Credit Card Debt: Face It, Then Fix It

Too many Americans are in the dark about how much they owe, what their interest rates are, or even how many credit cards they have. The truth is, credit cards can be tools—if used wisely. But carrying a balance month to month? That’s a recipe for trouble.

The only two reasons I consider “acceptable” for credit card debt are unexpected medical bills and long-term job loss. Anything else is likely a sign of overspending or relying on “buy now, pay later” schemes that snowball into long-term debt.

If you’re stuck, here’s my 5-step plan:

1. List all your cards.
2. Write down your balances.
3. Track each card’s interest rate.
4. Make the minimum payment on all of them.
5. Direct any extra cash to the card with the highest rate.

Avoid raiding your IRA, borrowing from your 401(k), or using home equity to dig yourself out. And please—steer clear of those “debt relief” companies making bold claims. They’re often scams.

Stock Options: Diversify or Regret It

If your employer gives you stock options, it’s tempting to hold on. But unless you want to risk ending up like the folks at Enron or Lehman Brothers—jobless and with worthless stock—consider selling those shares once you’re allowed.

Don’t keep more than 15% of your total investments in company stock. Diversification is not just a buzzword—it’s essential to protect yourself from volatility. Professional investors cap individual stocks at 3% of their portfolios. You should too.

Understand RMDs or Face Big Penalties

Required Minimum Distributions (RMDs) can trip up even the savviest retirees. Don’t wait until you’re 70½ to figure them out. You need to take your first RMD by April 1 of the year after you turn 70½—but doing so may mean two withdrawals in one year, which could spike your taxes.

My advice? Take your first RMD before December 31 in the year you turn 70½. Hire a tax advisor to make sure you stay compliant and avoid the 50% penalty for missing a required distribution.

Smart College Planning with Financial Aid and 529 Plans

Kim Clark shared valuable tips on making college more affordable. One of the easiest things you can do? Apply to multiple schools. Doing so can increase your scholarship opportunities by 30%.

Fill out the FAFSA early. It’s what schools use to put together your financial aid package, and knowing you’ve applied to competing schools might get you better offers.

Also, don’t ignore community colleges or study-abroad programs. Many international universities offer low-cost or free tuition if you’re willing to study in another language. And if you’re saving for education, use a 529 plan—it grows tax-free and gives you flexibility on who the funds can be used for.

When to Let Go of Real Estate

Rao was facing a tough decision: sell his townhouse at a $40,000 loss or hang on. I advised him to cut ties. Emotional attachment is real, but it shouldn’t hold you back from making sound financial moves. Let the first decent offer be the one you take—move on and free yourself.

Rethinking Retirement Relocation

Not everyone needs to head for the Florida sunshine. In fact, most retirees stay within 20 miles of where they currently live. It’s not about palm trees; it’s about being close to people who matter. Before you buy that dream home across the country, think twice. Retirement is as much about lifestyle as it is about location.

All information provided is for educational purposes only and does not constitute investment, legal or tax advice; an offer to buy or sell any security or insurance product; or an endorsement of any third party or such third party’s views. The information contained herein has been obtained from sources we believe to be reliable but is not guaranteed as to its accuracy or completeness. Whenever there are hyperlinks to third-party content, this information is intended to provide additional perspective and should not be construed as an endorsement of any services, products, guidance, individuals or points of view outside Edelman Financial Engines. All examples are hypothetical and for illustrative purposes only. Please contact us for more complete information based on your personal circumstances and to obtain personal individual investment advice.

Neither Edelman Financial Engines nor its affiliates offer tax or legal advice. Interested parties are strongly encouraged to seek advice from qualified tax and/or legal experts regarding the best options for your particular circumstances.

The post Common-Sense Strategies for Debt, Investing, and College Planning appeared first on ROI TV.

Banks Profit When You Overspend
Ever wonder why banks make it so easy to get a credit card? It’s not out of kindness. Banks love it when you spend money you don’t have—especially if you only pay the minimum balance.

Why? Because they’re raking in interest rates as high as 25%. On a $6,000 credit card balance, that’s over $1,500 in interest a year—going straight into the bank’s pocket. They also push larger mortgages and car loans because their cut grows with your debt. Bottom line: when you spend foolishly, you pay them to get richer.

How Fractional Reserve Banking Really Works
Banks only keep a fraction of your deposit and lend out the rest. So when you deposit $100, the bank can lend out $90, and that $90 gets redeposited at another bank and lent out again. This amplifies the money supply, helping banks profit multiple times off a single deposit.

This system works—until it doesn’t. A massive bank run (everyone pulling their money at once) could collapse the whole thing. That’s why FDIC insurance exists, covering up to $250,000 per account. It’s not perfect, but it’s your only safety net in a fragile system.

Saving Money Can Make You Poorer
Traditional savings accounts pay around 0.41% interest, while inflation might be running over 4% per year—sometimes much higher. That means your cash is losing value every day it sits idle.

Example: $100 in a bank might grow to $105 in five years, but the cost of the same $100 item will rise to $123. You’re effectively $18 poorer just for playing it safe. Yes, you need savings for emergencies—but once you’ve got your cushion, start investing.

Become an Owner: Invest in Banks, Don’t Feed Them
Instead of paying banks interest, how about earning their profits? Banks like JPMorgan Chase and Bank of America pay dividends between 2.4% and 4.9% annually. That’s actual cash in your pocket just for owning their stock.

As a shareholder, you also benefit when stock prices go up. It’s a smarter way to engage with the system—you profit when the banks profit. While every investment carries risk, you’re flipping the game: from a consumer losing money to an owner making money.

Why Financial Education Matters More Than Ever
The current system favors investors, not savers. But schools rarely teach you how to invest, buy assets, or build wealth. So most people stay stuck in the employee-consumer loop, making banks and corporations richer.

To break out, you need to:

• Learn how money really works
• Understand where to invest strategically
• Stop throwing money at liabilities like luxury goods and high-interest debt

Knowledge really is power here.

Credit Cards: Stop Owing and Start Owning
The average American carries $6,000 in credit card debt, often at 25% APR. That’s insane. But instead of just paying it off, take the next step: invest in credit card companies.

These companies generate billions off consumer interest. If you own their stock, you get a piece of those profits through dividends and capital growth. You stop being a victim and start becoming a stakeholder.

Start Here: Market Briefs Makes It Easy
If all of this feels overwhelming, start by subscribing to the Market Briefs newsletter. It’s a free, daily update on the economy, markets, crypto, and real estate—written in plain English.

Plus, you get a free investing master class just for signing up. It’s financial education on your schedule, helping you stay ahead of the system instead of falling victim to it.

Final Thought: You Can Beat the System by Owning It
The system is designed to enrich the people who own it. Don’t just be a consumer. Don’t just be a borrower. Become an owner.

• Own bank stocks
• Own dividend-paying companies
• Own your financial future

That’s how you flip the game—and start building real wealth.

Jaspreet Singh is not a licensed financial advisor. He is a licensed attorney, but he is not providing you with legal advice in this article. This article, the topics discussed, and ideas presented are Jaspreet’s opinions and presented for entertainment purposes only. The information presented should not be construed as financial or legal advice. Always do your own due diligence

The post How Banks Make Money Off You—And How to Flip the Script to Build Wealth appeared first on ROI TV.