Cash Back Ideas

I believe leverage is one of the most important skills to master for anyone serious about building wealth.  The most significant thing I’ve noticed about the wealthy people I know is that they are all masters at using leverage.  So, what is leverage anyway?  Let’s start out by looking at what Wikipedia has to say about a lever.  Wikipedia defines a lever as “a rigid object that is used with an appropriate fulcrum or pivot point to multiply the mechanical force that can be applied to another object.”

What I love about that definition is the part on the multiplication of force.  What a lever allows someone to do is to multiply their power beyond what they could normally produce solely by themselves.  Above all else that multi-millionaires good at, they excel at knowing how to multiply their power.  When it comes to creating wealth, power multiplication (i.e., leverage) comes in three basic flavors: continue

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I was doing some reading over at MSN’s Money Central and I ran across this article by Liz Pulliam Weston.  Liz talks about some of the best rewards credit cards, but that’s not what prompted me to write this post.  Instead, it was this comment in particular that got my attention:

“Deadbeat” is the credit card industry’s code word for people who pay their balances in full every month.

As readers of my tutorial on free money know, I am a staunch supporter of paying off balances in full every month.  So as the saying goes, “if the shoe fits…”

In all seriousness though, Liz’s article is a great overview of the various rewards cards out there.  In the cash back credit card category, she recommends the Amex Blue Cash and the Chase Freedom credit cards. I agree completely.  In fact, I would go so far as to say these two cards are the best ones to use period.

What do you think?  What’s the rewards credit card you use and why?

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Yep, that’s right.  I have no intention of paying off this debt any time soon. For all I care, the bank I’m indebted to can continue to milk me for interest for many more years to come.

The above statements may sound a bit insane, but don’t call the asylum truck on me just yet.  Now that I have your attention, I’d like to elaborate more on why I would say such craziness.

To illustrate the rationale here, allow me to start with a simple example.  As I elaborate in my tutorial on free money, you can make money by putting all your purchases on a cash back credit card.  By paying off your credit card off in full, the bank is effectively giving you a renewable 0% loan each month.  So while you’re using the credit card bank’s money for 30 days, your money is busy earning you 3.50% APY interest in an online savings account.   So each month, you’re borrowing money at 0% to make a 3.50% APY return.  This strategy is a form of leverage and is the model upon which banks are based — using money at one rate to earn a higher return on that money somewhere else.  The difference is profit.

In my case, I borrowed $24,000 a couple years ago to purchase an income-producing asset.  That investment now produces monthly revenue of $670 and is still growing.  The debt costs me $85 a month.  After debt service is paid, this asset cash flows $585 per month.  This is a passive income stream I would not have otherwise had without borrowing the money, because at the time I didn’t have $24K in uncommitted cash just laying around looking for something to do.

On a future post I’ll talk about the particulars of this investment, however to keep things on topic, there are a couple points I want to highlight here: continue

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It’s been a busy couple days for me.  I just finished implementing a new blog theme and catching up on my personal finance blog reading, which I had been neglecting for a few weeks.  It turns out I’m not the only one who’s been busy, as other bloggers have been hard at work writing some great posts.  Here are my favorites from the past week:

• Passive Income Idea and Affiliate Marketing Idea - The Passive Dad talks about a site he’s been using called BigCrumbs.  He’s having some success in starting a little passive income stream with it.  He reports that some members are earning $100 - $200 a month in passive income from the service.  Not too shabby.  Hmmm… I wonder if BigCrumbs would be better than Spree?  Especially if you do any buying or selling on eBay, this appears to be something worth a second look.  I signed up for an account today, and I’ll do some more digging into it.  I’ll report back after I’ve kicked the tires a bit more with it.
• Creating a New Income Stream - General Electric - Passive Family Income talks about buying GE, which is a dividend-paying stock, and hedging his bets using a covered calls strategy.  Interesting… I hadn’t heard of this strategy before.  I’m curious to learn more about it and his success with it.
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  Categories : Ways to Make Passive Income

When I started this site back in early 2006, it was just a place to offer rebates on the products I believe in and promote in my affiliate marketing campaigns. Since then, this site has morphed and grown a few times: from an online tutorial on cash back credit cards, to a blog where all things related to passive income can be discussed.

