I'd agree with you about the 12% but that's his shtick that's how he creates revenue for himself, I doubt he could sell what he sells promising 5% as my FA did. ...
It says a lot that as a financial guy, he misrepresents this basic and important financial concept to his audience, to make revenue for himself.
... With how much personal/mortgage/student loan debt as we have (in the US) perhaps he isn't getting the word out enough.
...
Debt is a tool, it exists out there, people ought to be taught how to use it, and recognize when it can be used to their advantage. My point is he gets the wrong word out. Going back to an analogy, it's like saying instead of taking a safe driving course, just don't drive - it's dangerous.
... You must be a real smart guy taking thousands of dollars away from the credit card companies and never spending a penny more, perhaps you should have a show of your own? I'd be a listener. ...
Yep, that's the DR spiel that is a bit insulting and a bit snarky, and worse - not helpful to his listeners.
It does not take much in the way of 'smarts' to realize the advantages of a credit card. I get 2% to 4% back on every dollar use it for, no annual fees. I use it for as many purchases that I make as I can - yes, that adds up. Why would I throw those rewards away? In what world would I be better off w/o that extra 2%-4%? That's not being financially responsible. And it is more important to people with less means than I have - they really could use that extra few %.
In addition the CC provides some protections, there is a grace period, so that gives you a little time to arrange the funds to pay it off - it doesn't hit your bank account instantly like a debit card. That allows me to keep a bit more money invested and working for me, instead of as a buffer in my checking account.
And like so many others, I don't spend a penny more - that's because I understand that money is money, the source is irrelevant. It's not rocket science. I buy something because I need it, or have decided it is something I want, has value, and that I can afford it. So I use the source that works the best, and that is almost always credit cards. Cash can be lost, you need to take it out ahead of time (less money working for you). If having a card versus cash affects how you spend - that should be addressed, so that you can take advantage of the CC.
Same with a mortgage - in a recent thread, I realized I'm over $50,000 ahead just from a re-fi of my mortgage in 2002, rather than paying it off. That's some real dough. And even if I did it at exactly the worst time for stocks in that period, I was only short a few dollars.
... Why do you use credit cards, I'm sure you do well with your investing? Is it just so you can make thousands off of the cc companies? ...
There is no connection there - this is the kind of illogical, unhelpful thinking DR gets into. I recall this was another part of DR's spiel - a DR fan pointed me to one of his videos, DR says something like "
I never met a wealthy man that says it was CC rewards that were what made him rich". Well, I'm not claiming that either, it is a silly claim, totally irrelevant - but it sure helps me financially. It all positive, why would I reject this?
Illogical - a person could do well/poorly with investing, and use/not-use credit cards. There's no point in that question. I make thousands from CC and mortgage debt
in addition to good investing. It's not either/or, and there is no reason not to do both. Why would you say "just so" I can make thousands off the CC companies? Isn't that reason enough? Again, this isn't rocket science - I buy & hold broad based index funds, and make sensible purchases with whatever money form makes the most sense.
The fact that you ask these questions this way is a sign you are caught up in DR's irrational thinking. He loves to paint these CC companies as 'snakes' or evil or something. It's crazy. Like a few of us said earlier, you are better than this, think on your own, DR will hold you back.
It was! And to you and yours!
-ERD50