Make Money by Buying Money

The month of February I'll be offering a money-making tip every weekday. Here's the one for today:

Make money by buying money.

I first talked about this idea a few months ago. Basically, it goes like this:

• Order $250 or $500 in presidential dollar coins.
• Pay with your cash rewards credit card.
• Deposit the money at your bank (or use it yourself).
• Pay your credit card bill with the money at your bank.
• Get your cashback from your credit card.

The US Mint has free shipping on these items, so there's no extra expense involved. If you buy $250 in coins, you get $250 in coins. No shipping, no handling, no added cost.

I started doing this late last year and so far have purchased $2,750 in gold, $1 presidential coins. I paid for them all with my Blue Cash® from American Express card which, at that point, was at the 1.5% earning level for "all other" purchases. So I made an extra $41.25 for doing not much at all (ordering coins from a website.) Easy money, huh?

Another way to use these coins is to help you quickly get to the $6,500 tier 2 level of rewards for the Blue Cash® from American Express card. After all, the faster you get there, the more you can earn with it.

Now, the only issue is what to do with the coins. I haven't cashed any at the bank, but I may do so. It seems like it would be easy to do since they come pre-wrapped in $25 rolls. Instead, I've used my coins in a variety of ways so far (and coming up with more ideas every day.) That said, I don't think I'll be able to use them all as fast as I need to, so I am likely off to the bank soon to deposit a bunch.

Comments

[Fidelity Select Fundranker]

As you go through the checkout steps at the U.S. Mint website, they make it look like standard shipping is $4.95. Click on through and you'll see that shipping is free.

[Matt]

Sounds good except there is one problem for me. My bank charges a 4% fee on all rolled coins. With that fee, I would lose a lot of the benefit.

[Broke Wall Streeter]

While I am all for making money, I don't think this is a good idea. The packaging material used to ship the coins and the fuel to transport it through our mail system creates waste and causes more foreign fuel usage. Also, I'm guessing the free shipping is somehow subsidized by the Federal government using our tax dollars, so we may all be paying for your money-making opportunity.

[Jim]

I bet the federal government can easily cover shipping costs out of the taxes that FMF paid himself.

[My Life ROI]

Curious... is there anything stopping you from just buying a full $6,500 on January 1st to ensure you are in Tier 2 for the rest of the year with the AmEx?

[FMF]

Jim --

You are so right -- unfortunately. :-)

My Life --

There is a limit on how many you can get with free shipping -- I think it's two boxes.

[Rich]

Matt, your bank charges 4% fee for rolled coins? I've never heard of a bank doing that. I guess banks are just looking for one more way to tack on fees to make money. What's next $3 per check deposit?

Anyway, it's a great idea to make a little rewards money, but something tells me the tellers will give me a dirty look when I bring 500 dollar coins to deposit lol. How much would that even weigh? A roll or quarters seems heavy to me!

It's also a great way to get dollar coins into the system, but so many people hate them. I cannot wait for the day when physical money is gone and it's a cashless society.

[aa]

$40...... I thought you were planning to say a $100+ profit...

Duh! (I need to say this even I didn't want to)

[Me]

I hope you aren't passing the obsessive nature of collecting money onto your kids. It seems like a sickness at the level you are wasting your time to earn a pittance (only to waste it at a church.)

[FMF]

Me --

I sure am. Next week the kids and I plan to go dumpster diving in hopes of finding a penny or two at the bottom of a sickening pile of disease-infested trash. Hey, it's free money after all right?

Then we plan to waste it all by doing something really crazy -- like giving it to our church's food pantry to feed the poor and homeless. Wow, we sure can pour money down a drain!!!

[Paul Morales]

That's a decent income for the amount of time you put in. I think the value of gold is increasing too.

[James]

I just did a rough crunch of numbers, but if you buy 2 boxes each month($500) and you have that money deposited into your HSBC direct online savings 2.25%APY, and you buy it with Chase Freedom which you can get rewards. You can make up to $260 a year with it. 3% of $6700 = $200, but chase offers an extra $50 if you save $200, so you'll actually get $250. So:
You need to spend $6700 on Chase credit card to get $250 reward.
You'll buy
12months*$500=$6000 (So you just need to spend another $700 to qualify or another month and a half, I use only chase freedom, so $700 is easy for me to spend)
12months of interest from $500 is $11.13 at a 2.25%APY
So you'll end up getting $250+11=$261 in a year for doing almost nothing besides buying it, depositing it and paying off that CC, not a bad deal.

If S&H is free great, otherwise a years worth of shipping is $59.40 so you'll still get $200. Maybe it's a lot to get an extra $21 a month, but hey, it's free.

[Shaun]

...okay, this is downright exciting. I'll buy a couple of boxes. Sounds like a fun way to make 20 bucks. :)

[John]

what prevents people from repeatedly doing this and earning cashback on their cashback...? why invest your money when you can guarantee money?

[Jscott1000]

Actually you can buy up to 12 boxes at a time...

they limit you to 2 boxes OF A PARTICULAR TYPE DOLLAR COIN. At present there are 6 different designs on the US Mint website.

My credit union will accept up to $200 in coins without a fee. Not sure about rolled coins, but by circulating the coins you are performing a service for the mint and that is what they want.