Friday, September 2, 2016

August side hustles 2016

The great thing about doing side hustles to generate extra income is that you can hustle on your own terms.  The more hard work, time, and creative effort you put in, the more extra money you can make.  You can hustle as little or as much as you want, whenever you want.  It’s your extra money, and you can choose how you want to spend it.  Instead of focusing on what ideas don’t apply to you, try focusing on different side hustle ideas that you can implement to work for your situation.

Welcome to September.  It’s going to be a busy month for us as my dad is going to visit from Taiwan and spend 3 weeks with us.  Did you have a good August?

August was another busy month for us filled with work, time hanging out with friends and family.  There were birthdays to celebrate.  There were new friends to make.  Our son keeps getting bigger and bigger.

August was also a month full of BIG expenses for us.  The month started off with a leak in the main water line to our house.  This was discovered when a patch of grass on our lawn became extra wet and soggy.  It turns out that 35 years ago, the builders of our home used cheap plastic piping for the main water line instead of industry standard copper piping.  This has led to several neighbors down our block needing to replace their main water line over the last few years.  It was our turn.

It cost a total of $1,179.88 for the repair.      

Our house shares 2 separate fences: one with the neighbor to the side of us, and one with the neighbor behind us.  It’s been 35 years since those 2 fences have been replaced.  Over the years, the wood has been deteriorating slowly, developing cracks, worn out paint, and leaning due to loss of structural integrity.  It cost us $1360 to replace one fence and $1347.50 to replace the other, for a total of $2,707.50. Ouch.  We try to be good and respectful neighbors and it really was time to replace those fences.  I hope the new ones last another 35 years.

Our total home expenses for last month were $3,887.38.  Every homeowner knows that repairs are inevitable.  It’s just part of the cost of owning a home.  I’m glad we have a healthy savings account so that these expenses don’t break the bank.  It’s still pretty annoying to see such a large amount disappear.  And to top it off, I couldn’t use my credit card to make any of those purchases!  If I had used my Chase Freedom Unlimited card, I would have earned 5,830 points (3887 x 1.5 points on all purchases)!  Anyways, I can’t complain.  We enjoy where we live and we intend to stay here for a very long time. 

Here’s our monthly summary of side income that we have generated in the previous month of August.
 
Award Travel
On 8.8, I redeemed 20,000 Chase Ultimate Rewards points and paid $33.98 toward free flights for our family to fly from Taipei to Tokyo on Cathay Pacific, saving us $785.46 on the flight (after taxes and fees).
On 8.9, I redeemed 24,000 Chase Ultimate Rewards points and paid $93.21 towards free flights for our family to fly from Osaka to Taipei on Cathay Pacific, saving us $907.79 on the flight (after taxes and fees).
On 8.17, I redeemed 9,093 Rapid Rewards points and $11.20 towards a free round trip flight to San Francisco, saving me $163.96.

Cash back
On 8.23, I earned $5.10 statement credit on my AMEX Simplycash Business card.  I’m not really using this card much except to redeem for AMEX Offers.

On 8.22, I received my annual fee for my AMEX Premier Rewards Gold card.  The annual fee is $195.  I want to keep this card as it allows me to keep my AMEX Membership Rewards points and also has great benefits like AMEX Offers, 3x on travel, 2x on dining, and 2x at grocery stores.  The $100 airline fee credit also allows me to earn one $100 Amazon gift card each calendar year.  Anyways, I called AMEX retentions and was offered $50 statement credit instantly, and $50 statement credit after spending $500 within 60 days.  I took the offer and saved $100 off the annual fee.  Come January, I will get another $100 Amazon gift card essentially eliminating this card’s annual fee.
     


On 8.28, I claimed extended warranty on an LED dome light that I purchased for our rental property on March 12, 2015.  The light suddenly stopped working.  Since this product was purchased over a year ago, Home Depot would not take it back.  I simply called Citibank and they honored the extended warranty.  I received a check for $32.36.  I always make purchases with my credit card because of the extra protection the card offers. 

