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I’m done.  I’ve played the credit card game long enough.

Since that first time in college, inspired by the euphoria of attending my first college football game, I’ve always sort of been under the spell of credit cards.  I eagerly grabbed that Discover Card clipboard and gave up my credit virginity.

I kept reminding myself of all of the benefits – reward points, insurance, floating money through the grace period, a higher FICO score, and on and on.

Rarely did I ever stop to consider the danger.  Unfortunately, that neglect led to many thousands in credit card debt.  I worked my butt off to pay it all off.  Here I am years later squandering more money on credit cards.

I’ll just use the cards for groceries, and gas, and online purchases.  I’ll pay them off every month.  I won’t put more on the credit cards than I have in my checking account.  What a stupid game I played all these years.

Last weekend I sat down with my credit cards and we had a heart to heart.  Yes, breaking up is hard to do, and so it “cutting up.”  But sometimes when a relationship has gone toxic you just have to do it.

I jotted down the few benefits of keeping my credit cards.  The list was even shorter once I put pen to paper.  Then I began my list of all of the reasons I hated them.

17 Reasons Why I’m Ending My Toxic Relationship With Credit Cards

1.  I want to own things as soon as I buy them.  From groceries to gasoline to a new book from Amazon, I want to take ownership of things as soon as I buy them.

2.  I’m tired of bank errors and card skimmers.  I was one of the victims of the large Target credit card fiasco, and it really ticked me off.  Automatic charges got declined and I spent precious time waiting for a new card and then updating all of my utilities and subscriptions with the new card information.

3.  I feel out of control.  Maybe it’s easy for some people to walk in a casino with $100, gamble it away and leave.  For others, it’s easy to have one drink after work before going home.  For the rest of us, moderation isn’t our thing, and we have to set limits for ourselves.

4.  I’m kidding myself with reward points.  One of my cards offers a pretty sweet deal, on the surface.  For $75 a year I can earn cash back at the grocery store and gas station.  The card easily pays for itself, but I find myself trading rewards for reason #1, and I don’t like it.

5.  Spending cash hurts, and I’m a financial masochist.  It is so easy to pull out a credit card and swipe it for clothes or electronics or dinners out.  But try laying down $20 bills for those same items and it hurts.  It’s good for you to feel that pain.

6.  I don’t follow the herd.  Most of the “smart money” guys out there like to tell you that credit cards with great cashback or mileage programs are the way to go.  “Just buy things you would normally buy and pay it off each month,” they say.  Of course, their resumes usually start with companies like JP Morgan Chase or Citibank.  Kind of hard to bite the hand that feeds you.

7.  I need to set a better example for my kids.  I’ve spent most of my children’s formative years preaching against the dangers of debt.  Then I went out and financed a truck (yes, I sold it later) and I whip out a credit card at the end of our weekly family grocery trip.  Talk about feeling like a fraud.

8.  Relying on plastic makes us less able to prepare for disaster.  Consider what all has to go right for a credit card transaction to go smoothly.  The swipe, the communication and authorization between merchant and processor, the signature verification, etc.  I think I’d rather just plop down cash – works in power outages, bad weather and internet outages.

9.  I need delayed gratification to break my spoiled habits.  I have had my heart set on a new tool chest combo to organize my scattered set of tools in the garage.  I could easily go pick it up today and put it on a credit card.  But I’ve chosen to wait.  I’m diverting $25 per paycheck into my “Tool Chest” sinking fund and when I have enough cash I will buy it.

10.  Interest is like paying for something twice.  Even those with great intentions of paying off the credit card bill every month slip up.  And when you do, you pay for it.  I despise interest.  Interest steals from your future paycheck.

11.  Celebrity endorsements of credit cards annoy me.  What’s in your wallet?  Cash.  No amount of pirates or paid actors or dancing girls is going to make me feel differently about credit cards.

12.  Losing my wallet will be less of a big deal.  I’ve only lost my wallet once.  I freaked out.  I struggled to remember which credit cards were in my wallet.  I wondered if someone used them.

