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Messages - glossolalia

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Clearly sign up bonuses are where you'll receive the most ROI for your credit card spend, but what happens when you've taken advantage of all the sign up bonuses that are out there? Does this point simply never come because there are endless offers and you just find new ones to take advantage of every year? Or do you cancel these cards and rinse and repeat? In short, how do you keep the game going?

On average, more or less. See this post (tldr: average 2.3c on latest trip):

But, points have less flexibility than cash. So if you are only earning 1 pt / $1 and only getting 2.3cents/point, then 2.5% cash back is better and easier. (Most of our spending is on travel & dining out, earning 3pts/$1, so we actually got more like 7%+ back.)

When looking at just 2.5% cash back versus the alternatives, best would be put all spending on new cards for signup bonuses.

Spending $45k on the Alliant card is worth about $1100 ($1,125 - $59 annual fee.) Not bad, but not much travel either.
A 50k signup bonus on the Sapphire Preferred by itself is potentially worth $1150 (assuming 2.3c/pt)

After minimum spend on that card you still have $41k budget for the year. Maybe you apply for another card or 2 with $6k total min spend, earning another $500 - $1000 in signup bonus value.

Total remaining budget: $35k. That can be targeted towards high value category cards (e.g. 3pts/$1 on travel, 5 pts on groceries / gasoline, etc...) Maybe this is $10k total.

Now you have $25k budget remaining for the year. That can go on a cash back card, but:
$25k on Alliant = $625 - $59 fee = $566
$25k on Citi Double Cash = $600 (better)(no annual fee)
$25k on Freedom Unlimited = 1.5 pts / $1 = 37,500 points. Cash value is $375. Booking travel with Sapphire Reserve value is $563. Or if you transfer and get 2.3 - 2.5c/pt, then $863 - $938.

Subtract fees in year 2 for Preferred or Reserve (if applicable, minus $89 - $150.)

So it depends. Straight cash back is simpler / easier, but not the highest ROI. We definitely do better with the points.

You always get to the core of an issue, that's why I love your blog. Thank you for this awesome response!

UR points are worth 1.25cents or 1.5cents when used for direct purchase through Chase. You can just look at any price info for an estimate (Expedia or whatever.)

This is only worth more if you get more than ~2pts/1$ of spend

The UR points become more valuable when you transfer them. For example, if using them to book biz class airline tickets through United. The best I?ve ever done is about 20cents/pt

For economy class flights and 4 or 5 star hotels, would you say using Chase UR nets you more than 2.5c per point, on average?

For someone whose bulk of purchases is in the "Other/Miscellaneous" category, would using the Chase "Sapphire Reserve/Sapphire Preferred/Freedom" combo still bring more travel value than using the Alliant Visa Signature card, which gives 2.5% back on everything? (Assume I was going to use 100% of rewards on travel in both cases.) Yearly spend is about $45k.

Is there a place I can see prices for flights and hotels using Chase UR points?

Thanks for your insight!

General Discussion / Why VTI?
« on: April 18, 2018, 02:38:49 PM »

Great blog! Quick question. Why do you prefer to invest in VTI as opposed to similar options like VTSAX or an S&P like VOO?

Would love to hear your insight!


Thank you!

Simple question: If I sell my US-based business in May while living abroad the entire year, can I use the FEIE to deduct the first ~$100,000 of my business sale profit?

Taxes / 401k Contribution Limits for Self Employed Couple?
« on: April 13, 2018, 09:42:47 AM »
Love the blog! Quick question:

Me and my wife are both self employed. We are both sole proprietors (different businesses) and we file our taxes jointly. I'd like to start contributing as much of our earnings as possible to a self employed 401k. One day when we sell our businesses and have zero income, I'd like to start converting those 401k funds into a Roth IRA (or Roth 401k) and avoid taxation.

My questions are:

1) In our situation, how much can we both contribute in 2018?
2) Do we need to each have our own individual 401k or should it be combined into one?
3) When the time comes, is there any benefit to converting to a Roth IRA vs a Roth 401k?

Apologies in advance for such basic questions. Just learning how all this works!

Thanks again for a fantastic blog!


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