On 8.30, I received statement credit of $337.50 from my AMEX Platinum card.  I cancelled it after I was approved for the Chase Sapphire Reserve credit card since I have no purpose keeping two premium travel rewards credit cards.  The AMEX Platinum card has an annual fee of $450.  The amount that I received was a pro-rated annual fee refund.  In the end I still came out profitable by spending $112.50 ($450 - $337.50) and earning 100,000 AMEX Membership Rewards points and a $200 Amazon gift card.

On 8.31, I received a statement credit of $5.02 on my AMEX Premier Rewards Gold card for redeeming an AMEX Offer (5% cash back at Home Depot after making purchases of $100 or greater).

Paid surveys
On 8.22, I received $5 PayPal deposit from Pinecone Research
On 8.29, I received $5 PayPal deposit from Pinecone Research
On 8.2, I received a $45 Visa debit card from E-Rewards Medical
On 8.12, my wife received a $25 Amazon gift card for doing a video review survey on Amazon.com

Side Job
On 8.23, I received a check for $412.50 for teaching at the local university.  I really enjoy teaching and working with the students.

Rental Income
On 8.1, I received a check for $600 from our temporary housemate.
On 8.4, we received a net profit of $430 from our rental property.

Monthly Totals:
We saved $1,857.21 on airfare by redeeming points towards free travel
We earned $479.98 cash back
I earned $80 from paid surveys
I earned $412.50 for teaching at the local university
We earned $1,030 from rental income

All of this totals $3,859.69 from our side hustles for the month of August.  This income really helps offset our high expenses this month.  Keep on hustling my friends.

Monday, August 29, 2016

100,000 Chase Ultimate Reward points with the Chase Sapphire Reserve credit card

We’ve been playing the credit card points game for a while and have applied and been approved for all of the best offers.  There hasn’t been an exciting credit card offer since May 2015, when American Express briefly had a 100,000 point offer on the Platinum charge card.  The AMEX Platinum card has some excellent benefits such as free lounge access, Hilton Gold status, Starwood Preferred Guest Gold status, $100 Global Entry credit, and $200 airline fee credit yearly.  Other than those benefits, I’ve never wanted to keep my Platinum card long term.  The card only earns 1x points on every purchase and really isn’t useful for daily spend. 

Last Monday, Chase introduced a brand new credit card: The Chase Sapphire Reserve.  It will likely be the number one most popular premium travel credit card.  I am excited! 

All the credit card blogs and forums have already discussed the features of the Chase Sapphire Reserve in minute detail.  This card earns 3x points at restaurants and on travel purchases.  The card offers a lot of unique benefits including lounge access with unlimited guest access, $300 yearly travel credit, free Global Entry or TSA Precheck (up to $100 value), roadside assistance up to 4 times a year with $50 credit per incident, and much more.  See this Chase Sapphire Reserve review from Doctor of Credit for a complete rundown of benefits and features of the CSR.  The best part of this card is the hot new 100,000 point sign up bonus after spending $4,000 within 3 months.  I would value this sign up bonus at over $1,500. 

The annual fee of the Chase Sapphire Reserve credit card is $450, which is quite a bit if you look only at the fee itself.  Looking deeper into the benefits, I would give this card more value than the American Express Platinum card, which also has an annual fee of $450.  Owning this card for the first year is definitely worth it.  You effectively get $600 worth of travel credit ($300 per calendar year).  You get Global Entry, a $100 value.  You get an unbeatable 100,000 point sign up bonus.  Lounge access is also much better with the Sapphire Reserve than the Platinum card because the CSR allows unlimited guests while the Platinum card only allows the cardholder lounge access. 

When the card was first announced last Monday, I had to have it.  I applied for it first thing Monday morning.  I did not get instant approval and the following message popped up on my screen:
I was bummed.  Immediately I called the Chase automated line at 800-432-3117.  When prompted, hit #, then 3, then 1, and enter your social security number.  The automated response will indicate the status of your credit card application.
  • 7-10 day message is likely a denial
  • 2 weeks message is likely an approval
  • 30 day message means Chase is still reviewing your application.  Many users report 30 day message means approval.

Knowing this information, I was especially bummed out to hear the “7-10 day” message, which meant that I was likely denied. I immediately called the Chase reconsideration number at 888-245-0625.  

