In this episode of The Tactical Empire, Jeff Smith and Shawn Rider delve into the strategic use of credit cards for managing personal and business finances. They discuss the benefits of using credit cards, including fraud protection, organization, and leveraging 0% APR offers, while emphasizing responsible financial stewardship. Ryder shares his approach to balancing cash flows and credit card debt in personal life and businesses, highlighting the importance of maintaining liquidity for investments and expenses. Smith and Ryder also touch on inventive ways to fund property enhancements and discuss the tax advantages of using business credit cards. The episode ends with actionable insights for real estate investors on using financing options to improve rental properties.
In this episode of The Tactical Empire, host Jeff Smith and Shawn Rider discuss how to effectively use credit cards for both personal and business finance. They cover the benefits of leveraging credit cards, including fraud protection and credit card points, and provide insights into using 0% APR offers strategically. The discussion also delves into the pros and cons of accruing short-term credit card debt and the flexible financial strategies that can be employed for managing cash flow. The episode concludes with a unique hack for real estate investors regarding financing new windows through zero percent financing. Listen in for practical tips on staying in control of your money system and making credit cards work for you.
00:00 Introduction to Tactical Empire
00:30 Catching Up with Shawn Rider
01:19 Weather and Family Updates
02:52 Disney Springs Adventures
04:21 Diving into Credit Card Strategies
05:45 Using Credit Cards for Business
18:47 Real Estate Investment Hacks
22:06 Conclusion and Next Episode Preview
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[00:00:00] How do you find the will to fight back against a world that wants to keep you sedated, average, and stuck in place? Join us for the tools and strategies you need to create a life of abundance, discipline, and high achievement. This is the Tactical Empire with Jeff Smith.
Jeff Smith: Welcome to another episode of the Tactical Empire. I am joined by my man, Sean Ryder. How are you, sir? I'm
Shawn Rider: good, man. I mean, hectic, crazy, but uh You know, as we've been talking, uh, the wife left corporate America, but that was, that was two weeks ago, but we've had like snow storms, ice storms. So the kids barely have even touched school over the past two weeks.
So, uh, this week is looking very good. It's in the mid forties, maybe 50 degrees. So the kids will be in school five days a [00:01:00] week for the first time in a month and a half. And so I think this will be the first week where we try and actually hit a good rhythm with the new way things look. So, uh, I'm, I'm, I'm in good spirits early on this week.
How are you?
Jeff Smith: I love it. I love it, man. I'm doing great. I'm doing great. We had a little bit of a cold snap where I think everybody did last week, which kind of bummed me out a little bit. It was dark and gloomy and shitty. I don't know how I grew up in Illinois. And, uh, it's a real deal. Once you're used to being outside 365 days a year.
It's, it's a, it's a challenge when you get into other climates. Um, but this week's great, 72 and sunny. And so we're, we're doing great
Shawn Rider: for me. It's the opposite because like. Like the cold used to bother me. My feet would get really cold and they'd like never recover. Like my, my dad never turned on the heat in the house to save money.
So like my feet were [00:02:00] perpetually cold growing up. Um, but now like the good thing about cold plunging is that. I literally was walking around in a t shirt yesterday cause it was 37 degrees cause last week it was one degree. Last week it was one degree here for like three days in a row. And so it was cold.
So now that it's 37, I was walking around in a t shirt walking into target. I'm like, Like 37 degree air feels way better than feels way better than 45 degree water. So the 45 degree water, cause all my clients are coming into the business and they're like, it's freezing outside. I'm like, it feels fine.
Like I'm good with this. I can put up with this. Um, but man, I'm, yeah, you guys were in Florida. You guys had a bit of a cold snap. I had some people that I know that were down in Disney world and it was 30 degrees and rain. So, uh, not, not the best time of year to be in Florida, but. Ready to roll. Yep.
Jeff Smith: We were at Disney Springs yesterday.
Shawn Rider: Oh yeah. Yeah, yeah, yeah. We'll be It's weird because we'll be back at Disney in [00:03:00] two weeks and we fly down like when we fly into Disney Orlando, we try and get there like just after lunch on Sundays. So we can go to Disney Springs for dinner on, uh, the first night we're there. So did you guys eat anywhere in Disney Springs?
