After the TSP, I invest my money in Betterment and Vanguard. I track all of my investments with Personal Capital. I also wrote a short, 2 hour book summarizing this site. You can buy it here.
Update 23 February 2014: Of course as soon as I wrote this post, Barclaycard increased their spending minimum to $3000! However, if you follow the same spending pattern below for 90 days, you can still hit the $3000 threshold within the time limit and activate your $400 bonus.
Collecting sign up reward bonuses with credit cards can seem intimidating if you haven’t done it before. For me, the initial hesitation I had was “how can I possibly spend that much in a month to collect the bonus?” Even if your monthly spending is low, you’ll be surprised how quickly you can reach the bonus thresholds.
Most cards give you 90 days to reach the spending minimum. Here’s a real world example, based on my own spending, of how to reach the
$1500 $3500 spending minimum on two cards to generate $500 of credit card rewards in just 30 90 days.
Day 1 – Apply for Your Cards
There’s only two cards you need to quickly generate $500 in rewards:
$400 Bonus: Barclaycard Arrival World Mastercard
+ $100 Bonus: Chase Freedom card
= $500 in cash and travel rewards
The Arrival card requires $3000 of spending in the first 90 days of card ownership to receive 40,000 bonus points, which are worth $400 off any statement with travel expenses on it. See my full review for the card to see everything that qualifies as a travel expense and how to receive an extra $40 when you apply.
Chase Freedom offers $100 cashback bonus for only $500 of spending in the first 90 days. This is one of my favorite cards in my wallet, with 5% back on gas 6 months of the year. Combined with a Chase Sapphire Preferred, your Ultimate Rewards points can go a lot further for travel.
Cards Arrive by Day 7 – $230, 15% complete
After the first day of receiving your new cards, you hit the grocery store for your normal weekly run and fill the gas tank of your fuel efficient car. Your internet bill also arrives, so instead of paying that off with your other credit card, use your Arrival card so you’re $30 closer to your 40,000 points.
Day 10 – $380, 25%
$120 Mobile phone bill – Arrival
$30 Dinner out with friends – Arrival
Day 15 – $555, 37%
$25 Haircut – Arrival
$100 Groceries – Arrival
$50 Gas – Chase
Day 16 – $705, 47%
$100 Utilities bill – Arrival
$50 Date night – Arrival
Day 22 – $905, 60%
$120 Groceries – Arrival
$50 Gas – Chase
$30 Breakfast at the cafe – Arrival
Day 26 – $1150, 77%
$245 Car insurance payment – Arrival
Only 19 days after receiving the cards and you’re 1/3 of the way to your Barclaycard payment threhold. Plus you’ll receive double points for your purchases, so you’re up to 42,000 points worth $420 towards airfare, hotels, and other travel expenses.
Day 29 – $1500, 100%
$150 Groceries – Chase
$50 Gas – Chase
$150 Tickets to concert – Chase
With a final trip to the grocery, filling up that gas tank one more time, and buying tickets to that show you really wanted to go to, you’ve hit the $500 minimum spending threshold for the Chase Freedom card. In less than 30 days you’ve spent $1500 on your routine purchases like gas and groceries and received over $100 in return from Chase. Continue to put your routine purchases on your Barclaycard and you’ll see the $400 bonus in less than 90 days.
It just goes to show how easy it is to redirect your normal, everyday spending to your rewards credit cards to reap some bonus cash. No need for “manufactured spending” or buying Amazon gift cards to reach your spending minimums. And remember that this was for only 30 days, whereas most credit cards give you 90 days to reach the spending minimums.
Credit card sign up bonuses are not going to make you rich. But they can be a nice bonus to your income if your financial house is in order and you have a decent credit score. It’s always exciting to receive checks in the mail or pay off your credit card bill with reward points.
2 Websites I Use to Achieve Financial Independence Faster
I have investment accounts all over the place. To keep track of all of them in one place I use Personal Capital. It combines all of my accounts, shows me where I may be overpaying in fees, and provides beautiful charts showing my overall asset allocation and performance.
I use Personal Capital to track my Roth and Traditional TSP, Vanguard IRAs, banking accounts, SDP, and my Betterment taxable account, all in one place. It's free, secure and presents me with a one-stop dashboard so I can see all my money on one site.
Read my full review of Personal Capital and see how easy it can be to manage your investments in one place. Trust me, once you try it, you'll love it.
P.S. - If you have over $100,000 of assets and a 401k, you really need to run the Personal Capital 401k Fee Analyzer.
The best way I know to achieve financial independence is to keep your investments simple, diversified, automatic, and low-cost. Costs eat into your returns like you wouldn't believe! A 1% difference in expense ratios can mean $100,000s lost to fees over a lifetime of investing.
Even if you're a DIY (do-it-yourself) investor like I am, you need to check out Betterment. You can read my full review here, but the bottom line is for only $250 per $100,000 invested (0.25% expense ratio) you get simple, diversified, and automated investing. In addition every account now gets free Tax Loss Harvesting+ features, which should increase returns for the average investor more than the minuscule management fee.
If you're not a DIY investor or are just getting started with investing, then you definitely need to check out Betterment. It's what I recommend to my family and friends who aren't strong investors or don't care to learn about asset allocations, diversification, or rebalancing.