The points and miles hobby/game/lifestyle is fun. It’s been very rewarding to me, but also continuously changing. To derive substantial rewards, it requires some effort to monitor the latest news and stay on top of things, but that work has, and does, pay off. Point and miles, or loyalty based rewards, are also offering me benefits that I didn’t count on when I started like saving money and rewards for retirement.
I’ve written about the topic a little before, but my new jam is FIRE, or financial-independence-retire-early. It’s also a pretty cool topic that I’ve linked to my enthusiasm for points and miles. Although I’ve only recently (as in months, not years) got into the FIRE movement, I’ve taken considerable steps to achieve my savings and net worth goals.
I keep a spreadsheet that tracks all of my credit card sign-ups and accounts, credit card spending, loyalty rewards, and also finances along with net worth. Basically when I started listening to some podcasts and interviews of people involved in high rates of savings, they talked about financial concepts that I hadn’t taken the time to plot out, such as net worth. Now I update that data point a few times a week.
Up, Up, and Away
I’m fortunate in that I have no debt now. In my 20’s though I was kind of a vagabond. Other than for travel, I didn’t save money for retirement. Heck, less than 10 years ago, I actually had a negative net worth, but now am over half way to a comfortable retirement number. I’m basically on the wrong side of the compound interest curve. For those not totally familiar with that, there’s a link here and here that you can learn from. Basically saving and investing more when you’re younger is massively more advantageous than doing so later in life. I’m kind of in the middle of that, but definitely more towards the end of that life spectrum.
This the part where I’d love to write down my current net worth, account types and balances, and specific savings and investment progress that would give some added color to this story. Sadly though, I don’t feel comfortable doing that. There have been other points bloggers who have had people call hotels and cancel reservations and interfere in their private affairs. I’m just not comfortable giving out that much personal information, as I know there are some less than savory individuals who read this blog. With that said, here are some generals:
Oct 3, 2019 – cashed out approximately $3,000 worth of U.S. Bank Flexperks and created a goal of adding $100,000 to my net worth by the end of 2020 (or roughly 14 months from that date).
Nov 15, 2019 – am roughly $38,000 of the way to that $100,000 goal, in just 43 days.
I’m not brining up any of these stats to boast, or compare to others. I’m sure there are plenty of people who have that stat beat, even given the same resource allocation, and that’s fine. It’s just a goal I have, and I’m trying to figure it out day by day. Like in my early days in points and miles collecting, I enjoy the learning curve. I know there’s a lot that I don’t know. Learning, and filling in the information gaps along the way, is part of the fun. Seeing my net worth amount rise each week is also a nice bonus! The excitement I get seeing my portfolio amounts rise is very similar to seeing my points and miles balances increase each month. Now I have two addictions lol.
Show Me the Money
The money that I’ve saving comes from a variety of sources like my employers HSA (health savings account), Roth IRA contributions, 401k contributions, manufactured spend, checking and savings account bonuses, lower spending, and personal savings. My general savings plan looks like this:
- max out HSA – $3,500 a year
- max out Roth IRA – once a year of $6,000
- max out 401k – $19,000 (or 25% of earnings including a 5% match from employer)
- $3,000 pulled from my checking directly into investments 1x a month
Earlier this year I was sending $1,200 a month from my a checking into investments, then $1,500, then $2,000, and now $3,000. All in all, I’m saving well over $5,000 a month. I work at a nonprofit and make a pretty normal wage that’s actually under 6 figures. I could make more money at a larger publicly traded or privately held company, but I choose to work where I do for various reasons. So given my salary, saving over $5,000 month is a nice accomplishment. A good portion of that savings is either tax free or has already been taxed too, so that is also saving money down the road. A side benefit of saving that much per month is that it pushes me to keep up to date with earning some extra money on the side. I don’t care for the term “side hustles” (probably the same ad wizard that came up with “travel hacking”), but I am actively engaged in earning money on the side.
I’m investing my money in mostly U.S. stock market index funds, although I do have some stocks, mostly established, duopoly type companies that I like. I think I have a decent nose for good companies, but also don’t have the time to monitor individual investments the way that I’d like. I therefore go mostly with index funds, which is a popular FIRE path. It’s also a path that Warren Buffett and others recommend too. I’m still earning points and miles at a good clip, but it’s not as much of a focus as saving is right now.
My $100k challenge does partly hinge on the success of my investments. So in that respect, it’s kind of out of my hands. However, in the meantime, I’ll do my part to save, and hope that the investments will do their part.