Roth or Traditional IRA?

By Jover Originally drafted July 11, 2016. Posted March 10, 2018

Congratulations! You’ve decided to put your retirement future in your own hands and open an Individual Retirement Arrangement (IRA). But which should you choose, a Traditional IRA or a Roth IRA?

A Traditional IRA allows an individual to invest money pre-tax. That is the one true time when you can “Pay Yourself First”, even before Uncle Sam gets his hands on part of your paycheck. Investments grow tax-deferred, and you pay ordinary income taxes when you withdraw the money in retirement.

A Roth IRA is an account whereby the individual invests money after tax has already been paid. The same contribution limit of $5,500 still applies (in 2018), so why invest after-tax dollars? Upon the age of 59.5, all of the money in a Roth IRA can be withdrawn tax-free, because taxes were already paid in the current year, none are due on the investment dollars, nor the growth on those dollars.

So how do you decide which is right for you? It depends on your outlook.

If you expect tax rates to go up in the future, or you will have more income that puts you into a higher tax bracket, it might make sense to pay the income taxes today and invest in a Roth IRA for tax-free retirement dollars later.

If you have a high salary today and plan to live on less income in the future, a Traditional IRA is the way to go, to lower your taxable income in the present and pay taxes in a lower tax bracket in the future.

If you aren’t sure what to think, it is possible to split your $5,500/year investment into both. This year I already maxed out my IRA contributions, with $3,000 going into Traditional IRA (to lower my current taxes) and $2,500 into my Roth IRA (to give me tax-free withdrawals in retirement).

Another consideration is what types of investments you will be making with each account. Some investments such as stocks or REITs pay dividends, which may be treated as taxable income. Consult a tax professional to see what is right for your preferred investment choices.

Some people prefer the Traditional IRA because $5,500 of your annual income can go straight to the account and you’ve met your annual maximum contribution and will reduce your taxable income by $5,500. On the other hand, one must earn $6,160 before taxes (assuming 12% for this example) to earn $5,500 after taxes for the maximum Roth IRA contribution, and there are no tax benefits in the current year.

There are income limitations for Roth IRA contributions, which vary depending on marital status. Some people have figured out a back-door Roth conversion from Traditional IRA contributions, but taxes must be paid in the year of the conversion.

A final word on the Traditional vs. Roth IRA battle royale is that there is no wrong decision. In fact, it may be useful to employ any of the different combinations explained above, including contributing to a Traditional IRA during your working years, and then using a Roth IRA conversion ladder as your income shrinks in retirement. Many Early Retirees use this strategy to combine the tax benefits during their working years with the tax-free income benefits during early retirement.

Soured on Precious Metals

By Josh Originally drafted July 11, 2016. Published March 10, 2018.

In an attempt to become a diversified investor, I began purchasing precious metals in mid-2012. Earlier, in 2011, Silver had touched $50 to match the all-time high experienced in the 1980s, and Gold had broken out to new highs above $1900. By the time I started investing, Silver had retreated 30% to around $35/ounce, and I was not looking to get into Gold near its all-time highs.

So began a series of novice investor mistakes, especially in the realm of precious metals investing. The first place I started was eBay, since it is so familiar to most of us and easy to bid on an auction or click “buy it now” and have your order on its way to your door. I began buying premium silver products and graded silver coins, both with massive premiums above the “spot” price. Spot price is basically like a stock’s price, there is a Bid and an Ask price at any given point in time. As silver continued to slide, from around $35 when I started buying, all the way down into the $13.xx range in early 2016, I chased the price down, down, down by buying more, more, more silver.

I also eventually got into the Gold game by buying expensive fractional gold rounds and coins 1/10 or ¼ of an ounce at a time. Fractional pieces come with their own premiums attached, because it is expensive to mint such small coins/rounds when calculated on a per-ounce basis. For example, it takes 1000% more time, dies, equipment to pump out 100 ounces of 1/10th ounce fractional gold pieces as it does 100 one-ounce gold coins. Due to the extra expense of the premiums and the falling gold price for the past 3 years, I found myself down about 25% on my gold purchases. In June 2016 I sold all of my gold coins and rounds, as I had decided to close out my investment in Gold.