Kind of cool little spot.
Jeff Smith: I, we, everybody was starving. So we went to this Mexican place, La Cocina. I think it is. It was, it was real average. We didn't intend to, we didn't intend to eat there. That was not what we were going there for, but we will be here if you guys want to hook up. So,
Shawn Rider: Oh, really?
Jeff Smith: Yeah.
Shawn Rider: Like a couple of weeks.
Oh, yeah, let's do it. Our little thing now, I mean, it's, I mean, it's, it's whatever food, but we go to, uh, this big dinosaur restaurant in Dizzy Springs. It's kind of like become the thing. I mean, it's not like, it's not like the best food ever, but it's kind of a funny little atmosphere, but we can find somewhere.
We can. Yeah, yeah, yeah, yeah. I won't, I won't, I won't [00:04:00] say it. I will say it out loud. My wife stole two of their kid plates last time. So we have these dinosaur plates from the house. So, uh, leave it up to my wife. The first time I've ever seen her take anything from a restaurant, I was like, this is what you're taking.
You're taking kids, dinosaur plates. Goodness gracious.
Jeff Smith: Hilarious. Hilarious, man.
Shawn Rider: Well, we've been, we've been on a good little kick here of like hitting, hitting two episodes back to back on similar topics. So I think we're going to keep that train rolling. And something I was thinking about that came up in a few conversations in regards to personal finance recently was just the use of credit cards.
And it's been a while since we've talked about. Traditional personal finance. And we're not going to talk about the big scope, broad stroke, personal finance. We're going to talk about, uh, how some people just have like an ill feeling towards credit cards based on what they learn, but I just want people to hear from you and I on how we utilize credit cards.
Uh, [00:05:00] in our personal lives or business, right? It's not, it's not some high level strategy or, or rocket science. I just want to tell the people how, how you view credit cards, what you utilize them for. I'll tell them how I view credit cards, what I utilize them for. Then the next episode will go a bit A bigger step forward, we're going to leap forward and talk just about, uh, higher forms of debt strategy and how we utilize those in our life.
So, so I don't think we've ever had an episode specifically towards credit cards personally and business. I know they've come up, but, uh, Jeff Smith, how do you utilize personal credit cards or business credit cards? What are your main thoughts and go to's?
Jeff Smith: I use credit cards for everything. Um, we have, I mean, admittedly, I probably have 15 Amexes.
Um, so I, I have a lot of credit cards, but like ultimately [00:06:00] I think you use it for leverage on what you're doing. I teach everybody in the group to view each individual LLC or each individual property as its own like little business where you're trying to keep your P& L straight with each business to figure out the profitability of each of your assets.
Right. And, uh, for me, credit cards help. Make that crystal clear. Um, it's just an organizational thing on my side Um unless I also teach burring and flipping and airbnb Using zero zero percent credit cards as well. I think it's a brilliant way to crack into the game Especially in the Airbnb space, if you've got an 18 or 24 month, 0 percent credit card that you can throw the linens and the furnishings and shit like that on, you definitely should do it because where most people miss the mark when they start investing in assets is they use all their own capital.
[00:07:00] And, uh, and, and a 0 percent credit card is kind of like just using OPM or other people's money. And so like, if you can. If you can secure an Airbnb that's going to kick you 2, 500 net a month, and you've got to spend 10, 000 out the gate to furnish it or whatever, you should hold on to your capital reserves, no matter what, and put all that on a 0 percent let chase.
Take the risk, if you will, or Bank of America or one of these other places, take the risk with regards to furnishing your place, and then you should use whatever, the first four months of proceeds, net profit, to pay off that credit card, and then you're rolling after that. Um, you should not put your family at risk by using your own money.
And something goes wrong or a wry, you just, it's a level of protection for you and your family, um, that I don't think people realize, cause they view it as a risk or a liability, if you will, which it [00:08:00] is, there's no question. But like all those Amexes I'm telling you, I've got, they're in business, they're, they're in business names.
