I want to start a club. Here are the particulars.

First I need a rich friend. I think about $50 billion would do it.

Then I need about 10,000,000 participants.

I wouldn't give my "friends" money, but I would pay for $5000 in expenditures. Buy anything you like. Go on vacation. Fix your house. Go to the finest restaurants. I don't care, just as long as the places you shop are part of the club.

I really want you to spend the $5000 as quickly as possible. And I don't want you to ever pay me back. In fact, the best thing (for me) is to have you just pay me the interest. Forever. That's all I ask. Sound like a good deal? Do you want to play?

Well, if you have a credit card, you are playing.

And in my scenario I would make about a billion dollars a year if I could just clear 2%. That's called arbitrage. And it's for this reason that I got away from the finance industry and especially Capital One.

My last few weeks at Cap One were spent trying to figure out the best way to get high school students and non-bankrupt default users into the fold. But going to work every day was a chore. I often thought of two things my dad taught me.

First, nobody every borrowed their way to wealth.

and

Second, those who understand interest earn it, those who don't pay it.

There is a reason that I get, on average, two credit card offers every day. And it's not for my benefit........
8:38:09 PM    comment []