13.  My grandparents lived just fine without credit cards.  Debt is not a new invention, but credit cards are still a relatively new concept.  The first modern credit card didn’t come along until the early 1950’s.  How did people function without plastic before then?  They paid cash.  They bartered goods and services.  They ran a tab at the local pharmacy or grocery store, gave a firm handshake and did whatever they had to do to pay it back.

14.  Banks and financial gurus are against the idea of living without credit cards.  Like I said, I don’t run with the herd.  There is a reason these people encourage us to keep using debt – it keeps them employed.

15.  I’m a simple man.  Life has gotten so complicated.  Credit cards, bank accounts, email accounts, passwords, smartphones, etc.  I’m a simple man.  Credit cards, and all of their baggage, are one less thing to worry about.

16.  Spending cash makes it easier to negotiate.  Several locally-owned stores in my area give a 10% discount for using cash.  The last big piece of furniture I bought I used cash and was able to get a discount and a side piece thrown in for free.  Money talks – cash is loudest.

17.  I don’t like having all of my purchases tracked, analyzed and reported.  I have nothing to hide, but sometimes I grow weary of having everything I look up online, and everything I purchase, and everything I say on a cell phone, tracked.  Whatever happened to an expectation of privacy?  Those who wish to track our every move don’t like cash, and that’s exactly why I do.

I can hear many people now asking, “but how does he buy something from Amazon.com?”  Or, “how does he reserve a hotel room or a rental car?”  Well, guess what, all of those places accept debit cards.  However, I prefer to trade my cash for gift cards when I can to handle those transactions.

Nearly every grocery store and pharmacy chain now sells store gift cards.  It’s easy to load up on Amazon gift cards with cash and fund my Amazon account in advance.  I’ve even bought Visa gift cards for travel purchases with no trouble.

The decision on whether or not to cut up your credit cards is yours.  I’m just telling you what works best for me.  But don’t let yourself be fooled by the glitter that surrounds the product; at its heart a credit card is just a quick way to acquire debt.  That’s all it is.

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With a new year underway I have been thinking a lot about the need to diversify my income streams.  While my near-term ability to continue full-time working status remains good, I’ve become heavily dependent on my full-time job for income.

Not all of that is my fault.  I can thank declining savings and dividend rates for knocking down a good bit of my monthly interest income.  Some of my failure at diversifying our income streams has been my fault.  I haven’t had the proper motivation at finding a side hustle until just recently.

Maybe it’s the market’s recent volatility that has me nervous, or perhaps just my own overly-conservative nature.  Whatever it is, it has motivated me to begin thinking about new ways of diversifying your income streams in the coming year.

4 Realistic Ideas for Diversifying Your Income Streams

1.  Dividends.  With yields on most savings accounts still well under 1% an annual dividend return of 4-5% looks awfully attractive.  I might just add to my dividend ladder, which is missing several rungs, to generate some monthly dividend return.

Of course, there is some risk of losing capital inherent in investing in the stock market, but there are plenty of opportunities for a relatively safe dividend return in utilities, telecommunications, and other other sectors.

2.  Savings.  I know savings rates are hovering below 1%, but there is a place in every portfolio for cash.  From emergency funds to sinking funds you should have plenty of cash put back.

I need to diversify my cash into various interest-bearing products, such as CDs and money market accounts, rather than letting it just sit in savings earning next to nothing.

3.  Rental income.  This may be one of my favorite ways to diversify income, but it is also one of the most difficult (at least it is for me).  I’m generally risk averse, so I cannot fathom the idea of taking on another mortgage, even a small one for a rental property.  I also don’t have enough cash floating around to pay cash for an investment property.

Still, I know that rental income has the potential to provide more than any other category in the long run.  I really need to get serious about this before mortgage rates go back up.

4.  A side hustle.  Besides this blog, I maintain a couple other web properties where I try to eek out some additional income each month.  It’s hard to do, and requires a huge time investment, something I’m also short on these days.

