Blog — MFYC FINANCIAL

Leveraging

I do not believe any one is an advocate of having debt, however I do believe if you are capable of leveraging debt towards attaining assets and earning capital then that would most certainly be the exception. As for me personally, I only have one large debt which is my primary residence, and here is where my story begins with leveraging debt on top of debt for the best possible outcome. Right now as I’m currently blogging and sharing this information I am renovating and will soon convert my primary residence into a rental property to acquire passive income and continue to buy more property as time continues. Even though one of the largest expenses can be considered living expenses, however with House Hacking it can make your living expenses almost non existent. I began “house hacking” and rented out the rooms to trust worthy individuals where the rental income gained monthly paid for my mortgage and at the same time my home gained equity.

My mission is to find creative ways to save, earn income, and pass the information along to as many people as possible, because let’s be honest who learned this information in school, from their parents, or from their friends? I believe investing and diversifying so that you may have many streams of income and that you do not solely depend on one. My recommendation is utilizing the financial vehicles that best suits your needs and your goals; such as a 401k, Roth IRA, real estate, index funds, high yield savings accounts, and employee stock purchase plans in order to make your dreams to gain financial independence come true.

My belief is that if you are disciplined with your finances, budgeting, and you have a credit score over 700 there are two premium credit cards that I personally recommend you have in your wallet and that is the Chase Sapphire and the Capital One Venture card.

Benefits of having credit cards.

Earn cash back rewards and travel rewards after every purchase
Earn large bonus offers upon signing up
Provides more buying power
When you have a low balance it’ll display as low credit utilization which reports positively to the NCRA (National Credit Reporting Agencies)
On time payments are reported which also helps your Fico credit score

Drawbacks of having credit cards if not managed properly

Large interest rates and fees
Negatively effects your credit once over 30% utilization
One late payment can drop your score between 50-100pts
Closing out existing credit cards eliminates any positive payment history you might have had with that credit card and will drop your credit score.

CREDIT CARD HACKING SIGNUP BONUSES 101

I signed up for two new credit cards last year, one at the beginning of the year and the other credit card in the middle of January 2018 with the highest travel rewards I’ve seen. The Capital One Venture Card had a $500 sign up reward bonus that could be redeemed for travel (airfare and hotel stay). It required a minimum spending of $3,000 within three months and would require “good” credit, over 720 at the time. I do not recommend “spending” $3,000 or any amount of money to redeem a bonus unless your money was already intended for a set budget for specific expenses in your life. You want to make sure to be smart about how you utilize credit cards.

“They say rich people get paid interest and everyone else pays interest”

Fast forward, I wanted to start remodeling my master bathroom and recalled a video on youtube about travel and cashback rewards on credit cards. I said to myself, “how can I lower my expenses while investing in material (tile, drywall, grout, new sink, and plumbing) and let us not forget about labor?” I quickly spent (invested) over $1,500.00 in material and labor combined and charged it to my new Capital One Venture card. Also during this time I charged my every day expenses, such as utilities, groceries, and basic necessities on this card and made sure to pay off the balance right away. My intent and game plan was in motion, earn as many points as possible to redeem as cashback, fulfill the prerequisites for the signup bonus within 3 months, and never pay a dime in interest. I was able to reach all the requirements much sooner than I believed, within a month and a half I already met all the requirements. VOILA, the following month I had over $500 dollars of free travel ready to redeem. Fast forward to today’s date I just duplicated the same thing with the Chase Sapphire card, but this time with $625 in travel or you can redeem $500 cash value. With these two cards I earned $1,125.00 effortlessly and quickly. I am fond of the Chase Sapphire and is currently my preferred choice but not by much and my number one tip is to make sure to use your credit cards wisely and to never abuse or rely on them.

Sign-up bonus

These cards’ standard sign-up bonuses vary in value depending on how they’re used. The value of Capital One miles is a flat 1 cent, while Chase Ultimate Rewards® points vary in value according to how you redeem them. The bonuses:

Chase Sapphire Preferred® Card: Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®.
Capital One® Venture® Rewards Credit Card: Enjoy a one-time bonus of 50,000 miles once you spend $3,000 on purchases within 3 months from account opening, equal to $500 in travel.

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