I spoke with a live representative who looked more closely into my application.  I explained that I was excited about signing up for this new Chase card.  I was told that I had too much credit with Chase.  I do own 4 other Chase credit cards currently including the Freedom, Freedom Unlimited, Ink Plus, and Ink Cash.  I told the rep that I would be happy to reallocate my credit limits around if I could get approved for the CSR.  He put me on hold for a few minutes and then tentatively approved my application.  My application was put into a queue for review by a senior lender.  I anxiously waited one week and today I found out that I had been approved for my Chase Sapphire Reserve credit card!

When logging into my Chase account, this new account already shows up:
The Chase Sapphire Reserve is the ultimate travel credit card.  I can’t wait to get my hands on mine.  You can apply for your own at Chase.com here. 

Sunday, August 21, 2016

Why do high earners still live paycheck to paycheck?

When I first started working part time in high school, things were great.  I could finally earn money to buy the things I wanted.  I no longer needed to ask for things from my parents.  If I wanted something, I just had to put in more hours.  

I continued to work part time and hustle on the side during college.  I signed up for my first cash back credit card in 2000, the Citibank Dividend card.  At one point that card earned 5% on all purchases.  I used that card on every expense possible.  I pretty much ate out for 80% of all my meals.  My diet was unhealthy.  If I got a bonus, I bought something nice like a new palm pilot or a new digital camera.  Every time I received money, it would go towards paying my credit card bill.  My motto in college and even in professional school was “spend now, save later.”  I spent plenty of money going out to eat at nice restaurants, drinking at the clubs, and buying the latest gadgets.  I kept telling myself “I’m going to start saving as soon as I start making more money.”

I got my first full time job making 35K a year in 2008.  I moved to Reno, Nevada and rented a room out of a big house for $500 a month with all utilities included.  Life was good; I was making real money!  This was when I first heard about 401K retirement plans.  I went to the HR of my office and then found out that first year employees were not eligible to participate in the company 401K plan.  I gave up thinking about investing and told myself I would start contributing to my retirement when I made more money.  I paid off all my credit card debt and started saving a little bit of money with each paycheck. 

Then the new Apple MacBooks came out, and I had to have one.  Then the new Apple iPhone came out around that time and I had to have it.  I started getting too lazy to cook for myself at home.  I convinced myself that eating out saved both time and money.  I often treated friends to drinks at the club.  It wasn’t long before I was living paycheck to paycheck.        

My next big income jump was from 35K per year directly to 80K.  This was in 2009 and I did not negotiate too much on my offer because our US economy was in recession and I was just happy to have the opportunity.  I was now making some big bucks!  Before I even started my 80K job, I purchased a brand new Lexus IS250 for around 36K.  My 1999 Honda Accord (given to me by my loving parents in college), which was running smooth as silk at over 100K miles, suddenly wasn’t good enough for me.  I was making big boy bucks and I thought it was time to upgrade my car.  This locked me into 3 years of monthly car payments.   

As my income jumped from 80K a year to 85K and then to 90K, I was finally able to start contributing some post-tax money into a Roth IRA and some pre-tax money into my company 401K.  I also had the sweet opportunity to live at home rent-free.  For the first time in my life I could really start to save some serious money. 

In 2010, not long after the US housing crisis, my family told me it was time to move out.  I took a big personal loan from them to use as a home down payment.  I went to a mortgage broker and bought as much house as my loan would qualify me for.  At the time I thought “if they will approve me for a loan this big, my finances should be fine.”  Plus everyone kept telling me that a “home was the best investment.”  This caused me to buy much more home than I needed, a 4-bedroom home for a single person.  One good thing that came out of the purchase was the low interest rate (4.25% at the time for a 30 year fixed mortgage).  In hindsight, I should have looked for a smaller and cheaper home. 
 
With a new house came some new expenses.  I had to get new furniture.  I needed a new bed, so I figure why not buy the best bed possible?  I ended up buying a $4,000 Tempur-Pedic bed.  At the time I thought I got a great deal on my bed: no money down and 0% APR for two years!  I bought a freaking bed on credit – this locked me into 2 years of monthly payments. 

