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You all have heard those commercials from Capital One? What’s in your wallet? They even have famous actors like Samuel L Jackson and your favorite sports athlete asking you what ‘s in your wallet.

Well, I am going to tell you that those guys on those commercials have a ton of money in their wallets to get you to use the credit cards from Capital One. Their wallets are fat from getting pay to fool you into getting into debt. I can tell you what is not in YOUR wallet. Money? All you have in YOUR wallet by using this evil invention are debt and getting deeper and deeper into debt and forget about reaching financial independence.

Let me break down for you how credit card companies make a killing on getting people to get their debt high.

Interest Rates

Yes interests rates will get you in trouble quickly. Most credit cards carry an interest rate that hovers around 20-25% annual interest rate. I have even seen 30% interest rates on some Mastercard and Visa cards. This is where they make most of their money. Oh yes, there are other ways they also make money. I will get to that later on this post.

Okay, let’s use an example. Say your credit card balance is $10,000 and your interest rate is 25%. If you don’t pay the balance and just send the minimum balance (often low payment like $200). Then simple math right.

$10,000
0.25 =

$2,500

Yes, that is right. You are giving them $2,500 a year for carrying a $10,000 balance. That is 1/4, one quarter of the balance. Image if you carry a $20,000 balance? Yes, definitely what’s in your wallet is not your money. It is the money you are giving to the credit card companies.

Stock market or any other investment

Think about this for a minute. The stock market average return is around 10%. $10,000 you will get $1,000 return in one year right. Now compare what the credit card companies are getting from your silliness of spending money that you do not have. $10,000 x 25% = $2,500 compare to $1,000 from the stock market. Yeah, that is a great investment by the credit card companies. No way they can get 25% from the stock market. They make more money from getting you to carry a debt and making them rich or making the stockholders of these credit card companies rich or I will be more sinical, making the actors, who are convincing you to carry a debt, richer.

The minimum payment trap

When you get your credit card statement you often see a minimum payment there which is like 1% of what you owe. For example, you owe $10,000 and the minimum payment is like $200. Most people think that if they send the minimum payment then they are all good. Wrong. The reason they put that minimum payment amount so low is to keep you indebted and enslaved to them, so you always carry a balance and continue to pay interest rates.

Never, never send the minimum payment. Heck you should never carry a balance to begin with. If you cannot afford to pay it (whatever you are using your credit card to pay that month) at the end of the month then you cannot afford it.

Here is an example of a credit card statement. You should see only $0 in Interest and Fees. This tells you that you are paying your balance in full every month and the end of the credit card cycle. Never, never send the minimum. If you cannot pay the credit card in full, then send the maximum you can. This is how they get you trapped and you become very profitable for them. If you pay the credit card in full, you are not profitable for them. And on the plus side, your credit score goes up.

Rewards gimmick

Sorry to say it to you but there is nothing free. The reward gimmick credit card companies use are nothing more than another way to get you to use their credit card and to get you to, hopefully, get comfortable and start to overspend and then carry a balance.

Guess who is paying the rewards? Yes, you. No it is not the companies, stores or merchants you are using your credit cards at. The restaurant or that retail store are charged by the credit card companies for using their network. For example, if I own a business and I let customers pay me with their Visa, Mastercard or any other card, then the credit card companies charge me, my business, 2-3% for the service. Well guess what I am going to do. I will pass that cost on to you the consumer. So you end up paying for it. I call it a credit card processing fee or service fee or whatever. The point here is that you end up paying it. Not the credit card company and not the business.

This is why some gasoline stations usually just have the price of gasoline displayed on their sign the price of cash payment. But when you use the credit card at the pump it is a higher price. Interestingly enough, most people don’t know that gasoline stations have two prices, one for cash and one for credit card. So if you pay in cash it is cheaper. But uninformed consumers, or those don’t come to read at The Economy Chief, often end up paying more.

So back to the rewards. That reward is your own money that you pay when you used the credit card for shopping or dining.

Isn’t this great for credit cards. They win either way.

Yes, they do offer some things that make it worth it to use them. They protect you if someone steals your credit card, fraud an all those things. Some cards even cover you for car insurance if you rent a car. American Express gives you extended insurance coverage if your purchase is stolen for 3 months (I think it is 3 months not sure).

Should I stop using credit cards?

Of course, not! The key here is to not make them rich. Use them but always, always pay the full balance at the end of the month or when the payment is due. NEVER send the minimum payment.

The next time you are at the mall or dining, ask yourself, can I afford this? Can I pay the full amount at the end of the month? If the answers is no, then you cannot afford it. Don’t buy it or you will give your money to the credit card companies.