But back to Silver, I have occasionally made some money in Silver, even with the falling spot price. Usually around payday, I would stop in at local antique shops, coin shops and jewelry stores to see what silver coins they had for sale. I once bought a Spanish Ocho Reale (pirates called these “Pieces of 8”) for $20 and sold it on eBay for $60. I also paid $20 for a 20 gram silver coin from the Monnaie de Paris and sold it to a buyer in China for $64. But for the most part, I lost money each and every time I bought silver because the spot price continued its helter-skelter decline from $50 in 2011 to less than $14 at one point in 2016. I was able to accumulate over 800 ounces of silver by making small irregular purchases over the course of about 4 years, but my silver only held about 2/3 of the value of what I had paid, even with the “dollar-cost averaging” that I thought I was employing.

Luckily for me, silver prices bounced a bit, crossing $20 in 2016 before retreating back into the $16-17 range for quite a while now. In 2016 I sold off some pieces that I had bought at lower prices, and then in 2017 I sold off approximately 60% of my silver to put that money to better use in my taxable Vanguard brokerage account. I will no longer be blindly purchasing precious metals for investment’s sake.

So here’s my case against holding physical precious metals:

  • Cost of storage (bank safety deposit box, private facility storage, or a safe inside your home)
  • Unlike many other investments, there are no dividends
  • Not very liquid, especially for premium pieces. You might be able to unload at spot price or a little below, but you won’t get true market value without selling each piece individually on a site like eBay, and then you will pay listing fees and PayPal fees to the tune of around 13%
  • Very volatile, especially silver. Sometimes can swing in price by 3-4x the amount that is typical in the broad market index funds. This amount now seems tame, in comparison to cryptocurrencies and their wild roller-coaster price changes.

Despite all of this, I am still thankful for my journey into silver coins, bars and rounds. I was able to satisfy my “spending” urge, while buying something that actually retained some/most of its value. Instead of buying a new video game or another piece of electronics equipment that was out of date within 6 months, I bought items that have been appreciated for sometimes more than 100 years. This helped me get into the habit of saving instead of spending, although I really wish I had put this money into a Roth IRA back in those years because I would have more than doubled my money instead of taking the loss that I have experienced.

I also spent a lot of time in those years cataloguing my purchases into spreadsheets as well as a YouTube channel. If you’re extremely bored or want to see what I was so obsessed about, check out my old Jover Silver channel where I still have 20 videos posted. Look at the shiny goodness! No wonder I couldn’t resist.

Useful travel tools: TripIt Pro

By Jover March 10, 2018

For a long time, I avoided the whole world of travel hacking. I don’t know if it was the word “hacking” in the name, or if I was just OK with earning 1% cash-back or some points to spend at Best Buy (a former addiction) with all of my usual purchases. I didn’t shy away from it for the “Anti-Credit Cards” reasons that D.R. preaches, because I had already been responsibly using credit cards since 2005, when I first got out of college.

Once I made up my mind to try it, I fell down the rabbit hole. If you’re interested in starting, don’t open any cards until you’ve taken the free course at TravelMiles101.com. It will change your life! I also have a resources post here on the blog if you’re looking for more digestible information on some of the top cards on the market.

Once you have a stash of points burning a hole in your pocket, you might start making all sorts of travel plans. Confirmations for flights, hotels, and event tickets start to clog up your inbox. This is where TripIt can be a huge help. TripIt is a product of Concur, one of the largest travel and expense management service companies for businesses, and it feels like they’ve made this product for both leisure and business travelers.

I travel frequently for business, and I have a mixture of business and personal hotel reservations floating around in my inbox at any given time. I also get email confirmations on my parents’ travel plans, especially when they come here to Florida to visit me. Sometimes I will also reserve a hotel room *just in case* because it’s a busy time of year such as the Legislative Session in the state capital city. Once you link TripIt to your email inbox, they do all of the rest.

Take a look at the screenshot below. It shows all of my upcoming travel plans that involve a flight or an already-booked hotel and/or event ticket. The trip in September in Orlando is my first FINCON! 🙂

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As you can see, I have some upcoming workshops and conferences already in my travel plans. If you click on any of the individual trips, it will show you an itinerary of all of your related travel confirmations, as shown below.