Making mortgage payments really kills your cash flow when you’re used to living rent-free.  To increase my income, I quickly found 3 housemates to rent the 3 extra rooms to.  This worked out well, as the housemates were students at the local professional school.  They paid for the majority of the house expenses and my rent was effectively reduced to around ~$300 a month!

Time passed.  I met my woman.  She moved in and our housemate situation changed.  One income now became two incomes.  We started eating out more frequently.  We signed up for DirecTV.  We went to Starbucks all the time, almost on a daily basis.  We both felt good about setting aside 10% of our income into retirement accounts.  We leased a Toyota Prius for $0 down and locked in 3 years worth of lease payments at $342 a month.  We started saving up for our wedding.  Money got tight but we always seemed to find ways to come up with more cash flow.  We always found one or two professional students to rent out rooms to.  I did some teaching at the local university on the side for more income (I still do once or twice a month).  Even with extra income, we still ended up living paycheck to paycheck. 

Then everything changed.

We realized that we were still struggling with our finances, despite both having good incomes and steady raises.  By now we were almost pulling in 200K a year.  And yet we had a pathetic amount of savings and investments.  Every time we seemed to start saving up some money, something would come up and deplete our cash stash.  Something needed to be done or else we would find ourselves working forever.  That’s when we started reading about the FIRE (Financial Independence and Retiring Early) philosophy of handling money.  We discovered amazing forums such as Bogleheads.org.  We discovered amazing bloggers like Mr. Money Mustache and Jlcollinsnh; they taught us that life was not about this never ending stressful cycle of working and spending.  When living paycheck to paycheck, you don’t have any freedom.  Reading articles from bloggers that retired early (or are on their way towards early retirement) gave us the drive to start on our own financial journey.    

Newly motivated, we started making big changes to our finances.  We cut out frivolous expenses like eating out every day and satellite television subscription.  We stopped going to Starbucks every day.  We switched to cheaper car insurance.  I finally paid off the car I purchased in 2009 and the bed I purchased in 2010.  It felt good to not have to deal with those monthly payments.  When our lease ended, we were able to purchase another car in cash so that we would not have to worry about any more car payments.  We started to save and invest more.  We discovered the benefits of credit card points to help us save money on travel expenses.  I started this website to share our financial tips and progress with friends and family. 

I used to think that making more income would solve all of our financial problems.  It’s not just lower income families that find it hard to save money.  A recent study finds that 1 out of every 4 families making $150,000 a year or more is living paycheck to paycheck.  1 out of every 3 households earning $50,000 to $100,000 per year live paycheck to paycheck.  And 1 out of every 2 families making $49,999 or less per year live paycheck to paycheck.  Spending without thought will easily ruin your financial security.   

We have friends that live in nice houses, drive nice cars, and yet are always complaining about money.  Having nice things doesn’t make you successful or wealthy.  For example, one of our mutual friends brings in over 500K a year, yet is always complaining about not making enough money and needing to pay bills.  They lease 3 vehicles and spend over $1,500 a month on cars.  They have high student loan balances.  Their child has a lot of after school activities.  They live in an area that has a high cost of living: higher mortgage payments, higher property taxes, higher home insurance, higher car insurance, and even more expensive gas.  Depending on your expenses, how much you spend can easily kill your budget. 

While having more income definitely helps, changing our lifestyle has made the biggest difference in our finances and our quality of life.  Bogleheads are constantly advocating others to LBYM, or live below your means.  We found that cutting back on expenses and investing more wasn’t difficult to do once we made a commitment to work towards financial freedom.  We’ve been saving 50% of our income over the last year and it’s definitely pulled us out of our paycheck to paycheck lifestyle.  We have an emergency fund that will cover 6 months worth of expenses and we are working to increase that fund to cover 1 year of expenses.  We’ve both worked hard and continue to advance in our careers.  Recently we started investing in our son’s 529 college fund. 

Everyone’s financial situation is different.  We all have different struggles.  Once you start saving more and paying yourself first, you can break the cycle of living paycheck to paycheck and work towards financial freedom.  Life gets much better after that.  Financial emergencies may always continue to pop up, but you will be better equipped to tackle those situations.  We are working hard and can’t wait until we hit financial freedom.  This will allow us to work less, travel freely, spend more time with family, and volunteer more.  Life is long, plan accordingly.    
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