I could look at part time employment, but the thought of standing on my feet after a full day of work bagging groceries or delivering pizzas is not appealing.

None of these income streams are going to make me wealthy alone, but together each serves as sort of a safety net for the other.  Having four or five income streams in addition to your full-time job makes you more layoff-proof, and able to withstand periods of temporary unemployment.

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A lot of work goes into maintaining a home. In addition to everyday tasks like vacuuming, sweeping, mopping and dusting, there are certain tasks that should be done at least a few times per year.

It’s easy to overlook these kinds of things or to let them slide, but you can avoid this by creating a biannual to-do list, setting a reminder on your phone or email, and making sure they’re done in a timely manner.

So, what kinds of things need to be done every six months or so?  A few examples include:

1.  Change Smoke Detector and Carbon Monoxide Detector Batteries

Instead of waiting for your smoke detectors and carbon monoxide detectors to remind you to change the batteries, take a proactive approach and do so every six months. In addition to ensuring that the devices are in good working order, doing this lets you avoid hearing that irritating beeping noise at random times.

2.  Inspect the Attic

No one likes going up in the attic. However, this is one situation where “out of sight, out of mind” can backfire disastrously. By inspecting the attic every six months, you can detect small problems before they spiral into large ones. From pests making themselves comfy up there to tiny leaks that could ultimately destroy your roof, giving the attic a once-over is a wise move.

3.  De-Clutter

Despite your best efforts, you’re sure to find stuff accumulating over time. Instead of waiting until things reach hoarder-like levels, make a point of going through the house collecting things you can donate, sell or throw away. Do it even if it doesn’t feel like the house is too cluttered. In the long run, it’ll save you from dealing with massive piles of stuff.

4.  Clean Your Refrigerator Coils

In most homes, the refrigerator accounts for 15 percent of energy costs. Even if you have an energy efficient fridge, its efficiency can dwindle away as its coils become clogged with dust and other debris. Twice a year, pull the fridge away from the wall and vacuum its coils. Doing this can save you up to $100 per year.

5.  Clear All Drains

Nothing is worse than a sink or bathtub that drains slowly. Rather than waiting for this to happen, go through the house clearing the drains two times per year. They sell a long, plastic thing with spikes at Home Depot that does a really good job. Use a regular plumbing snake for the bathtub drain.

6.  Inspect the Water Heater

Because it’s typically in the basement, the water heater is often overlooked – at least, until something goes wrong. Take a peek at yours twice a year. Look for mineral buildup, signs of corrosion and evidence of leaks. By catching these things early, you may be able to avoid a flooded basement or other expensive problems.

7.  Deep Clean Your Carpets

If you have carpets in your home, vacuuming alone isn’t enough. Every six months or so, pay to have them professionally cleaned. This deep cleaning will go a long way toward keeping them like new for a long time to come.

By taking care of these tasks every six months or so, your household will keep humming right along without any issues.

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Over my years of financial struggle I have found great inspiration reading what others have to say on the subject of personal finances.

Fortunately, blogging about money became popular at my financial low-point, providing me with several great role models for a financial turnaround.

Since then, several newcomers have also made it on my daily reading list.  Here are five financial blogs I believe you should add to your reading list.

1.  Mr. Money Mustache

I enjoy Mustache’s no-nonsense tone, and his unique approach to living on less.  You can get a flavor of his overall tone with this line from his About page, which describes his motivation for beginning the blog:

“…The whole country seemed to be displaying the same odd behavior: living ridiculously expensive lifestyles while thinking they were completely normal, and then being baffled when they had no money left over to buy their own freedom.”  (mrmoneymustache.com)

2.  Debt Free Martini

Petrish’s story reminds me of my own.  Well, at least the part about serving others better than she has served her own finances.  I enjoy her blog because it is personal – she shares her struggles with breaking up with Starbucks and provides monthly updates on her debt free progress.