They don't show up on my personal credit. I've got, I've got cards I can use at any point in time for each of the businesses or the properties. Right. So, um, I, I've used them in all different ways. I think they're really good, a good tool to have periodically for sure. And you get points.
Shawn Rider: Yeah, exactly. I think, I think the, the, the low hanging fruit here is.
If, if you're a steward of money, there's no reason not to use them, right? Like, of course, a good rule of thumb in, for me, I view it, I separate personal and business strategy, even though you could mix and mingle, uh, the same strategies for both, but personal. I keep it super simple. I use it for everything.
I get the points. Um, I don't use any like high level like mileage. I don't fly that much. So I'm not worried about like the best one for flying or whatever. [00:09:00] We have a Costco credit card that gets, uh, up to like 3 percent on certain purchases and they send a nice check, uh, in the mail. And then our Wells Fargo one, I usually just build that one up and then, and then take a, a statement credit.
So it saves us some money every, every so often. But personal, we, we pay for as much as we can on a credit card and we pay it off every single month. I've never accrued credit card debt in personal credit cards. So that's like a hard stop rule of thumb. What I do, if I ever wanted to, I would change that strategy and use what I use for businesses.
And so with businesses, it's the same thing that you just said. Um, I use it. For every purchase that allows me to use a credit card. Uh, if I could pay rent and pay my payroll on credit cards, I would, I haven't figured out a way to do that through the services that I use. I do know other men or at least one man in the tactical empires inner circle who has, uh, learned how to use a credit card for payroll.
So that's like. Immediately, like 100, 000 points a month for him. [00:10:00] Um, I haven't fallen down that rabbit hole. I'm not that obsessed with it, but for businesses I pay for everything. Um, but whereas in my personal life, I pay it off every month with the business. It just depends on what else is going on. So in an ideal world, I do pay that off.
There's other times where, let's say I am when I stood up an Airbnb a year and a half ago, uh, we opened up a brand new Amex and put like 15, 20 grand worth of furnishings on it. It was 18 months, 0 percent APR. Then we use the cash flows over the first year to pay that off, right? I didn't have to pay it off.
Uh, that quickly, I could have just hoarded cash and waited, but I felt good paying that off. So we did it. We didn't need the money in that instance for anything else. Um, but there's other times where I, I have a life insurance premium due and I'm short on cash. So about 60 to 90 days out, I'll delay the credit card payments on some of, or all of my businesses.[00:11:00]
I'll accrue hoard the cash. Take a distribution fund, the life insurance premium. And now because I'm four or five years into deep, deep into some of these policies, if I put 10, 000 into a policy. Basically overnight, they add my dividends and earnings into that policy annually as well. I get more than 10, 000 back.
So it's an instant ROI on that money. So I don't mind accruing short term credit card debt to have the 10 grand to put into a policy to have. 11, 000 show up. And if I need to, I can either pull a policy loan immediately, take a five and a half percent interest rate, pay off the 19, 22 percent credit card, and then pay down the life insurance loan instead of a high interest credit card.
Um, I don't say I always do it that way. Sometimes the businesses are cash flowing well, so I'll just hoard the cash. Fund the policy. Then I'll take an additional three months to pay off the credit card. So you can see, I have a ton of flexibility when it comes to the business. I'm not that concerned about business [00:12:00] credit card debt, uh, full transparency over the past 12 months up until probably three weeks ago, uh, over the past 12 months, I accrued a lot.
Of business credit card debt. Like, we made so many changes in our personal life. I was moving money everywhere. We were getting into the long term rental game. I was having big life insurance premiums, all this stuff. And I just let, I just let the expenses accrue. And like, some people will totally throw up in their mouth when they hear this.
But like, when you do the math, Like, you know credit cards are, let's just say 20%. Like, even if you accrue a 20, 000 credit card bill, Like 20 percent is four grand annual percentage rate. Like, that's four grand over a year. So on a month to month basis, the interest, like, it's really not that much dollar amount wise when you look at the big picture of what we have going on.