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I upgraded to TripIt Pro in August 2017, and I am thankful that I did. They were running a special at the time, $34 for the first year, regular price $49. Now I receive “Go Now Alerts” which tell me when to leave for the airport, Terminal and Gate reminders (which help when traveling through an unfamiliar airport or when gates suddenly change), Check-in reminders (24 hours before on Southwest Airlines flights to get a good boarding position, amirite?), automatic trip sharing with your network that you set up in the app (great for work or for personal reasons), and best-of-all: Flight Refund Monitoring!

Last night, I received an email from TripIt at 9:18pm stating that my upcoming flight to Atlanta had decreased in price by $51, and they gave me the steps to follow to request that refund. I called Southwest and they were able to quickly make the change, and gave me a $51 flight voucher, good for one year from the purchase date of this flight. This one refund more than paid for my $34 annual fee on TripIt Pro! I’m totally sold.

In case you’re not quite sold, here’s a few more benefits:

  1. Point Tracker – once you get involved in the travel hacking game, you will have points spread across multiple hotel, airline and flexible bank point programs. This saves a lot of time spent manually tracking your various points.
  2. Seat Tracker – helps you find a better seat on flights
  3. LoungeBuddy – Comes with a free $25 airport lounge credit
  4. CLEAR – Not all airports have this service, but TripIt Pro comes with a 4 month free trial for the fastest way through airport security, even faster than TSA Pre-Check!

My first side hustle: Uber driver

By Jover March 9, 2018

[This is Part 1 of a 3 part series on the ups and downs of my first side hustle. I will link to Parts 2 and 3 at the bottom.]

Before I get started, I need to give a little bit of background as to why I ever considered becoming an Uber driver:

  1. I spent 8 years as a City Planner in my area, so I know the area very well.
  2. I had just started a new job, which allowed me to work from home and completely eliminate my commute. I figured I might as well put my car to good use, otherwise it would just sit in my parking spot.
  3. I was driving a BMW 525i, on which I only owed about $2,500 at the time. My thought was that I could drive Uber, make some extra cash and pay off the loan. I completed that in only 2 months.
  4. I’m don’t really get excited about going out to the bars and wasting money, but figured this might allow me to at least get out, socialize, and make a little bit of money. With the cash surplus, I maxed out my Roth IRA for the first time, and started a taxable brokerage.

I had heard about Uber maybe 6 months earlier, as my brother in law had been a driver for a while in Indianapolis. Indianapolis has major sporting events throughout the year, with the Indianapolis 500, Colts, Pacers, Big Ten championship games in various sports, etc. I live in Southwest Florida, which is a tourist destination in the winter months for people up north who are escaping cold, snowy weather in favor of beaches or golf trips.

One thing I really liked about the opportunity to drive with Uber was that I was able to make my own hours. With the Uber Partner app, I could turn on anytime I wanted to/was available to drive, and I could shut it off anytime I wanted to/needed to do something else.

Uber works based on GPS, so the closest available driver gets the first opportunity to accept or decline the ride request. We only have 15 seconds to accept, or else the request is passed along to the next closest driver. This practice provides for the ride to be provided as quick as possible to the passenger, while all-but-avoiding requiring a driver to drive across town just for a pickup. This is a major advantage over traditional taxi services in moderately-sized cities.

In the early days, there weren’t a whole lot of rides to be had, and sometimes I would have to drive 8-10 miles for a pickup, and the passengers would only be going a mile or so down the road. But because Uber needed for there to be some level of coverage throughout the area, they ran driver promotions that would pay up to $20 or more per hour guaranteed, as long as the driver stayed logged on and performed an average of one trip per hour. That lasted a few months, as Uber ridership began to grow.

In this aforementioned touristy area, lots of trips begin or end at the airport. Again in the early days, this was not a problem. We would sit in the cell phone lot and wait for a ride request to pop up. But as more drivers came along, the “game” became more competitive. Some drivers would figure out a location to park their car where they were slightly closer to the terminal for the ride request to ping them instead of the other drivers in the cell phone lot, but those locations were remote; sometimes a 15-minute drive from the terminal, which I thought was excessive to make our passengers wait that long.

I was only driving part-time, usually just Friday and Saturday nights for 4-5 hours, and I was easily bringing in $200-300 every weekend. It was much slower in the summer months because that is our rainy season, coinciding with the Atlantic Hurricane Season, so tourists don’t flock to this area in the summer months. Still, there were plenty of people beginning to use Uber to go to/from bars and the beach, especially on holiday weekends (Memorial Day, Independence Day, Labor Day weekends) so I had a slow but steady bit of business coming in.