“I am a active duty military single mom who is brilliant when it comes to serving others and my country, but have not done so well with handling my finances.” (debtfreemartini.com)

3.  Get Rich Slowly

I first stumbled upon J.D Roth’s blog back in 2007 and was immediately hooked.  I found much to relate to in JD’s writing, and I appreciated his personal style of writing.

Today, J.D. has largely moved on to bigger and better things after becoming debt free and selling his website (he still contributed articles occasionally).  The site remains one of my favorites thanks to its excellent staff of contributors.  (getrichslowly.org)

4.  Good Financial Cents

I’ve been a big fan of Jeff’s work for a long time now.  Sure, he’s a certified financial planner, author and CEO of his own wealth management firm, but he is a down-to-earth guy who served his country in Iraq.  Not exactly your stuffy, buttoned-up financial adviser.  If those credentials don’t inspire you to follow Jeff, perhaps these will:

“…I’m obsessed with In-N-Out Burger, can deadlift over 500lbs, and may have threatened to punch some other financial advisors in the face.”

asdf (goodfinancialcents.com)

5.  The Simple Dollar

Trent Hamm saw meteoric growth in his blog in the first few years.  Still, it doesn’t seem to have changed him.  He consistently cranks out inspiring, thought-provoking articles on daily basis – at a pace I find enviable!

(thesimpledollar.com)

 

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The economy is improving. When this occurs, the job of the investment banker is in demand, and it has a wonderful outlook. Many vice-presidents started as investment bankers, and this is true of managing directors and partners as well.

Even though investment bankers are highly coveted professionals, not everyone knows exactly what these people do. After you learn the investment banker’s job description and the investment banker’s salary, you may believe that entering into this profession would be worthwhile.

What Does an Investment Banker Do?

When executives with an organization need to raise capital, they seek the assistance of investment bankers. Investment bankers work very closely with these executives because each entity is distinct with different needs and capabilities.

Raises Equity Capital or Debt Capital

Executives with a company or an agency know that they must raise equity or debt capital, but they may not know how to go about doing it.

This is the job of an investment banker as well. He or she will determine whether it is possible for a company to raise equity or debt capital and will develop the most advantageous strategy for doing so.

Ensures That Everyone Follows the Rules

Executives must follow the rules and regulations set forth by the Securities and Exchange Commission, but not everyone knows what these laws are.

Investment bankers are one segment of the population who do know these laws, and they ensure that their clients follow them when they are engaged in raising money for their companies.

Brings Investors and Entrepreneurs Together

Executives with a company or a government agency turn to investment bankers because they have access to a network of private and institutional investors.

These investors are the ones who have the money that companies and agencies need, and investment bankers are the ones who put these two different groups together.

The Investment Banker’s Job Description

An investment banker draws up the agreements for mergers and acquisitions. When companies are experiencing financial difficulties, an investment banker studies their books to find out what is going wrong. Then, he or she offers a solution to the problem.

An investment banker also takes part when a company releases its stock. In some cases, the investment bank is the underwriter for the company’s stock, and the investment banker searches for people to purchase these shares.

Lastly, investment bankers manage the investments their clients make.

The Investment Banker’s Salary

The investment banker has the potential to earn more than $100,000 a year. Generally, an investment banker is required to have a master’s degree in business administration or MBA, but people can become investment bankers with only a bachelor’s degree.

An investment analyst receives the lowest average salary at $56,637 a year. The highest earners are the top investment executives, and they earn close to $250,000 a year.

Investment bankers receive substantial bonuses at the end of the year, so their salaries are often much higher than the figures listed above. This is true even for those who are just starting their careers and do not have any experience.

Therefore, a new investment banker who earns $60,000 a year actually receives between $90,000 and $100,000 for the first year because of bonuses.

Similarly, the top earners can make more than $500,000 because they earn three times or even four times the amount of their base salaries.

This article appeared in the Carnival of Money Pros hosted by The Better Credit Blog.  Thanks for including our post!

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