All posts tagged Saving time

How I earn over 4% back on all credit card spending.

By Brad Beckstrom

You read that correctly, over 4% return on credit card spending. This includes rewards points on business and personal spending. Quick disclaimer: if you carry debt on credit cards, or don’t pay your bill off (in full) each month, any gains you have from points will be likely negated by interest charges. Once you have zero credit card debt and are ready to use cards to earn rewards points/cash back, then you’re ready to put together your rewards points plan. Here’s mine.

To keep this simple, I’m going to use Chase credit cards as examples. They have one of the best rewards programs out there that meet both my business and personal credit card needs. This program can be put together with other cards, but my best experience so far has been using a combination of Chase cards to get the 50% point bonuses and benefits, I’ll describe here.

Like many cool things, I stumbled upon the Chase Ultimate Rewards program while reading about travel hacking on personal finance sites. I was consistently seeing the Chase Sapphire cards and their Ultimate Rewards Program listed at the top of most lists for high reward, high credit rating cards.

My Ultimate Rewards set up

My setup with Chase utilizes one personal card and two business cards. The personal card is the Chase Sapphire Reserve that came with a monster 100K point sign up bonus. Normally I would not pay annual fees over $95 for a reward credit card, however, this high fee card applies $300 of the of the $450 annual fee to the first $300 in travel expenses each year. It also includes 3X bonus points on all travel and dining with another 50% point boost when you book travel through Chase. It includes an additional $100 credit for TSA Pre / Global Entry programs, travel insurance, sky clubs, and other perks. So after doing the math, this is a great value. See points bonus calculation red boxes. 

To get the 50% point bonus, I look up flights on Kayak then punch that information into the Chase rewards travel search to make sure I get the same pricing. I generally get better prices on hotels from other sites, but I’ve had great luck with Chase on airfare, so I primarily stick with that. Points can be used any time on any flight, no blackouts, unlike airlines. You can also use points to reduce trip cost, if you don’t have enough for a full ticket. As an added incentive, my Sapphire Reserve card came with a 100,000 point bonus that is effectively worth 150,000 points when you book through Chase. The points can also be transferred 1:1 to airline and hotel partners. The point transfer feature was useful when I needed to add some British Airways Avios points to get to a reward ticket. Chase card sign-up bonuses range from 50,000 to 100,000 points, so every few years if a better card comes along, I simply apply for a new card to replace the old one. Their top-tier cards all have no international transaction fees, airport club access, and trip/purchase protection.

I have two Chase cards that I use for business. The first is Chase Ink Business Preferred. This card comes with great 3X bonuses on travel, cable, telephone and media purchases that include Ad spending on Google and Facebook.  If you spend money on Google Adwords, the 3X bonus really comes in handy effectively reducing your media costs by 3%. That can really add up. This card gives you a 50,000 to 80,000 point sign-up bonus (bonuses vary throughout the year).  For everything else business-related, I use a no annual fee card, Chase Freedom Unlimited, that gives me 1.5% cash back all purchases. This card is great because I can add bonus points with all types of transactions like health care, vendor payments, PayPal, Amazon etc. These really add up, so it’s nice to be making a 50% point bonus on all purchases. In order to really kick this system into high gear, make sure you use vendors that offer automated online bill payment. Points on my health care payments alone add up to nearly $700 per year.

How does this all add up to 4% return?

The secret to this lies in the ultimate rewards program website.  With the three cards linked to my chase.com account I’m earning anywhere from 1.5 X to 3X on all business purchases.  My average shakes out to about 2.6 points per dollar spent. (not including sign up bonuses) Once those points appear in my Chase ultimate rewards account I can then instantly move them to the card with the highest redemption award bonus (Chase Sapphire Reserve). Once the points are in the account, I can use them like cash to pay for airline tickets, hotels. I look for the best rates on Kayak then book the tickets with Chase to get the additional 50% points bonus.

So the current points balance below is worth $6361 in cash towards awards travel. That goes a long way when the average cost of my international plane tickets is about $550, and hotels and AirBnb rentals in places like Lisbon, Mexico City, and Athens, can be had for $60 a night.

Here is the math

2.6 (points average) x 1.5 (bonus rewards multiplier) = 3.9%  The IRS does not tax rewards points earnings, giving me a tax free equivalent return of about 4.8%!  That’s before I add in the 50,000 to 100,000 bonus points per year, which pushes the return well over 6%. One additional travel hack: When I buy tickets, I’m also getting airline points, upping the return by another percent or more. I save all my airline programs in one password so I can easily search and add hotel or airline point programsFor info on some of these cards check out this travel credit card rating tool from the Mad Fientist.  Just click on Chase to see all the cards mentioned here. 