I also seemed to do better than most drivers in terms of my driver rating and in tips. Drivers and passengers each have the opportunity to rate each other, which provides for accountability for both parties. You can’t be an awful driver and last very long on the system, because your passengers will report you to Uber. Conversely, you can’t be an annoying, loud, obnoxious, or messy passenger very often, or you will have trouble getting drivers to accept your ride requests from a 3.2 out of 5.0 star rider. I was never very good at small-talk until I was driving every weekend for Uber. Most people appreciated my knowledge of the area, or recommendations for restaurants, site-seeing or golf. It also helped that I am a single guy driving a BMW, which I kept meticulously clean. It compared well against other Uber cars, which doubled as family cars when not in service with Uber. Despite it being a 2007, I was constantly being asked if it was new, even up until a few months before I traded it in for my current car in August 2017.

I continued to push harder and harder with my Uber side hustle, but the income was limited by the amount of business in a given area at any given time, divided by the number of other drivers online and available in those areas. Because of the way the GPS-based system worked, there was no way to differentiate myself as a top driver that passengers could request in lieu of the straight-up-gambling option in the app. But one time, I had a sweet old lady of 75 years of age, who asked me for my business card so that she could contact me directly whenever she needed a safe ride to the doctor’s office, airport, or to a restaurant or wine bar. I was ashamed to admit that I didn’t have business cards for my side hustle, since I only operated on the Uber app, and it was all random. She explained that at her age and condition, she didn’t want to just trust anybody, and she has her own driver in every city where she travels and has a home. She gave me $10 and said “go to Vistaprint and get 500 cards for $9.99” so I did that and have turned her $10 into more than a few thousand by offering scheduled pickups for airport pick-ups and drop-offs. This was finally one area where I could differentiate myself from other drivers, providing a private car service with a well-groomed driver and a clean BMW sedan.

Everything was going well (except my sleep schedule on the weekend) but there was still a limit on how much I could make. And I would go through periods of being completely burnt out…

Part 2 – The downsides of Uber

Part 3 – Why I’m done with Uber

The downsides of Uber

By Jover March 9, 2018

[This is Part 2 of a 3-part series on my first side hustle. If you missed Part 1 about why I loved Uber when I got started, go back and read it here. Part 3 will be linked at the bottom.]

Throughout the first couple years (out of the 3 years that I drove Uber), I felt like I was making a steady little sum of money in my free time. It definitely wasn’t enough to get rich off of, but there were times when I would make enough to live off of the Uber money (and tips) that I could save my entire day-job paycheck. There were even a few times that I brought in enough in 1 week to pay my monthly mortgage payment!!

But all good things come to an end, and sometimes abruptly! In a side hustle like Uber, you have to have a reliable set of wheels. BMWs are known for durability, but they are probably even better known for how FREAKING EXPENSIVE they are to maintain. A set of new tires would cost $900+, same for brakes & calipers, and I don’t even want to think about the cost of the electronic water pump and those $110 oil changes. Several times, I had belts or hoses that would get all wonky, and those fixes were never cheap and rarely fast.

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Besides all of the cash flowing into the pockets of mechanics and the BMW dealership, cash seemed to be flowing out into thin air. By this I mean my poor depreciating car value. When’s the last time you ever drove 1400 miles in a week and NEVER LEFT YOUR COUNTY?? While 1400 was on the high end, I was averaging 1000+ miles a week and not leaving a 2-county area. All of those miles piled up quickly on the BMW, quickly racing from around 94,000 when I started driving Uber, all the way to 156,270 when I traded it in. Despite paying $20,000 for the car (used, I was the third owner at 55,000 miles), it dropped in trade-in value down to $500. The main reason for the low-ball trade-in value was that the air conditioner (compressor AND coils) needed a complete replacement, since I live in Southwest Florida and this was AUGUST when the whole thing went kaput! Unless you enjoy a sauna on wheels, you cannot drive a car with no A/C in the summer in South Florida, and don’t even think about putting it into service with a rideshare app like Uber. Effectively, my car was totaled when the A/C went out, because the repair was going to be nearly $3,800 while the KBB.com value was $3,400. The dealership was nice to me and bumped up their $500 offer to $1,000, which saved me a bit on sales tax.

