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Author: TMFTaurean Big gold star, 5000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 8880  
Subject: Re: Dividends vs CDs Date: 5/14/2008 7:57 AM
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I understand your point and perhaps I didn't express my notion completely. My use of credit cards would be for convenience in the very short term...like an emergency need for thousands of dollars immediately. My (more complex) plan would be to pay that borrowing off within weeks by liquidating DRIPs, for example, starting with my laggards. (I have over 70 DRIPs.) An additional fallback is the fact that I'll be 59 1/2 next January, so I'll be able to tap into Roth IRA or 401k money "normally" in an extreme emergency.

I understand your points and figured you had thought a lot of it through and were in a decent situation to have that sort of strategy in place, based on what I've read from you on your past posts to the boards.

However, I think that this sort of strategy is only appropriate for the minority of folks who are as in as much of a fortunate situation as you are. Unfortunately too many folks these days rely too much on credit as a crutch and take way too many risks with it. So I felt it was important to present that counterpoint to your original post to present both sides and the potential pitfalls of such a strategy for folks who are not in a similar situation. Thanks for clarifying your original position as it helps present a more complete picture.

The notion of using credit cards only comes into play because I have learned to use them to best advantage, always keeping them paid off and even getting up to 5% cash back on purchases.

We do the same thing here. We pay for almost everything on our rewards cards (we have 2, one for cash back rewards to a brokerage account and another that kicks back cash to our daughter's 529 account). We pay off the balances faithfully every month. Another added benefit is that you have a record of where and how you are spending your money, especially with downloading all the transactions into a financial management package like Quicken (or MS Money) and categorizing them all.

It also helps having paid off my mortgage and buying vehicles with cash...:)

Amen to that. Nice job. I envy you, my friend... ;-)

Fool on!
Mark
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