This all sounds a bit complicated, but really it’s not. Once you have the credit cards linked to Ultimate Rewards and use an online accounting system like Freshbooks or LessAccounting to automatically import and categorize all transactions. It’s really just a new way to bank. Instead of writing checks and taking out expensive lines of credit, the banks now work for you.

 

The Frug

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Stop filling your mind with random stuff. It’s time to go on a high-quality, low information diet.

knowledge Tree

By Brad Beckstrom

I thought I had this all figured out. A few years ago, I decided to get on a high quality low information diet. I would avoid traditional news sites and only follow a small group of highly trusted writers, using a RSS feed reader. I would update and pare back this list regularly and categorize the writers I followed by interest. The feed reader I use is called Feedly and allows me to group my favorite writers into categories like business, family, personal development, photography, comedy, sports etc. The feed reader is very effective at stripping out distractions, especially all of that click bait, and fake news, you see at the bottom of many websites, even on many major news and network websites. My plan worked well. Each evening my feed reader presented me with a personally curated news stream from a group of writers I trust with very little distraction. No clickbait, no banner ads, no fake news.

Then two things happened. Apple launched an app called “News” that I started playing with after a recent iPhone upgrade. Then the election cycle began. This news app is comes set up like a feed reader for the big news sites. I found myself following multiple networks, major newspapers. Any spare moment I had, standing in line, having some lunch, I started filling up with this news app. Then I felt I needed to share things on Facebook or Twitter which led me to click on more stories shared by friends. There was so much garbage out there about both candidates, I’d quickly spiraled into a news consumption addiction. I’d gone from high quality, low information to just information and way too much of it. Not only did my other feed reader start to fill up with unread articles, I also found myself thinking less about what I wanted to create.  I was too busy absorbing all of the news to think about much else. As a dieter might say, I fell off the wagon.

It’s Over

The election is now over, so it should be easy for me to walk away from all those network news sites, walk away from all of the name-calling and breaking stories and move on. Unfortunately it will be hard, and I think many people won’t walk away at all. They will want to be up-to-date on the latest political shit show playing out in Washington DC. Others will want to follow all of this news as they feel some responsibility, sense of urgency, to know what is going on as it may impact their jobs, family, their daily life. What’s the harm anyway?  You’re just filling up some dead time by looking at your phone.

I believe there is harm. You have to look at what you’re missing by spending so much time keeping up with so-called “news”. You’re filling your brain with a lot of fleeting stuff ( I could insert 100 examples here from Twitter alone) that you have absolutely no control over, and has very little impact on what’s important to your daily life.

newsman

Change the way you consume information

For me this doesn’t mean shutting out traditional news entirely. It means immediately changing the way I’ve been consuming news and going back to what works. So, what do I mean by a high quality low information diet?  Everyone’s different so what may be high quality to me may be garbage to someone else. The good news here is that we can use the same technology that’s been bombarding us with click bait, fake news, sensationalism to filter those exact things. Here are six high-tech ways I’m doing that and two very low-tech ways.

  1. Use a good quality RSS feed reader. Basically, the way a feed reader works allows you to follow trusted blogs, specific topics, and writers that are credible. Instead of typing “CNN” or clicking on FoxNews in your browser, you can take a few minutes to follow feeds from sources that you know are legit and won’t fill up your screen with clickbait and banners next to every article. I use Feedly. My feed updates on my phone in a browser or on iPad. All of them stay in sync and I don’t miss a thing from my favorite writers like Seth Godin or James Altucher.
  2. If you’re more visual, and like a magazine style presentation on your tablet, I recommend flipboard.  You can follow the same feeds as on other apps. It syncs across devices and is especially great on tablets.
  3. Once you setup your feed, don’t follow the major news sites. This will simply just fill up your screen with all of the random latest news stories that you want to cut back on.
  4. Update your feed readers regularly, cleaning out blogs, topics, and writers you used to follow that no longer interest you.  If you’re on your iPhone a lot and still want to use Apple News or Google News just simply delete the major sites that come preloaded and add your favorite writers, bloggers, or reporters. Just like on Feedly.
  5. Turn off any breaking news notifications on your mobile device. These all lead to the “hot stories” and are a big part of the news addiction distraction. Just because Google adds newsfeeds to your smartphone home screen doesn’t mean you can’t turn it off.
  6. Stop listening to network, commercial talk radio and start streaming or downloading podcasts.
  7. Cash in some left over frequent flyer points for a few good magazines. Believe it or not high-quality magazines like Fortune, Wired, and Fast Company still use fact checkers. A well-written article that’s going to press gets more eyes in front of it than something that is rushed out online as a “breaking story”.
  8. Rediscover the Sunday paper and a hot cup of coffee. If I added up all the time I spent checking CNN and other sites during the election cycle, I could probably free up four hours a week. Use a fraction of that time to learn about what’s going on in your local area as well as get a summary of world events that have at least been vetted by an editorial staff. If there’s a writer you really like, you can follow them in your feed instead of following the whole newspaper, as many people are tempted to do with major news sites.