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So I bought a new-to-me car in August of 2017, a 2015 Toyota Camry Hybrid SE that I financed for 4 years at 5.2%. They could have told me 20% but it wouldn’t have mattered much, because I was determined to pay it off ASAP. I put this car into service with Uber immediately, and watched my odometer race up from 41,547 to 53,064 in 4 short months. This was even shorter than you might think, because Hurricane Irma impacted this area on September 10, 2017, and I did not drive for about 10 days. One major benefit of this car was the hybrid motor, which allowed me to average 41.5 miles per gallon. Fuel costs are of utmost importance to Uber drivers, especially those like me who put 11.5k miles on their car in under 4 months 😉 Another benefit was that it was new enough and at a high-enough trim level to qualify for Uber Select. I averaged a couple Select rides per week, which pay approximately double the amount of UberX (low-cost option) rides, and the Select passengers were much more likely to tip, as well. UberX is basically the taxi equivalent at 40% of the local taxi company price. Uber Select fares are comparable to taxi rates, but you get the benefit of a newer, nicer ride and a driver that’s a regular person instead of [insert stereotypical image in your mind of a taxi driver].

I pushed very hard those first 3 months after buying my car, because I really wanted to pay off that car loan. Between August 14 and December 12, I completed $5026.29 (after Uber’s cut) on the Uber platform, and $1990.29 in cash rides and tips (after Square card reader fees). Coupled with some money I had saved while driving my previous car, I paid off the $15,000 car in just 86 days! A huge weight was off of my shoulders, but I lost the drive to keep driving.

Part 3 – Why I’m done with Uber

Why I’m done with Uber

By Jover March 9, 2018

[This is Part 3 of a 3-part series on my first side hustle – Uber Driver. If you missed them, go back and check out Part 1 and Part 2]

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As I documented in Part 1 of this series, my main side-hustle is being an UberX driver on nights and weekends. At the time of this writing, I have completed 2,538 trips on the Uber platform, and maintain a 4.92 driver rating. I used to drive a 2007 BMW 525i, and nearly half of my passengers first comments were always something like “I can’t believe we got a BMW” or “Is this thing new?” I’m sure that at least some of the tips I have received are due to having a nicer ride than some Honda or Kia (sorry Honda and Kia Uber drivers, but nobody gets excited about your car when you show up). I now drive a 2015 Toyota Camry Hybrid SE that qualifies for Uber Select, but half of people cancel the Select requests when they see Camry, not knowing it’s actually quite nice.

A major downside of driving for Uber is clearly the expense to maintain my car. The BMW ran on premium fuel, so even though gas prices are in the $2.40/gallon range locally, I would be paying $2.90 per gallon. Expensive maintenance and rapid depreciation were also discussed in Part 2.

I neglected to mention the “grand prize” that some drivers would talk about when we’d sit together at the airport waiting on rides. I use quotation marks on that prize, because it is definitely not the kind of thing you want to win, because it’s the “sick passenger” award. Usually some 20-something, intoxicated passenger, late on a Thursday, Friday or Saturday night, would come stumbling to your car and you decide to chance it. Most times you get lucky, but sometimes you win the opportunity to clean up a mess left by a complete stranger. Don’t forget to take pictures first, because those can be worth up to $200 when you send them to Uber to assess a cleaning fee. I was awarded the $200 cleaning fee 3 times in my BMW, but avoided those situations in year 3 with the Camry.

As I mentioned, I drive in Southwest Florida. This is a busy tourist destination from Thanksgiving to Easter, with our warm sunny beaches providing respite from cold Northern winters for millions of visitors each year. Between shuttling people to and from the airport, many trips are completed taking our tourist friends to area shopping and dining establishments, and the occasional bar or concert. Unfortunately, with the passing of Easter each Spring, the roads begin to clear up, fewer flights arrive each day, and our rainy season arrives on schedule each June. Fewer tourists mean fewer paid rides, meanwhile Uber continued to sign up new drivers as the demand waned. It was not uncommon to see hundreds of cars online, waiting for ride requests, on a Friday or Saturday night.

