{"id":5183,"date":"2022-08-26T04:00:00","date_gmt":"2022-08-26T10:00:00","guid":{"rendered":"https:\/\/milesearnandburn.com\/?p=5183"},"modified":"2023-04-18T11:27:22","modified_gmt":"2023-04-18T17:27:22","slug":"weekend-wisdom-avoid-looking-like-a-kiter","status":"publish","type":"post","link":"https:\/\/milesearnandburn.com\/index.php\/2022\/08\/26\/weekend-wisdom-avoid-looking-like-a-kiter\/","title":{"rendered":"Weekend Wisdom: Avoid Looking Like a Kiter"},"content":{"rendered":"<h4>Introduction<\/h4>\n<p>When you start manufactured spending, the biggest limiting factor for scale is usually your lack of knowledge and experience in the field. Once you learn a few techniques and find the right plays, the limiting factor will probably turn into your float; that is, outstanding available cash and credit line balances. <\/p>\n<p>You know you\u2019ve hit float as a limiting factor when you immediately want to use a deposit that shows as \u201cavailable\u201d in your bank account on Tuesday morning to pay down a balance on your credit card, so that you can go spend and repeat the cycle on Tuesday afternoon. <em>Listen Trigger<\/em>, I know that in the modern world of Zelle, ACHs, and other electronic money transfers, it sure looks like money is available to pay a credit card the moment the bank tells you it is. The problem though, is that the bank is lying to you.<\/p>\n<h4>Cleared Funds<\/h4>\n<p>Even though a bank shows your balance as available and lets you send it away with a few clicks, it\u2019s really not fully available because banks are still living in a technology world that\u2019s a decade behind our own at best. Your electronic or money order deposits aren\u2019t actually <a class=\"ek-link\" href=\"https:\/\/www.investopedia.com\/terms\/c\/cleared-funds.asp#:~:text=Cleared%20funds%20are%20money%20that,the%20receiver%20of%20the%20funds.\">cleared funds<\/a> (definitively in the accounts of the receiving bank) when most banks make them available to you. When are they actually cleared funds?<\/p>\n<ul>\n<li>ACH, Zelle, and other electronic deposits: Three business days<\/li>\n<li>Wires: Up to one business day<\/li>\n<li>Cashiers checks and money orders: One business day<\/li>\n<\/ul>\n<p>There\u2019s an additional rub: there are different cut-off times depending on the bank, how large its assets are, and the type of transaction, but typically it\u2019s safe to assume that if you make a deposit or receive an electronic transfer after 2PM Eastern, you\u2019ve missed the bank\u2019s business day and a deposit after that time is effectively no different than a deposit the next morning.<\/p>\n<h4>Kiting and Shutdowns<\/h4>\n<p><a class=\"ek-link\" href=\"https:\/\/www.investopedia.com\/terms\/k\/kited.asp\">Kiting<\/a> is floating money in-and-out before it clears, intentionally knowing that ultimately it won\u2019t clear and running away with the funds before the bank knows what\u2019s happened. Kiting is illegal and if all that happens from actual kiting is a bank shutdown, you\u2019re really lucky. But a manufactured spender paying their credit line the moment deposits are available isn\u2019t kiting because the funds will clear, so what\u2019s the problem?<\/p>\n<p>Easy, when it looks like you\u2019re potentially kiting, a bank\u2019s risk department will take a look at your accounts and almost certainly shut you down. It doesn\u2019t matter if you weren\u2019t actually kiting and your deposits all eventually clear, the bank still sees major movement before money is cleared as a big risk, and when you\u2019ve scaled your manufactured spend that risk eventually becomes untenable and you\u2019ll get the axe, \u201c<a class=\"ek-link\" href=\"https:\/\/leadershipfreak.blog\/2020\/03\/25\/eliminate-out-of-an-abundance-of-caution\/\">out of an abundance of caution<\/a>\u201c.<\/p>\n<p>How does one stay alive? Be aware of the timelines for cleared funds, and don\u2019t move money out of your bank account before funds are cleared, even if the bank shows your balance as available and lets you move money out the same day. Stay alive friends!<\/p>\n<div class=\"wp-block-image is-style-editorskit-rounded\">\n<figure class=\"aligncenter size-full is-resized\"><img decoding=\"async\" alt=\"\" class=\"wp-image-5188\" sizes=\"(max-width: 600px) 100vw, 600px\" src=\"https:\/\/milesearnandburn.com\/wp-content\/uploads\/2022\/08\/kiting.jpeg\" srcset=\"https:\/\/milesearnandburn.com\/wp-content\/uploads\/2022\/08\/kiting.jpeg 600w, https:\/\/milesearnandburn.com\/wp-content\/uploads\/2022\/08\/kiting-300x165.jpeg 300w\" width=\"420\"\/><\/figure>\n<\/div>\n<p class=\"has-text-align-center\" style=\"font-size:14px\">Another consequence of kiting.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Introduction When you start manufactured spending, the biggest limiting factor for scale is usually your lack of knowledge and experience in the field. Once you<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_editorskit_title_hidden":false,"_editorskit_reading_time":2,"_editorskit_is_block_options_detached":false,"_editorskit_block_options_position":"{}","footnotes":""},"categories":[56],"tags":[],"class_list":["post-5183","post","type-post","status-publish","format-standard","hentry","category-wisdom"],"_links":{"self":[{"href":"https:\/\/milesearnandburn.com\/index.php\/wp-json\/wp\/v2\/posts\/5183","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/milesearnandburn.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/milesearnandburn.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/milesearnandburn.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/milesearnandburn.com\/index.php\/wp-json\/wp\/v2\/comments?post=5183"}],"version-history":[{"count":8,"href":"https:\/\/milesearnandburn.com\/index.php\/wp-json\/wp\/v2\/posts\/5183\/revisions"}],"predecessor-version":[{"id":6959,"href":"https:\/\/milesearnandburn.com\/index.php\/wp-json\/wp\/v2\/posts\/5183\/revisions\/6959"}],"wp:attachment":[{"href":"https:\/\/milesearnandburn.com\/index.php\/wp-json\/wp\/v2\/media?parent=5183"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/milesearnandburn.com\/index.php\/wp-json\/wp\/v2\/categories?post=5183"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/milesearnandburn.com\/index.php\/wp-json\/wp\/v2\/tags?post=5183"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}