Find the Missing Money, Maximize Your Returns, Get An Extra $100k

Get An Extra $100k Maximizing Money from Cash Back

It’s easy to find money in your budget that you didn’t even know was there. There’s so many ways to find extra cash you didn’t even know had through cash back programs! And what do you do with it after that builds real rewards?

What is this strategy? –

Let’s just make this easy. Many people don’t invest because they don’t understand how these financial systems work. For now, the strategy is simple: Invest the most amount of money with the least impact to your existing life.

We can refine later to optimize and improve. The big challenge right now is just to start. Find the money you already have available, but are not using. The base concept here is to leverage cash back programs and stack them whenever possible. Forbes gives a very basic introduction to extracting cash back here if you’re not familiar.

Why are we doing this? –

People who will debate the merits of tipping 18 vs 20% because the “other 2% is a waste above accepted norms” will entirely miss the opportunity to put 4%, 5%, 10%, even 25% or more back in their pockets when they walk out of the restaurant. Yes, I’ve listened to people bring up and actively argue about how much someone is tipping. Yes, on more than one occasion. Don’t be cheap, we’re talking about going out with an intention to spend money. Have you made sure you’re putting as much of a percentage back in your pocket from dining out? You’re going to go to a restaurant. You’re going to have that pizza (club pineapple! – are you with me?). Let’s make sure you’re getting the most out of that meal.

We’ve just covered saving vs investing. Upcoming posts are going to cover topics such as:

  • A more detailed dive on Points vs Cash Back
  • Cashing in on your data (that’s already being sold)
  • Apps to help manage your money
  • Stacking up returns (double, triple, even quad dipping for extra savings)

There are so many opportunities to bring dollars back to your accounts. You are going to go to the grocery store and you are going to buy food. So why not put a percentage of that spend back into your pocket? And as long as you’re putting that percentage back in your pocket, why not optimize that percentage so that you pull in as much as you can from something you were going to do anyway. And then why not take that cash back and every month transfer it into an investment account so that it earns interest. now you are not only getting free money, that money is now making money for you.

What’s it worth? –

The example below shows my real household spending for the year 2017 and the difference of using an optimized cash back credit card strategy versus the high-earning SPG (RIP) card for travel rewards. I’m going to call it right here…


Yes, like every rule there are exceptions. It’s all about having a plan. But unless you’re in a position already where you are able to skip off and spend the next 3 months traveling Europe, I would focus on extracting cash and putting it into an investment account. The long-term compounding benefit of taking the cash back and investing it is real and tangible.

Let’s do the math and look at the accumulated value of cash back vs credit cards (for regular spend, not factoring in signing bonus).

Cash Back vs Points Abbreviated

We’re going to dig into this in more detail in a future post, but here’s a quick summary:

  • The math doesn’t work on the surface here based on the spend for the cash back.
  • The cash back seems to be higher than it should be, but in some cases reality is that it is even better than it appears here. My actual cash back over the last year is over $2400 including some benefit from reimbursed work spending, credit card sign up bonuses, and more. However, as that is beyond the base-level credit card benefit for my personal expense, I am not including it in this analysis.
  • The point values are based on the Starwood Preferred Guest points from The Points Guy’s valuation from January 2018.
  • The $95 annual fee from the SPG Amex Card is distributed across the categories proportionally by spending.
  • My miscellaneous household expenses were particularly high due to a lot of spending on home repair & work, but rents/mortgage are not included here.

Compound Impact of Cash Back vs Points

You can see that a first-year spending provides an incremental 17% value and I’m pretty sure anybody you ask will take 17% more money. Looking at the benefits of cash back versus points, I’m not even accounting for devaluation over time here.

  • At a glance, 10 years in you will have 77% more value.
  • 20 years in is up to 116% more value versus points.
  • And if you started this early and kept investing your cash back over time, you would hit 308% incremental value and over $105k in 30 years versus a $25k point value.

It is easy to see the long-term benefit of investing cash back, even from this simplified example. Follow the blog for more!


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