Pay Pal and Cash Flow

Many personal finance bloggers have a way to collect money. Many use Pay Pal or a merchant account to facilitate collecting money. So, let’s look a little closer as to how you may increase your cash flow.

Let’s say you are contacted by an advertiser on your blog. You reach an agreement with the advertiser and they send the money to you via Pay Pal. You wait a day or two and the money should be available from your bank account-all’s well.

Let’s look at another alternative. Say you have a relationship with your bank and they have merchant services available. If you indicate that you would like to open up a merchant account with them-you may have some new found leverage. Particularly, on how fast the money is available in your bank account. If you have a good record with them your funds can be available later that evening or the beginning of the next day. Depending on how many transaction you do (Crystal, the advertising Queen) this could add up to a lot of free cash flow. Let’s take this one step further. Let’s suppose that from your merchant account, you instruct the funds to go to your brokerage account-why would you do that?

One reason may be because you like to invest your cash in short term investments or maybe dividend paying stocks that don’t have a lot of price volatility and can easily be sold. Since brokerage accounts will allow you to have checking privileges and debit cards; you’re not really giving up anything. This strategy may also encourage you to do a better job of managing cash.

How do you manage your cash flow-does it sit at Pay Pal, in your banks checking account or do you use a brokerage account?


2 Responses to “Pay Pal and Cash Flow”

  1. At Hawgleg Publishing, we tend to move the money to our company checking account when it passes $1,000. We do a lot of shipping of the products that we sell, so we prefer not to let it get below $200 (and double that if we have a lot of international orders in the queue, because those cost about $50 each to ship).

    Since this is not personal income, investments are probably not the best choice for our small business.

  2. Steve says:

    Hey Mike,
    thanks for coming by and sharing! Sounds like you do a great job of managing your cash flow and keeping a cushion-have a great 2012!

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