I am calling all FWFers who have already done the AOR, already done the 0% balance transfers and have money to move, and already have done (or are doing) the HSBC 4.8% online savings, WHAT NOW? I have some ideas (trading stock options), yet I am looking for less riskier ones.
BACKGROUND ON AOR First Thanks FWF for all the help assistance and information. Especially all the AOR RAMA veterans xerty (http://www.fatwallet.com/t/52/425743); Bksavings (http://www.fatwallet.com/t/52/592813); eugenev (http://www.fatwallet.com/t/52/541760)
Also, I am a huge lurker of FWF veterans - Clearanceman, Davehanson, mbaker4096, SIS, and Didyousearch. While I became addicted FW via the investment/rental property thread (I read the whole thing one weekend as I have rentals in TX) via FW I learned that my very good not great - credit score of 780 could be used for something more than a good mortgage rate. Pursuant to lessons learned at FW, I did the AOR thing, I now monitor my FICO at privacyguard (2 month trial period) and myfico.com (( 20% off membership) with codes found both here and at www.creditboard.com))
After my recent AOR I have the following CC:
Cards received where I will (or already have done) a 0% BT Chase Cash Plus Rewards 5% Cash Back, $100 GC and 0% 12 months - $48,000 CL (combined old lines to new cards) Citibank Platinum Select 0% 12 months - $32,000 CL (combined old lines to new cards) Citibank Professional $100 GC and 0% 12 months - $25,000 CL Schwab $100 GC, 1.9% 12 months - $28,500 CL RBS 0% 12 months - $15,000 CL HSBC 0% 12 months - $12,000 CL Advanta Business Platinum 0% 15 months - $16,000 CL Schwab $100 GC, 1.9% 12 months - $28,500 CL HSBC 0% 12 months - $12,000 CL Discover 0% LIFE - $15,000 CL (Begged for more CL they would not give me a higher CL and told me I did not have enough DEBT to necessitate Are they getting keen to 0% people) BOA 0% 12 months - $7,200 CL Att Universal 0% 12 months - $5,000 CL
Cards received where I will not do a BT: American Express BLUE $5,000 CL American Express Platinum Business $25,000 credit limit, $250 statement credit American Express Gold Business $250 statement credit (already had one, cancelled it and got new one for 1 year and $250 statement credit) (http://www.fatwallet.com/t/52/595755 - thanks GTFAN)
I also opened up a Citibank banking inet acct and will link a credit card for the $200 need to keep $1,500 or 2 bill pays per month or there will be a maintenance fee
What I have learned so far.
#1 I did do the AOR thing all over 2 days over 5 weeks ago. My fico score has not dropped that much due to inquiries. It really was a non-issue. So far knock on wood.
#2 Certain CCs really liked that I had large no-debt credit lines. Citibank, Advanta, Schwab. Other CC- namely, Discover CC did not at all and would not grant me a higher CL on its 0% for life. I begged for more threatened and asked for retention, yet they would not give me a higher CL and told me I did not have enough DEBT to necessitate it ??? (WTF?!) I wonder if they are getting keen to 0% people)
#3 I initially desired to keep each CC utilization under 50% for fico protection, yet as inquires and new credit lines appeared on my report and my fico did not drop, I could not leave money on the table ( a la mbaker4096) and am 85-90% utilization on each 0% card.
#4 I opened an HSBC online savings 4.8% and free checking accounts to pull money from my credit unions. The online savings was simple. I talked to someone on the telephone to open up the checking and it is still FUBAR very frustrating.
#5 I called each card and asked for the % minimum payment, total the estimated payment and will put 2X that amount in HSBC checking for money to be pulled via each CC auto pay. At this juncture, I am not worried about paying over the minimum (this issue raised in another thread)
#6 I make sure to make a small purchase and pay it off every 6 months on all my non 0% BT CC so that none are cancelled and are available for other 0% offers especially very old lines that help fico.
#7 I am on google-mail (gmail). And, I have folders (labels) to keep copies of all scanned promos (chase GC offer); confirmations of 0% transfers as they are made; and payments (folders per CC and each month) so as to never miss a payment. Gmail is terrific.
