With interest rates rising, my BYOB strategy becomes more risky and less "magical" - at least at first glance.

However, it is still doable and has many useful benefits, in spite of the tougher price to pay.

If you are using my plan here are a few ideas to make your journey less perilous:

Pay the margin: At this stage I would start to pay down the margin as best you can. Some would choose to split the monthly contributions 50/50 - half going towards new investments and half towards the margin amount owing. In any case you want to ensure that you are still keeping your debt ratios at a reasonable level.
Reduce your living expenses as much as possible: If you are borrowing less to live on, you will incur less margin debt and pay less interest.
Use a buffering system like a credit card: This earns you points and allows you to smooth out the payment schedules
Sell some stock: Sell as much as you need to to get your ratio back in line, Simple.

Remember, my plan is just a framework. How you personally implement it is very much your decision. The whole idea of "Being your own Bank" is to put YOU in control. You are the one who decides how much risk you wish to incur. You are one who decides when and how to invest, spend and borrow your own money. I am determined to give you as much information as I can about how the system works and all of the options. It is a buffet of strategies that you pick and choose from.

The good news

Personally, I am focused on paying down debt right now. Fortunately, I have my monthly dividends to help me! I will be able to get to a comfortable debt level in a condensed period of time thanks to my investment income.

The driving force behind my BYOB strategy has always been freedom. Freedom to choose. Freedom to switch directions. Freedom to adjust as I see fit. I refuse to be "locked-in" or have to go ask someone for my own money. It is all in my control and that feels awesome. In the current interest-rate environment I have the flexibility and instant control to correct my strategy in many ways. I love being in the drivers seat. Remember, the only thing you can count on is change.

A couple of good points:

With interest rates as high as they are, a good old fashioned savings account isn't the worst idea. If you can be earning 5-6% on your money, with no downside of capital losses, go for it. It is a great wealth preservation strategy.

2. Interest is taxed more heavily than dividends. Make sure you understand that 5% returns are not equal. A 5% dividend will leave you with more money than a 5% interest payment. Just saying'...

With the above being said - the real important thing to remember is that the better you understand the strategies and how money works the better off you will be in the face of changing market conditions. You are not a victim. You are nimble and fast. You can change up your strategy using the BYOB framework at a moments notice. I am suggesting that understanding the system is what gives you the freedom and power. The information is key. You then become unstoppable because you are no longer at the mercy of external conditions. You are like a sailor using the wind to travel in whatever direction you want. You just need to adjust the sails and correct your heading. You will still arrive at your destination, in spite of the storms and changing winds.

So if you have read my books or studied my course, take heed. You are equipped with all the tools you need to stay the course. If you are not familiar with my work, I am suggesting that you may find comfort in the knowledge I have to share. It has the power to make you feel like you can win, no matter the adversity. It will show you how to set yourself up for success. I advocate "being your own bank" in a broad sense. That means being your own financial planner, being your own stock broker, being your own accountant and being your own money manager. If you are more comfortable having someone "do it for you" then there a lots of people willing to help you do that. My methods may not be for you and I wish you joy and happiness and we can still be friends.

Money is a very emotional subject for most people and I get it. It is scary. My solution to that is financial education. Understanding money and having a certain amount of control over your situation removes a lot of that fear. Do yourself a favour and learn everything you can about money and investing. You will empower yourself to navigate the stormy waters will confidence.

" Smooth seas do not make a great sailor"

If you are interested in learning more, poke around my website. I have a hundred free articles discussing financial strategies and money mindset. I have links to resources of all kinds, including other peoples products that I believe in. I want to help you find what you are looking for, even if it means referring you to someone else.

Thanks

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