Break All The Rules

The world of personal finance can be so complex that it cannot be accurately represented with any rules or strict guidelines. This is why it’s so hard to give financial advice. Unless we know absolutely everything about someone else’s finances and personality, it’s nearly impossible to give them proper guidance and tell them what they need (not want) to hear. We can be as honest as humanly possible with our sincerest suggestions, but to think that we know what’s best for them especially if we haven’t been in their shoes, may be a bit vain. SoΒ I believe there is simply no such thing as universal rules when it comes to financial management. Every time we come across one of those “Top 10 Rules to investing,” or “…to get out of debt,” or “…to plan for retirement,” or whatever else, we must look at it as only rough guidelines, and nothing more πŸ™‚

The golden rule is that there are no golden rules.Β  ~George Bernard Shaw

Rules are meant to be broken anyway. I break generally accepted personal finance “rules” all the time, like choosing to pay high bank fees instead of keeping the minimum balance in my account, or buying a car when I still had student loans, or using consumer debt to buy a $2,250 souvenir, or not having an emergency fund, or agreeing to purchase a property when I have no savings. Lately I decided to carry a $5,000 credit card balance, which is arguable another no no in the personal finance community, except I think I can be forgiven this time because my interest rate is only 1.9 percent πŸ˜€

13_06_transferbalancejpg, break all the rules, credit card balance transfer

Once in awhile I get these cheques from my credit card lender, TD. I can use them to spend on anything I wish. This was my last chance to get in on the deal because after this month they will not be sending out any more of these blank cheques :*( Β With no time to loseΒ I wrote $5,000 on one addressed to myself πŸ™‚ and deposited it into my CIBC account. This works out perfectly because I need money for my farmland downpayment so by happenstance I’m now $5,000 closer to buying that property πŸ˜€ There IS a 1% transfer fee, so I paid $50 for this service but I think it’s worth it in the end πŸ™‚

Following mainstream rules like credit card debt is bad, but student loan debt is good, will limit our options to raise capital and create wealth. By being more agnostic to what others say and focusing on our own situations we can achieve so much more πŸ˜€ There’s no such thing as rules, only suggestions.

If I’d observed all the rules, I’d never have got anywhere.”Β ~Marilyn Monroe

Random Useless Fact:Β 3 – 4 cups of green tea each day can boost your metabolism by 4% which burns 50 to 100 extra calories a day.

Notify of

Inline Feedbacks
View all comments
06/05/2013 7:41 am

I have done the same several times, with 0% balances and a 3 or 4% transfer fee. Just repaid a $7K one last month. It is great for responsible people to get cheap and hassle free credit, however for most it can be a really risky move.

John S @ Frugal Rules
John S @ Frugal Rules
06/05/2013 8:28 am

I say that if you can make it work for you and you know what you’re doing then go for it. Leverage can be a great thing if you can make it work in your favor…which you are. The problem, at least in my opinion, is when someone tries to leverage something and has no clue what they’re doing. It comes down to being smart about it and looking for opportunity I think.

06/05/2013 4:04 pm

Hi Liquid,

Thanks for the mention.
In fact, i am more than a pro, I am the Queen of credit card balance transfer, among other πŸ™‚

Searching for Happy
Searching for Happy
06/05/2013 7:16 pm

Good advice. Thinking outside the box can find you solutions that you wouldn’t always find. Who can argue with 1.9%?

06/07/2013 8:35 am

I’m getting 0% rate with 1% transfer fee for $22500 for 12 months from three different credit cards. I use those money to invest in stocks and pay them back using margin loan, then rotate from credit card. Collecting dividends from high quality companies without investing a single dollar. I know it is very risk, but risk is reward.

06/07/2013 3:24 pm

I got a 0% balance transfer from MBNA Smart Cash, but they charge you 1% for the balance trasnfer fee. So I actually paid $80 on a $8k loan for the next 9 months. Stupid me, I charged some of my grocery and gas to the same card… that $200 balance will be charging at the rate of 14.99% till I pay the entire balance transfer off. Another thing, if you miss a minimum payment, then you will lose your promotional rate.

mochimac @ save. spend. splurge.

I can’t say I agree with your methods and rationality completely, but I agree that it’s your money and I haven’t been a saint either, breaking rules left and right.