#8 CC associates get BIG gift cards/reward points when they do the 0% BT for you. I only do BT via telephone (DYD, davehanson) and I get everything I need from the associate first. If they have any a-hole charateristics dial tone and recall for more helpful associate.
# 9 I transfer all the BT offers into my checking either directly or through my debit card (yes, I am one of those people who carry a debit card) except CITI who made me take a check?
Problems:
#1, 2,3,4, and 5 Me, me, me, me, and me I have an addictive personality. I was deep in the inet tech nazdaq trading in 1993-2001. Made great money. I have been buying gold maple leafs for the last 3 years and have been tempted start selling a few via eBay given recent gold spot ($600/oz yea!). It is very hard to now JUST STOP and only get 4.8% on my money. This aint fittin in with my personality. I have been seriously thinking of doing more with the money for a greater ROI. But I do not want to be too risky after all this is not my money.
So calling all FWFers who have already done the AOR, already done (or doing) the HSBC 4.8% online savings, WHAT NOW? I have some ideas (trading stock options), yet I am looking for less riskier ones.
Thanks in advance
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There are plenty of 5%+ short term cds out there. You can even do better with some credit union cd deals and short term bank promos. Set enough money aside in a high yield savings or money market account to cover your minimum payments and stash the rest in cds and/or promo accounts. The strategy is here - CC BT investment thread. The rates are here and here.
The way I see it, your investment options are limited to the very short term. If you lock up this money in an investment that cannot be liquidated (at least favorably) it could be disastrous. I don't need to remind you that this is not your money. You can leverage yourself into some speculative positions, but be sure you can cover yourself with excessively conservative stops and be able to cover your position if you get called. Good luck and don't let your gambling instinct take over this amount of money, or your App-O-Rama to make a few extra K per year could end up costing you big.
I am thinking about either foreclosures when the bubble bursts, stock options on stocks poised to move - i bought RMBS, yet i could have retired with the same $$ in options. Hell,i was thinking about buying maple leafs in bulk and selling on eBay. The mark-up on that site is insane for a single leaf/krugerrand. Yet i have done the eBay thing before and the listing, selling, and paypal fees make you sick (even though i usually overcharged for shipping). But i am so far beyond eBay mentally (kid's play), i would hate to go back.
Not completely risk free - but you could consider an options strategy with say a 5% downside protection? Look at ADR's/GDR's and the pricing of the underlying securities. In several cases I've seen arbitrage opportunities exist; I haven't looked into the transaction costs but it might be viable. Emerging market debt perhaps - several countries pay a fair bit above US rates and carry little risk of defult in the short run.
I have not run the number, but buy $5,000 - $7,500 worth of leafs/krugs online (no shipping fee for these amounts) and then split the coins up and compare to what each one is gettin online - i was sure i saw a 8-10% premium paid on eBay for single 1 oz. coins. I will get more exact numbers and get back with you. Remeber also many eBay sellers are making profit on s/h
oddball1 said:Not completely risk free - but you could consider an options strategy with say a 5% downside protection? Look at ADR's/GDR's and the pricing of the underlying securities. In several cases I've seen arbitrage opportunities exist; I haven't looked into the transaction costs but it might be viable. Emerging market debt perhaps - several countries pay a fair bit above US rates and carry little risk of defult in the short run. Can you please explain the arbitrage opportunity? How do you sell the underlying shares to take advantage of the arbitrage?
danimal67 said:I trade stock options multiple times a week. I cannot believe anyone would consider putting money from a BT into stock options. That's crazy.yes
How much more are you going to get? 5% more, 7%? It's not like you'll win the lottery . 4.8% is more than enough considering no risk at all. If your tax rate is high enough, I'd consider tbills.
Excellent job documenting your progress so far. Although I tire of new "me too" AOR threads that crop up every couple weeks on FW, yours provides a lot more useful information than other recent ones and mentions a couple cards I'd missed!
