For years, I tried to stretch my money to its maximum potential. Moving money across different online savings accounts for better rates, taking money out of my checking account as soon as it’s there, paying bills on the last possible day to get more interest,…, the list goes on. Basically, whatever you can think of to earn a few extra dollar or two of interests, chances are good that I’m doing it. My motto was simple – two dollars is better than no dollar.
It was fun at the beginning, but as the number of accounts and bills I needed to keep track of began to pile up, managing the cash flows became a mini part time job. At times, it was even a little stressful because inter-bank transfers take as much as three days.
Many of you know about my shift into passive investing through a diversified portfolio of ETFs. Again, I’m not in the camp that believe stock picking isn’t a better investment. It’s just that when I weigh the burden of the part time investment analyst job that comes with active investing, it’s not worth it.
Along the same lines of thinking, I will stop being a cash flow specialist. In order to do so, I will:
- Keep money in the checking account as a cushion for monthly and credit card bills
- Setup automatic bill pay, so no bills will ever be late. In cases where automatic payment is not possible, I will pay the bill as soon as it arrives.
- Potential lost of interest is expected to be less than $50, which is well worth the lack of stress.
No more messing around with moving money in and out of different accounts to earn more interest. No more stressful days as I impatiently check for transfers to go through. No more reminders about when bills are due. Yeah there’s some lost of interest, but the lack of stress will more than make up for it.
Sometimes, the choice that leads to more money isn’t the correct one.