In addition to fewer rides, Uber also undercut the pay for its own drivers by 21% in the Fall of 2015. Just as the busy tourist season was about to begin, the per-mile rate in my market went from $1.20 to $0.95. They didn’t bother to consider that UberX rates were already 50% of the local taxi fares, Uber wanted to cut the rate further. Remember that every mile spent driving back from a drop-off is wasted fuel and time for the driver. The only way for these prices to make any sense would be for trips to be so bountiful that a driver could pick up another passenger soon after dropping off the previous one, and preferably near the same spot.

Before the two items listed above took place, I used to be able to make $500-700 per week (on the side) and $100-150 in tips. Later on, I would earn $100-175 a week and $20 in tips, if I was lucky. It’s hard to continue to pay for regular car washes, detailing, air fresheners, etc. when those costs remained constant, but my fare income had dropped by 80%.

It became difficult to rely on driving for Uber as a reliable side income, let alone sole income for many of my Uber buddies who took it on as a full-time gig. There were drivers in my area driving 2 hours north every day to drive in the Tampa/St. Petersburg area and then driving 2 hours back to Fort Myers/Naples in order to make a living. That seems like an awful lot of unnecessary wear and tear and fuel spent to get up there and back each day. To make things worse, there were drivers from Miami and Fort Lauderdale who would drive to our area, because our fares were slightly higher and they found Fort Myers/Naples to be more plentiful in rides. So much waste involved in all of this!

I probably don’t even need to mention all of the terrible headlines that Uber (corporate) made in 2017. Things got so bad that the founder and CEO got tossed. I received constant questions from passengers about what was going on in the company, and all I could say was that “I don’t really know, we’re all just independent contractors” and try to change the subject. Those fools in corporate were making millions of dollars, while us chumps who actually bring in the revenue were making $100s. I was not a happy camper.

With all of these Uber headaches, I shut it down for good on December 12, 2017. Despite not driving for Uber any longer, I have continued to drive my private clientele who contact me directly, or private car service for other drivers when they are double-booked. I’ve also, hilariously, continued to receive Referral fees from Uber, $5 at a time, twice so far this year. So I’ve still made $547 so far this year and have spent considerably less than that in gas and maintenance. But I only do it when my schedule is free, instead of allowing Uber to become my default option for any and all spare time. I’m happy to be in a position of owning a paid-off car with 55,000 miles and many, many years of life left. I don’t want to push this thing too hard and have to jump back into the car-buying business anytime soon.

Financial products I use

By Josh March 4, 2018 but will be maintained periodically

[Caution: Many of the links below are referral links. They will not cost you anything extra, but I may earn some commission ($$ or travel points) if you click them and sign up for the products that I use and love!]

Banking:

JPMorgan Chase – I signed up in November 2016 and was awarded a $300 bonus for opening a Chase Total Checking account. I avoided monthly fees by maintaining at least $1500 daily balance. I also signed up recently for a Chase Business Checking account for my side hustle, to keep my business and personal finances separate. I got a free $300 for that, as well.

Charles Schwab High-Yield Checking: I signed up in February 2018 to receive a $100 bonus. This required me to also open a Charles Schwab brokerage account, with a minimum of $1,000 balance. The AWESOME thing about Charles Schwab bank is they refund ALL ATM FEES, including FOREIGN ATMs, which makes this a must-have for world travelers. The account also pays 0.20% interest, which is very high for a checking account.

Fifth-Third Bank: I signed up in February 2018 to receive a $200 bonus for depositing $500 for a minimum of 60 days. I actually put $1500 into the account to avoid an $11/month fee. Fifth-Third is based in the Midwest, but they have a lot of branches here in Southwest Florida, so it made sense for me to open an account with them for the benefit of their brick & mortar locations. I also had my car loan with them in August 2017-November 2017, so I already had my online account set up with them, which made for a very easy sign-up.

Hancock Whitney Bank (Obscure): I signed up in January 2018 to earn a $300 bonus on a $250 minimum account balance. The offer required using the account’s debit card at least 5 times, so I deposited a total of $300 to allow for up to $50 worth of spending on the debit card. I signed up online when I thought my job was going to be transferred to Tallahassee (400 miles away), but I recently found they have branches as far south as Sarasota, so closer to 75 miles away from me. I’ll still likely close this account in the fall, since my job did NOT get moved to Tallahassee, and I actually took a new job in May 2018 closer to home.