Also, next time you hear the commercial and a famous actor or actress is asking you: What’s in your wallet? Say: MY MONEY.

God bless to all and sorry I have not posted any material. This is a hobby for me and I don’t get pay for this. I do it to help you all. But believe me, anytime I post something you better believe it is worth it.

Later!

The Chief

Hi followers! Or should we say, visitors to the economy chief since I don’t have a Facebook page. Wait I do. I just found it. Nothing there right now. I will start to post in 2025. Give it like so that I know you are reading my blog post. That is the only way I know you guys are visiting my blog page. I don’t have a newsletter or allowing visitors to comment on my posts. Too much spam and I don’t have time to read all the comments and filter the ones that are legit and the ones that are not. So please go to my Facebook page and give it a thumbs up or like as a token of appreciation that this simple blog page of mine is helping you become a better and smarter consumer, investor, saver, etc.

Here is my Facebook page: https://www.facebook.com/TheEconomcyChief

Ok now onto my post

Accounting, accounting. I remember taking accounting back in my days in college. Yes, it is boring to some. I found it to be somewhat interesting. In my opinion, it was certainly easier than those econ courses I took with all those graphs and equations. Yes, economics is boring too. But it is the system we have here in the good old USA and the rest of the world. So we better learn it and learn the rules of the game. Learn to play the game. Otherwise you are done for.

In fact, learning to play the game is so important that I am teaching my kids how to play and win at this game. Playing in a fun way. Last weekend, my wife and two kids spent playing Monopoly for about four hours. I was the first one to go broke. Can you believe it. The Chief was taken out so soon. My son implemented a strategy that quickly took me out. He took us all out. That kid is going to do great things for sure. I can tell already. I will come back to this site when he becomes a billionaire and I will show him this. Your dad may not have been a billionaire back in my day, but I was a millionaire and for me that is good.

Ok. I don’t want to bore you all with all my family moments. You all are here to learn and to learn how to become rich or at least get yourself on that path so you don’t go paycheck to paycheck.

Android or Apple App

First things first. You need to get yourself an app for your phone. I don’t care if it is from Apple or Android. The key here is to get an app. You don’t have to spend any money on any app. There are some great ones there that are free as a beer.

Make sure the app has double entry. What is double entry? Double entry is an old accounting principle that basically it means that whatever you do to one thing it will impact another thing. Here, think of a two beer mugs. Mug A and Mug B. If you take beer from Mug A and pour it to Mug B then one will have less than the other. But one thing is for sure. The beer is not disappearing (unless I take it from Mug A to my mouth, then it’s gone). Well back to the double entry. You can see that the beer is liquid and it moves from one container (mugs) to another container. That is double entry in a nutshell. Easy right. Well, it does get somewhat complicated when you are dealing with other things like equipment, loans, investors, owners and so on. But for personal finance, it is rather simple.

What I want you all to start thinking about is accounting, accounting when you are thinking about your assets (businesses, investments, houses). This is the equation. Don’t have time to put a graphic here, you all can read:

Assets = Liabilities + Equity

That is accounting equation. This always has to balance. Think of the = as the middle of the two mugs. If you move liquid you have to balance it by either getting a loan or use your credit card to buy more beer (liabilities) or you put more money (equity). Ok. I am getting a bity technical here but I want to keep it simple without putting you all to sleep.

Get an app that does not simple track expenses. Make sure it affects other accounts (asset or liability or equity). This will help you get a clear picture of how money flows.

Here is the app I have been using on my Android phone for 15 years. It is free and I have changed phones like 5 times and the first thing I do is install this app. It also has a Window and Linux version so that you can export the data from your phone to the Android. Don’t try to use so many systems. Keep it simple. I recommend just using the phone app.

I found this one in the Android App store.

If you find another app. Just make sure it has accounting double entry. You can go to Youtube and type double entry accounting and you will see what I am talking about.

Assets

These are accounts for items that have value. Some examples: Cash in your pocket, your checking account, your investment account, your car, your house, etc. Anything that has value goes here. Now bankers and accountants like to break this into two. Short-term assets and long-term assets.

Short-Term Assets

Anything you can convert into cash within 12 months (1 year).

Long-Term Assets

Anything you can convert into cash after 12 months (over a year)

Then you have Liabilities. You all probably have lots of these. Not good! Specially if you are living on credit cards. Credit cards are the worse invention for people. They turn you into a slave. Unless you own stocks of these evil companies then you are on the right side and making tons of money from fools who live off credit cards. Well you get it. That is liability. Credit cards are bad liability. Student loans and mortgage (home) loans are good. To some degree.