The most important thing here is to change how you consume “news”. End your need to have the latest information. Wait for quality. Try going on a major news diet, just start following a few writers that look interesting in your feed readers search results, then grow from there.  If anything big happens, trust me, the Internet will make sure you hear about it. The rest of it can wait while you get on with your life.

The Frug

 

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Is that purchase worth it? Consider the cost per use, a simple strategy to help you decide.

 

panosmartappcomingjapanjt

Technology can be a pain in the ass. Smartphones, Game Consoles, DVRs, digital thermostats, talking cars, and home appliances. A lot of this technology is designed to improve our lives, give us more free time, maybe even help us save a little money.  Most of it falls short. In fact, when multiple technologies are combined, they can often have a negative impact on our time and quality of life. Multiply this by a family of four or more, and all this stuff can make you its bitch. Constantly beeping, demanding upgrades, presenting you with unrepairable failures, offering multiple support options, mostly paid ones, none of which actually solve your problem, and all of which require your time.

smarttv

Planned obsolescence has become a science, hurling consumers into a constant cycle of upgrades and repairs on items that didn’t even exist 10-15 years ago, taking time and attention away from more important matters. It in an affluent society we often just throw money at the problem, replacing the defective item with the new shiny model, while the old one often ends up in a landfill.

It’s possible to step off this treadmill, embrace simplicity or minimalism. I believe these are viable approaches that can change people’s lives. The problem most people have is that they been on this hedonic treadmill so long they are afraid to step off.  It’s the transition from having your life managed by stuff to a simpler path. That is the challenge for most people. I’ve been working to simplify my life for over three years: writing about it, working on it, giving stuff away, but still have a long way to go. Some progress is forward progress, and that’s what I’m focused on.

Something I found that has worked is evaluating any purchase, item you want to replace, or something you’re having trouble parting with, on a cost per use basis. Here’s how it works. Cost Per Use is the price of something divided by the approximate number of times you use it over the life of that item. So something you use many times per day may be a better investment than something inexpensive you use infrequently. Based on this formula, my iPhone is one of the least expensive things I own, and after I finish with it, I’ll give it to a family member, lowering the cost of use even further. As an added benefit, my iPhone replaced about 20 other items helping me lighten the load getting rid of everything from music CDs to handheld GPS units.

Some other cost per use examples

frug classic car

It’s best to start with the big stuff, so let’s start with automobiles. If you buy or lease a new SUV every three years you’re absorbing all of the depreciation and increasing your cost per use of that vehicle substantially. That vehicle loses most of its value in the first three years. If you buy a larger vehicle your cost per use is also higher based on gas and operating expenses.  To lower the cost per use, it would make sense to buy your next car like it’s your last. Purchase one high quality, fuel-efficient vehicle and keep it for at least 10 years. You can lower your cost per use even further if you know exactly the vehicle you’re looking for and can purchase a low mileage version just coming off lease, and keep that vehicle. Once those car payments end, you’ll find the maintenance costs required to keep the car in excellent running condition are a lot easier to swallow. I’ve also found that keeping a car in excellent condition, including the occasional carwash or detailing, makes me less apt to even think about replacing it.

Clothing can be phenomenally expensive when evaluated with cost per use.  It’s best to look at clothing as a wardrobe rather than trying to think about cost per use of individual items. Simple and classic items that go with everything and are very well made can really bring your CPU down. Steve Jobs was famously known for wearing the same thing every day, a black shirt and blue jeans. You can bet his cost per use on those turtlenecks was pretty low. The real savings here is time. If you limit your wardrobe extensively to a few types of high quality items think of all the time you save each day deciding what to wear. One of the things I’ve tried to focus on in redoing my wardrobe is not replacing things I get rid of, and working on wearing stuff out. At least as long as my wife Kelly will allow me to be seen in it!  The best way to do this is when you do purchase a new item, think about something of such high quality that it would last at least 10 years, stay in style, and replace at least five other items. When you compare it to running out to a big box store to buy crap, you’ll find that your overall cost per use goes way down, especially on items like shoes and jackets.

IMG_Oldbelt

When it comes to clothes, you often hear people say, “Well, I need a wardrobe for work.” With casual work environments and more people working from home  it’s easier to assemble a minimalist wardrobe than ever before. Courtney Carver assembled an entire wardrobe out of 33 items.  I think men have it even easier, less pieces, parts and accessories. Unfortunately, we tend to have expanding waistlines so there’s some additional benefits to staying in good enough shape to keep the same pair of Levi’s for a decade.

If you apply the cost per use formula to lots of things you’ll find you don’t have to give up much. I have a desk loaded with technology but both of my computers are now over 7 years old.  Using cloud-based software, faster Wi-Fi connections, and a few memory, and hard drive upgrades have kept them running like new.  I use them every day.