Credit Cards:

Chase Sapphire Reserve (This card has a $450 annual fee, but many people find it is more than worth it, based on the benefits). Don’t let the $450 annual fee scare you, since it offers an annual $300 travel credit that offsets 2/3 of that fee. Other benefits include Priority Pass Select membership that allows you to use over 1000 airport lounges around the world, free Global Entry or TSA Pre-check ($100 or $85 value), primary rental car insurance, excellent travel insurance and price protection coverage that come with all Visa Infinite cards. Earns Ultimate Rewards that are worth 1.5c each in the Chase Ultimate Rewards Travel portal. 3x earning on Travel and Dining expenses, with 1x on everything else.

Chase Freedom – no annual fee card that earns 5% cashback on a difference spending category every quarter, up to $1,500 per quarter ($75 cashback).

Chase Freedom Unlimited – no annual fee card that earns 1.5% cashback on every purchase, every time. This is a great card to use for any spending that is not covered by a bonus category on another card. Pair this card with a Chase Sapphire (Preferred or Reserve) to make the cashback value worth more (1.25x or 1.5x).

Southwest Rapid Rewards Premier – This card ($99 annual fee) is also from Chase, and earns Rapid Rewards for free flights on Southwest Airlines. The sign-up bonus changes throughout the year, from a low of 40,000 points to 60,000 points. They also have a Plus card and a business version, and some people sign up for 2 cards back-to-back to earn the minimum of 110,000 points required for the Southwest Companion Pass, which allows a companion to fly FREE (only pay September 11th security fee of $5.60 each way) for the remainder of the calendar year in which you earn the Companion Pass, AND ALL OF THE NEXT YEAR! Woo hoo free flights!

Starwood Preferred Guest by American Express – This card and hotel program may seem obscure at first, but the program is excellent! Starwood and Marriott are completing a merger soon, which converts all Starpoints into 3 Marriott Reward points, and you can redeem these points at over 10,000 hotels worldwide. In addition, points are transferrable to several airline programs at attractive rates, including a bonus of 5,000 points when you transfer in increments of 20,000. There’s currently an excellent redemption offer through Marriott where you can purchase a 7-night stay and earn 120,000 or 132,000 airline points from several of your choosing, but those offers are getting more expensive on August 1, 2018.

Hyatt card: The main perk of this credit card is that for an annual fee of $75, you get a free night certificate, good for any Category 1-4 Hyatt hotel. For example, you could get one night at the Hyatt Regency Dusseldorf (in Germany), that has nightly rates up to $1,598, or $605/night on average. The card also comes with a sign-up bonus of 40,000 points, which could be used for up to 8 nights at a 5,000/night Hyatt hotel, but a more common redemption would be 2 nights at 20,000 points each. You can get this card AFTER 5/24 status with Chase.

IHG Card: IHG or InterContinental Hotels Group is a large chain that includes Holiday Inn, Holiday Inn Express, Crowne Plaza, Hotel Indigo, InterContinental, Staybridge Suites, Candlewood Suites, Even, avid, and Kimpton, among others. The major pluses on this card are the ability to get it AFTER 5/24 status with Chase, and a free night certificate for any property in exchange for the $89 annual fee. Also comes with Platinum Elite benefits as long as you hold the card.

Investment accounts:

Vanguard – because most of the funds you want to buy are Vanguard funds anyway. Why pay some middle-man when you can invest directly with them? I’m all about the VTSAX (Total stock market index fund – Admiral Shares) with 0.04% fees.

Betterment – I used Betterment for a few years while I was slowly building up my account balances and wanted their globally-diversified set of 12 index funds, balanced however you choose between stocks and bonds (I did 90/10). But once I decided to take a more active role in my investments, it didn’t make sense to pay 0.25% to Betterment when I could get the same funds for 84% lower fees with Vanguard. But it’s a great place for beginners!

Charles Schwab – One of the requirements of my High Yield Checking account with Schwab was that I set up a brokerage account with a minimum of $1000. Trading fees are $4.95, which is better than other brokerages I have used in the past (almost a decade ago, though).

Fidelity – I just signed up for this one this week, for a $200 bonus offer. Fidelity, Schwab and Vanguard are the three titans of the low-cost investing world. Now I have some money with all 3.