Well, it’s official: the cash-back reward from my credit card is being credited to my October balance. Thanks to choosing a card that offers some pretty serious rewards, as well as making an effort to put almost all my spending on said card, I’ve managed to build up over two hundred dollars in rewards cash, all of which will go to lessen the expenses of my next credit card bill. It’s pretty sweet that I’m going to get paid back in actual cash (well, a decrease in the amount of cash I’ll need for the October bill, which is almost as good) rather than discount coupons, as my other, older credit card did.
The bitter part comes when I calculate how much I must have spent in order to get that reward. My card offers ‘up to’ 5% cash back on purchases (it’s an American Express Blue Cash card, by the way), but there are a few catches: first, that rate only applies to certain types of spending (supermarkets, drug stores, and gas stations), with all other purchases earning a much smaller 1.5%. Second, you have to spend at least $6500 dollars in a year before you can earn those rates; before you reach that threshold, you’ll earn only 1.25% on supermarket, drugstore, and gas station purchases, and 0.50% everywhere else. All of this means that my rate of return on my credit card spending is much, much lower than the advertised and highly hyped 5% return.
If we assume I was getting an overall return of 2% on my spending (which might be a bit high, anyway, but makes the math simple), then I must have spent over $10,000 last year in order to get this reward. So, it’s not an unambiguous win. Still, back on the sweet side of things, it’s two hundred dollars that I would have had to pay out of pocket if I didn’t get this reward, and for the most part, all the spending was on things I would have purchased anyway, either with my other credit card or with cash. So, overall, I’m going to call this one a win, even if it’s not an unambiguous one. Now, onward to the good blog posts this week!
Good Blog Posts Last Week
Get Me in a Good Mood for Six Months – If you’ve been reading my weekly thoughts column for a while, you’ve probably noticed that I am a fan of Poorer Than You’s Stephanie. She has quite the impressive blog, and recently graduated from college with an impressive amount of student loan debt. She’s also currently trying to get a job at Sam-e writing their ‘Good News Blog’. It’s hard to think of someone more deserving (heck, if her blog doesn’t make for an excellent resume for this position, I don’t know what will. However, in order to be in the running, Stephanie needs to gather enough votes to make the top twenty and be able to submit a video for consideration. Follow the link, and be sure to vote for her (who knows, perhaps she won’t be ‘poorer than you’ for too much longer).
Is Christianity the Only Path to ‘True’ Financial Peace? -Baker, on Man Vs. Debt, raises an interesting question about whether Christianity is the only way to financial peace, something which I’d never really considered. I have faith, but I’m not terribly religious (that is, it doesn’t touch as much of my personal life as it does for many people), and my church is fairly liberal, teaching tolerance of other religions. Hence, I never really thought of my faith as the only path to anything, including a ‘good end’ in the afterlife. This is a very thought-provoking video, though, and I’ll have to consider what my faith and my money mean to each other.
How Much Do the Wealthy Really Pay In Taxes? – An interesting exploration of how much money the wealthy really pay in taxes. Contrary to what you might believe, the actual amount (as a percentage, not in absolute terms) paid by the top earners is roughly the same as those who are right in the middle of the income distribution, as noted on My Life ROI. It might seem a bit counterproductive, as the federal income tax does, in fact, make higher earners pay more, but that’s not the only tax system in play. No, you also have to consider Social Security taxes (which are capped, and make up a larger portion of the low-income tax burden), long-term capital gains taxes (which are lower, and paid more by the well-off), and any number of other additions and addenda to the tax code that shift some of the tax burden away from the highest earners. It’s good to be reminded of the larger picture when it comes to taxes.
How To Read All the Information on Stock Quote Page – One of the most important parts of being an informed investor is being able to read and translate all the information you have available. The Weakonomist gives us some help in that department, providing a break down of many of the features included in the typical stock market posting. I did a similar post myself, showing how to translate online stock data, but it’s a lesson that should be repeated until it’s well learned.
5 Lessons Marathon Runners Teach Us About Investing - As you might be able to tell, I like unique comparisons of personal finance to other aspects of life and the world, as well as lists (such as the one on superheroes and investing from Green Panda last time). Here we have another one, on the Writer’s Coin, comparing investing to running a marathon. It’s a very apt comparison; if you try to sprint (or get rich quick), you might, in some rare circumstances, be able to win the race. But most of the time, you will do your best and place much higher if you go slow, look towards the long term, and pace yourself. Keep in it, and you’ll get there eventually.
Where The Amateur Financier Has Been Featured
Also, I’m going to be hosting the Carnival of Twenty-Something Finances next week, so be sure to get your articles in if you plan to participate!