Equity. Equity is the money you invest in yourself or business. Don’t want to get too much into this because like I said. I want you all to start thinking about double entry and keeping track of what you own (assets), what you owe (liabilities). That is your net worth. What you are really worth after you deduct liabilities.

Assets – Liabilities = Net Worth

What I own – What I owe = My Net Worth

Simple example.

You have $10k in your bank account, you $200k in your IRA and a house that would sell for $500k. These are your assets.

Then you have $200k in mortgage and $5k in credit card debt.

Your net worth is:

$710,000 – $205,000 = $505,000

The goal is to get your net worth, the right side of the equation to go up and up.

Again, find an app that has double entry and learn basic accounting. If you don’t, it is like driving a car without learning the basics of turning, accelerating, stopping, etc. You are living in the economy without understanding the rules of this game. Those who are ignorant of the rules are at the bottom. Where are you?

That is all.

God bless and don’t forget to go to my Facebook and give it a like. I don’t have anything there now but will start to post things that helped me and may help you.

Next article will be about Tesla. Boy, I made some good money with that stock. I will tell you all what I did with it.

Later!

The Chief.

Is this worth it? Private school tuitions are quite high now. I see families paying $40k+ annually for children attending private schools. And we are not talking high school level, elementary school. Is this worth it? Are these families just burning money thinking that their children will get a better education? That is the question. I will give you my take on this since I have my kids in private school right now.

The answer is maybe.

If you live in an area where the public schools are not the best in the country, I would say yes, it is worth it. Some public schools, at least here in the USA, are not the best. You have an environment where the kids can easily get in trouble if they start to hang out with the wrong group. Think of when you went to school. There are some students who you can tell come from the rough area of town. Of course, it is not their fault. It is the fault of the system that has failed them. They system has failed the student and the parents too.

Ok. Let’s stop for a minute. You may be asking yourself, has the Chief gotten a bit softy now since it is Christmas and he wants to blame the “system” for people who are just lazy and do not want to go out and get a job. No, I am not going softy and sure people often are where they are mostly because of the poor decisions they have made in life. But let’s be realistic here. Sometimes the environment and the conditions placed by institutions hinder your ability to succeed in life. Let me give you an example.

You all know I am an economist. And back in the day, when I went to college, one of the classes I took in economics was barriers to entry. Barriers to entry in economies but it can also mean barriers to entry in a way that discriminates against certain people so that they cannot get ahead.

Here is an example.

Say you work at a construction company. Well we see a lot of new employees coming into the workforce and gradually they are starting to learn the job and after a few years, they start to want more. More responsibilities. More opportunities to learn new roles within the company and the industry.

Well management sees that these folks will soon take the jobs of another group of workers. Management wants to protect these workers. So what do they do. They implement a new policy (which was not in place before) that in order for you to apply to work in a certain role (i.e., managerial position) you must have a certain license or a High School equivalent degree or some silly certification that you know the new workforce will not be able to attain within a few years. There you go, you just legally discriminated against a group of employees.

All industries do this all the time, mostly in blue-collar jobs (construction, electrician, mechanics, etc.) This is a way to block certain people from getting ahead and earning more.

Now let’s go back to the environment and the barriers to entry for folks who live in areas that do not have good public schools. Here is where public policy has failed these groups. The politicians and representatives from these districts do not have the interests of the people at heart. They have the interest of the businessowners and those who benefit from the power. That is the barrier to entry.

But let’s go back to the private school worthiness question.

If you live in one of these poor districts where the public school education is poor, then maybe it is worth it to send your kids to private school. I would not send my kids to private school if I were to live in one of these districts. What I would do is instead of using that money to pay for private school, I would set a plan to save within 2 or 3 years so that I can move to a district where the schools are great. That way I get the best of both worlds. My kids go to public school in a good district and I enjoy the perks of living in an area where I am safe and I can meet people who are less likely to be on parole. My kids will also make friends with kids who are less likely to get in trouble.

I will go as far as to say that even if you live in a good neighborhood, I don’t think it is worth paying for private school. In 2025, I am transferring my kids to public school. We live in an area where the average home is worth almost $2M so you know the children going to public schools are not poor.

So my suggestion to you, reader is, and always will be, look out for yourself and do not rely on government or any other institution to help you. Start now to save, invest and repeat. This is the only way you can get out of your situation. Living paycheck to paycheck and spending all your money on worthless items will only get you nowhere.

That is all for now.

Merry Christmas to all! Happy New Year. God will bless you and your family today and tomorrow.

The Chief