Even when this site became a blog, it was still effectively just a hobby for me when I wasn’t busy with other things.  I love blogs as creative outlets for people’s passions, but I have been reluctant to regard them as ways to create significant passive income, as they take a decent amount of personal involvement to keep them going.

I continue however to have an open mind about blogging for generating passive income.  I’ve learned a few approaches from Yaro Starak and other pro bloggers which have me encouraged that blogs may yet be catalysts for creating and growing passive income streams.  Armed with this information, it’s time to put these approaches to the test.  This blog will now also serve as a living experiment on ways passive income can be created from blogging.  As I validate strategies that work in creating passive income, I’ll of course share them with you.

The first step of this new experiment was to introduce a new theme.  The result of which you see here.  The layout of my old blog theme did not lend itself well to some common blog monetization approaches, so that had to change to allow the other parts of this experiment to take shape.

So what do you think of the new theme?  Likes?  Dislikes?  Sound off below.

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This carnival is relatively new, but sorely needed.  I was going to start a carnival similar to this myself, so I was glad to see when Living Off Dividends got it going.

My favorite post was “How Passive Is Your Passive Income” from the carnival’s host. In this post, he makes a good point that the passivity of his online income is not exactly passive:

I’ve been lumping in my online income with my passive income, but it isn’t really passive. It may not be very strenuous and it gives me geographic flexibility and I don’t have to show up for work every day, but there is some effort involved.

The same is true for me, with some limited exceptions, where I have some affiliate programs that offer residual commissions.  I also like the fact that my online income gives me a lot of flexibility over my working schedule, and I can even take a few days off if I so chose without much impact.  If I gave it some thought, I could probably outsource and systematize some of what I’m doing to make things a little more passive.  That reminds me, if you haven’t read Tim Ferriss’ book, The Four Hour Work Week, I highly recommend it.

My entry into this carnival was “5 Reasons You Should Be Creating a Passive Income“, which describes why I believe building passive income streams are so important.

Check out the entire Carnival of Dividends & Passive Income here.

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Well, it’s been about a year since I opened my FNBO Direct account. Although I was initially apprehensive about FNBO Direct, I am happy to say that I have now come to trust FNBO and can recommend their online savings account to others.

My initial concern stemmed from an e-mail I received soon after I opened my account. That e-mail stated I needed to verify some personal information or risk my account being closed. That e-mail was followed-up with second one stating the first was in error, however the ding to my confidence in their operations had already been done.

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In the previous post, I talked about why creating passive income streams are so important. Now that we’ve covered the benefits of this form of income, let’s start the conversation on ways it can be created.

What’s below is a list of different kinds of passive income streams. This list is by no means exhaustive, but it will work for starters. As you read the list, make a note of which ones catch your interest. Here they are in no particular order: continue

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It wasn’t so long ago that managing my personal finances was just another boring fact-of-life that had to be done. Once I discovered the benefits of passive income though, finding and creating passive income streams became one of my primary passions in life.

The more I acquire and build passive income money machines, the more convinced I become that creating them is something that everyone needs to be doing. I believe that passive income can truly transform people’s lives. In this post, I hope to share why I feel so strongly about that and return the favor for what my mentors have taught me.

What’s below are my top 5 reasons why I believe it is critical to develop multiple sources of passive income for yourself:

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When my Discover platinum card recently renewed, I received a bright, shiny replacement card for it. Something more had changed though… my card’s logo and terms were different. I had been switched to a Discover More card.

Intrigued by what “more” could mean, I journeyed over to their website to find out. After logging into my Discover account and poking around a bit, I got a feel for what my new Discover More card had to offer. In this post, I’ll explore the highlights of what I learned and how this card compares to the other cash back credit cards available. Without further ado, let’s dive in …

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