Next time you’re evaluating a new purchase, whether it’s a hoodie, a power tool, or even a new car, here are a few tips to maximize your cost per use.

  1. Avoid bells and whistles. This really applies to everything from small appliances to automobiles. Think of it this way, you can buy a product loaded with add-ons and high-tech features, sometimes for less than a simpler high-quality item. The more technology that’s loaded into any automobile or talking appliance with digital touchscreens, the more potential it has for failure. Evaluate the product on its ability to do what it was designed to do like wash clothing, vacuum the carpet, efficiently get you to your destination.
  2. Buy quality. It helps to look at online reviews on sites like Amazon. I always look at the average then remove one star, as people (including me) often overrate products they purchase to make themselves look smart!  Consider five-star reviews to be four-star reviews etc. Make sure there are enough reviews for a representative sample and average. On Amazon that’s like 100+ reviews.
  3. Do your research and wait at least one additional day before you make any big purchase. I can’t tell you how many times I’ve thought about purchasing something, going through the motions but then just skipped it, as I realized I didn’t really need it. Researching something helps me delay purchases.  For instance, I might research the new hot camera but realize my current camera is just fine.
  4. Are you replacing something that’s needed or just buying something because it’s on sale. I always ask my wife Kelly to go shopping in our closet first. There’s a very good chance there’s going to be a very nice pair of black shoes in there.  
  5. Wear stuff out. Make sure whenever you’re buying something you’re replacing something that you’ve worn out. 20 years from now when you look back on all the great steaks you cooked on that grill you’ll know it’s done its job. It can be pretty tempting to go out and buy a shiny new one but if you get it right the first time you won’t even have to think about it.

The Frug

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A Short Guide to Lean Investing.

taking-the-simple-path-to-wealth

By Brad Beckstrom

Have things gotten too complex?

Today we have more savings and investment options than ever before. Online tools and investment options that give us access to over 10,000 mutual funds and exchange traded funds, with another 40,000+ publicly traded stocks worldwide. Most of these investments are accessible without setting foot in a brokerage firm or bank. Online banking, trading, and mutual fund supermarkets give us access to sophisticated investment tools available only to professionals just a decade ago.

Yet, despite so many options, the US personal savings rate is hovering between 5% and 6% and has been in steady decline since the 50s. The retirement savings picture is even worse, one in three American adults has zero saved for retirement and 62% have less than $1000 saved. Many Americans like to blame the government for this predicament but in fact many countries with significantly higher taxes have savings rates that are 2 to 3 times ours.  On top of our tax advantages, we have a wide selection of pre-tax and post-tax savings options many other countries don’t have, including 401(k)s, IRAs, SEPs, Roth IRAs, Health Savings Accounts, 529 college savings plans, and about 10 more with various combinations of numbers and acronyms in the name. All of them are underutilized by any standard of measurement.

Part of the problem is complexity. We’ve made it easier to go out and get a loan for a new SUV or a 5,000 square foot house than to start saving or put that money away for retirement.  We’ve been incentivizing people to take out student loan debt instead of starting college savings accounts.

To solve the complexity problem we need to make it easier to save and invest. We need to create a simpler path to wealth through regular and efficient investing. I like to call this Lean Investing. Read more…

How to hack your Keurig Machine, make better coffee, and keep K-Cups out of landfills.

K55 Keurig Classic

By Brad Beckstrom

Ahh coffee, the fuel of empires. There is something about that hot, head-clearing beverage as it hits the back of your throat. I like to have two cups in the morning to get me going, any more than that I start shaking and develop twitches. I think of coffee as a do-it-yourself beverage, preferring to brew it at home rather than frequent coffee shop lines or convenience store baristas. You might think it’s odd that I have a Keurig machine, the hugely popular coffee system that unfortunately is filling our landfills with plastic K-cups. K cups are certainly not frugal compared to buying a bag of good coffee at Costco or grinding your own beans.

It turns out that the Keurig Classic is one hell of a coffee maker without the K cups. Part of the reason for the machines success is the ability to get the maximum amount of flavor out of the minimum amount of coffee. The problem is is that the K cups often don’t have enough coffee in them especially if you use the 8 or 10 ounce setting, you’re just adding more water.  

The Solution

A while back I purchased a Keurig Classic that was on sale due to the fact that a newer version Keurig 2.0 was coming out with an enhanced digital display. (Hint avoid appliances with digital displays, especially unnecessary ones). I had talked myself out of this purchase until I noticed the display of reusable K-Cups next to the coffee maker. I took the leap, calling it an experiment with the intention of returning the machine unless I absolutely loved the coffee. The results were fantastic, not only could I use my favorite coffee, I only needed half as much to get the same taste versus my old plastic drip coffeemaker.

reusable-k-cups

The Hack Read more…