So I actually don't mind paying the interest and I did [00:13:00] let it go for about a year. And then, uh, we did the cash out refis on the LTRs and we didn't have another property lined up. So that money came back into our system. I paid back life insurance loans. I paid down a HELOC and then I paid off literally four business credit cards.
So for the first time in a year, like three weeks ago, I had 0 on all four business, uh, LLC credit cards. It made me feel good for a minute, but guess what? I'm a crew on credit card. Dedicate. It's all good. No, I haven't done it all. I've paid. Some time regularly. I've accrued short term debt. I've held him for a year.
I've hoarded cash, funded life insurance, pulled a loan, paid off the credit cards. Like I've kind of done it. I've done it all, but I am a big fan of people using 0 percent APR credit cards and, and take it to the max 12, 18, 24 months, whatever they'll give you.
Jeff Smith: Yep. Yep. I agree. A hundred percent. And there's, there's tax deductibility to it too, when it goes through your business cards.
And like [00:14:00] people, people miss that one oftentimes if you're, my opinion is if you're in business, you should definitely be running everything through credit cards. If you can. I mean, I, I have buddies that have millions of AMX points and, and millions. And like it, cause, cause you're running these businesses and your, your expenses are fucking hundreds of thousands of dollars a year.
Six figures. I mean, I spend six figures on a real estate business. We'll spend six figures on the tactical empire in the near future. I'm sure. And so like that, you absolutely should be running these through credit cards. First of all, there's fraud protection that you don't have when you use your bank accounts.
And so like, I mean, there's, there's just a lot of benefits to it. There's tax benefits, fraud, fraud, protection benefits. And also you get the points or whatever, right? And so I I don't run payroll through it because that's pretty cool. I've never heard of [00:15:00] anybody doing that but I think Actually, I have there's there's services you can do that will transfer it into credit card money for like three percent or something So that's interesting.
Um, but for me, I think it's a no brainer. It goes back to what you talked about though, like You have to be a good financial steward of money to be able to juggle all that stuff though Or it can get overwhelming admittedly So you you definitely want to take it slow You definitely want to make sure you pay attention to your zero percent stuff not miss payments I I have a story of of like I notoriously bought a zero percent.
Um television one time Um, I on a on like a best buy card and I missed the first fucking payment I was late on the very first payment of like no APR for 0 percent APR for like 18 months. I thought I was in the fucking cat bird seat. I was like, this thing's only gonna be 30 bucks a month or something.
And, uh, and I [00:16:00] missed the very first one and boom, got hit with like 28 percent interest or something after that. And, uh, I was like, son of a bitch. So I had to pay the whole thing off. I had devised this plan that I thought I was super slick and my wife was like, whatever, dude. And, uh, yeah, missed the first payment, had to pay the whole thing off in 30 days anyway.
And so it was just a bunch of wasted time. And then I had to cancel a fucking credit card.
Shawn Rider: We all make our mistakes, but you know, I think the potential upside, um, and when I say outside, I don't mean upside, just. For the benefits of the credit card. I, I 100 percent will always make sure that my family's taken care of.
And I will pay myself first. There's a certain standard of living that we want. There's a certain amount that I will make sure flows to my family. And if that means a credit card company gets there, gets to charge me, you know, it's just kind of like the interest is the cost of money. So for me, like I'm going to pay myself if I have to pay [00:17:00] another credit card company that.
Allowed me to accrue a balance of eight grand, 10 grand, 20 grand, or add another zero or two, like you've been mentioning, like. It's just, I'm going to take that hit in the short term. This is not the long term strategy to let, you know, a hundred grand sit on a credit card. Uh, but if I think there's a time and place for everything.
So, uh, maybe a year from now we will record another podcast episode where I'm like, yeah, Jeff, I've been sitting on a hundred thousand dollar credit card for a while. And this is actually how it's turned out really well for me. But, um, you know, I just wanted to open people's brains up, uh, that it doesn't have to be a.
Absolutely. No, never use them or an absolutely. Yes. Use them, but always pay them off. There is a time and a place to be fluid with your finances. And this does come back to what we believe in, which is staying in control of your money system and making sure that you're putting money to work first, because yes, the interest rate on a, on a credit [00:18:00] card may be high.
