What would being your own bank feel like to you? Or would you rather wait nervously waiting for a bank to run your credit score?
And since you’re like to buy some of these things anyway at some point, would you rather pay interest to the bank or to yourself?
If you want to do some reading on this, look up Infinite Banking on the Internet. It won’t show you how to free up money each month, but it will show some ways to start becoming your own banker!
Answer to last week’s trivia question: D – 8.7%
This week’s trivia question: In FY 2009, what percentage of the federal budget is devoted to mandatory programs - Social Security and Medicare? Is it?
A – 5%
B – 37%
C – 50%
D – 74%
