Jacques Mattheij

Technology, Coding and Business

Banks

Banks are great tools, but you have to make sure, like with any tool, that you are in control.

It’s very easy to come to the conclusion that you are at the mercy of the bank and that you have to jump through all kinds of hoops in order to please them.

This is not true, even though it may feel like that at times.

Banks are there to serve you, and you are their customer. You call the shots. If you don’t like your bank change banks. Don’t go into debt, save and make sure that you expand at a rate that you can afford. If you have credit cards do not use them to bootstrap your company, first save up, then make your move, not the other way around. In the long run it is faster, cheaper and less risky. If you do use credit cards (and in the US it’s almost impossible to not use them) make sure the balance is paid up at the end of the month.

The only time when it is ok to use a bank for a freelancer is when you wish to get a mortgage for a house. But, if you are still employed it is probably smarter to do that right now than to wait until you are independent, banks do not like to give money to 1 person operations to borrow money to buy a house. They’ll take any minimum wage maker over a solid performing freelancer.

Banks are ‘risk averse’, to the point where they’ll shoot themselves in the foot if it means they can avoid making a judgement call. Also, if you follow the advice about credit cards and borrowing then you will have a lousy credit rating.

The best way to buy anything is with money that you earned and saved over time. It is also the cheapest.