As for where to put your money. This is basically the "how should I invest $XX" question with the added twist of risk management being more necessary (since it's not your money). I'd be willing to bet you already have some great ideas on where to invest $150,000 in general (you've certainly proven yourself willing to put in the legwork required to research money making opportunities), but you're hesitant to put BT into those same ventures. I'd stick with the investment ideaes you're already considering, applying risk management considerations. In a nutshell this involves estimating your maximum potential loss over the BT period (considering investment of your $$s AND the BT $$s) and making sure such a loss wouldn't cripple you financially. If it would then only move as much BT money out of savings as is appropriate to meet this criteria. For example let's say you're looking at a mutual fund that based on a statistical analysis you're 95% confident will lose no more than 30% in the next year. If you have $150k of your own money + $150k of BT money such a loss would cost you $100k, leaving you with $50k after paying off the CCs. If you could afford such a loss then you might consider the mutual fund opportunity. Could go into more detail, but my next client is here...Again, I think you need to focus on the risk management angle in formulating your plan.
How much more are you going to get? 5% more, 7%? It's not like you'll win the lottery . 4.8% is more than enough considering no risk at all. If your tax rate is high enough, I'd consider tbills.
IMO, the risk does not justify the reward.
If you have to gamble, gamble with your own money
Gambling big with other people's money is the best way to do it. (eg real estate speculation)
How much more are you going to get? 5% more, 7%? It's not like you'll win the lottery . 4.8% is more than enough considering no risk at all. If your tax rate is high enough, I'd consider tbills.
IMO, the risk does not justify the reward.
If you have to gamble, gamble with your own money seriously...if you can get 5%+ with ZERO risk, dont take 100% risk just to earn maybe 10%. Sell stuff on eBay, 20% discount giftcards, or other things with low riks of los and greater returns. Otherwise you might as well put it half of the BT money on black, and in 30 seconds youll either be 50% up or 50% down, and be done with it.
While your thread was well researched and composed, I negged it for the following reasons: it IS just asking what do i do with $xxx, and worse, its just an example of GREED getting the best of you. AOR/BT strategies do not work out once GREED takes over. There are a lot of impressionabe and naive copycats here trying to play the BT game with smaller #s, and may be more likely to try riskier strategies to earn more when they see threads like this/ Call me paternalistic.
I agree with all the low riskers. I am on your team. If i was a riverboat gambler, i would not have asked the conservative and wise that comprise FWF for advice.
I am not looking for stock tips (i can find those myself),and I am not looking for the next 12dailypro.
i know the pit of your stomach feeling of holding options as expiration looms. i was glued to a computer for YEARS. (BUT i loved it!) I am just coming to the FWF trough one more time and, i know many here, are at the same juncture.
I have received many great ideas here. I do not want to lose my credit, investments, family life to make 2 more points. However, in my world, some investments which are deemed riskier to some are simply not to others.
I revere you! And you negged me. OUCH! That hurts. But,, I am a big boy and can take a punch. I understand. But I had not intention to turn this into a high risk tread. I was just looking for ideas in the FWF domain. I thought this was timely as others are here. As for greed, I take care of a lot of people - they love my advice, but they need my $$. I am just joe average trying to stay ahead of the curve.
No offense to you, and I tried to explain the reason for the neg.
If you want to make more $$, look here sometimes having some seed money can allow you to make even more in these ventures, with low risk.
for example, I could take 145k and buy 30-60 cheap used cars. I typically make at LEAST $2k on each, so thats 60-120k profit. And even if I cant, Im not gong to lose money...i might just sell for what I paid. so theres a potential 100% return with nearly 0 risk of loss. And its all short term investments that will be done befoe Bt promo ends. Same with buying /reselling stuff in hotdeals on eBay. Huge profit potential, almost 0 risk of loss thanks to store return policies. But it takes more legwork.
I guess I just see big downsides to using high risk funds (BT funds from CC) for more speculative type investments. So I guess call me risk averse. Also with the generally short term nature of BT funds RE foreclosures seem poorly suited due to the fact that you absolutely would have to flip the property quickly to cash out your funds when the money goes back to the CC companies.
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. 4.8% is more than enough considering no risk at all. If your tax rate is high enough, I'd consider tbills. 