But if you pay for cash for something, you're financing it because you're foregoing the right to earn interest. Okay, if you take your cash and you buy, let's say an asset that's going to return 15 percent and you accrue a credit card in the short term at 20 percent like, oh, well, the 20 percent is higher than 15.
Yeah, but the credit card will be paid off. Like someday somehow, so that will be zero at some point, but the asset you bought is in perpetuity or forever for however long you want to hold it and it comes with its own benefits. So when you zoom out and look at the big picture and all the positives to using credit cards and leveraging short term credit card debt, I think the pros definitely outweigh the cons.
In the short term for sure.
Jeff Smith: There's another hack that I wanted to mention for you real estate investors that my sister introduced me to Um, because it kind of blew me away. So i'll mention it on this episode because it was a little it was good. Um, the So [00:19:00] I I just burred a house last month and uh, She went and walked it when she was down for christmas.
And uh, so she told me my windows were shitty And I was like, okay, big deal. Fuck him. I got shitty windows. I don't care. And, uh, and she said that you can go to the big, like, nationwide chains, franchise chains. Windows and more or some shit. I don't know what the name of it was that she said, but there are windows franchises all over the country, but they'll do 0 percent same as cash and you can buy all new windows, put them in and then if you can underwrite your deal.
Then your tenant pays for them and you may have 20, 24 months of same as cash. And maybe it's 150 bucks a month or something for those windows. And then if you do it that way, you just take a little bit of a hit on your net profit monthly, but now you've got brand new windows. And if I would have [00:20:00] done that before.
We had the house appraised. I probably could have recouped all the money on the appraisal on the increased value with brand new windows. And I didn't know about it until she told me about it, because it never occurred to me. I don't use Samus Cash very often, but she is like a hacker with that type of stuff.
And so, I thought that was a cool tip for real estate investors, especially if you're borrowing properties. Because if 0 percent and you're, you're still, if you still got a delta of like 5 or 600 bucks, Like 150 bucks for the first two years is nothing to have brand new windows and better efficiency in the house.
Shawn Rider: Yeah. That's where my brain went. When you started talking about it, I was like, well, shit, like you're, you're not coming out of pocket, your, your deals underwritten to factor that in, you're still making cash. And if you did it before the appraisal, you're actually making money on doing that strategy. It's not just, Oh, the tenant's paying for it.
It's like, no, the tenant's paying for it. And I'm making money because the appraisal is going to come in higher. That's, [00:21:00] that's really cool. You should have, you've never had your sister on the podcast, have you?
Jeff Smith: No, I'm going to interview her though, because she, she owns five mobile home parks. And so I'm going to, I'm going to have her on and we're going to, we're going to chop it up over mobile home parks.
That's already scheduled. Um, but the other thing she did actually say that she's been doing the window thing for a while. Now she rents in Illinois. She has rentals in Illinois, so it's fucking cold. But, um, she said, if you, if you, you should advertise that if you're putting new windows in, because a tenant that has shitty windows.
Knows what it's like to have shitty windows and they're interested because I was like I don't even know what I would do with that But I guess in houston it would be the same way Because they got sky high power bills because they're cranking the air conditioning all the time But if it's all leaking out, they've got big power bills And so like it would be attractive no matter where you're at Really just a little hack there since we're talking personal finance stuff You do have to put that in your personal name so it shows up on your [00:22:00] your personal credit It's not a business thing but still It is what it is.
Shawn Rider: Well, there you go, ladies and gentlemen, you got a little bit of a credit card insight and for you real estate investors, uh, you all can go grab some new windows on your next properties. Jeff, I appreciate your time. Next episode, we're going to go a little bit bigger with different types of debt that we utilize for our projects.
Jeff, send the people out.
Jeff Smith: Yep, guys, like and subscribe, uh, to our Facebook page and our YouTube channel, The Tactical Empire. And, uh, send this to anybody that might need this information. We appreciate you guys listening. We appreciate all your help and have a kick ass week. We'll see you soon.