Free Money Finance

A Great Money Question

Here's a great money question (preceded by a fill-in-the-blank statement) from page 209 of The Secret Language of Money: How to Make Smarter Financial Decisions and Live a Richer Life:

1. My current annual income is $_________________

2. In order to ensure happiness and contentment financially, with no more money problems and worries, my annual income would need to be $_______________

A few thoughts on this:

1. I think it's a great question (or exercise if you prefer -- I guess it's not technically a question) because it's very thought-provoking IMO. If you're not happy with what you make now, what amount will make you happy? Or will making more ever make you happy?

2. Of course, we all know people (and I write about them often) who make more only to spend it all -- and they are no better off (and not happier either.) So is income the real issue here?

3. For me, I'm way past the "happiness" level of income. Sure, I'd prefer earning $10 million a year (I could do this for three months and then retire), but realistically I am completely happy with my level of income.

4. If you're not happy with what you make, what are you doing to close the gap? Maybe you're working on growing your career or perhaps earning some more money on the side?

So, after looking at the above, is there a gap between what you earn and what you'd like to earn? If so, how big is it and what are you doing to close the gap?

How to Make a Ba-Zillion Dollars: Become a College Football Coach

I LOVE football! I love college football (too bad Michigan's looking sorry), pro football (go Colts! Too bad the Patriots are doing so well!), and I've even been known to watch arena football (Griffins!) on occasion when I need an off-season fix (BTW, arena football games are a blast to go to -- I'd recommend you do so if you ever get the chance.) So when I come upon a football-and-money-related article, I simply HAVE to write something about it.

Sports Business Radio (they have a great podcast, BTW, if you love the business side of sports) points to a USA Today article on the salaries of college football coaches. Let's start with the highest paid coaches:

Four coaches — Oklahoma's Bob Stoops, Alabama's Nick Saban, Florida's Urban Meyer and Iowa's Kirk Ferentz — already have cracked the $3 million mark, leading a spiral that shows no sign of slowing.

The piece also notes that LSU's Les Miles is likely soon to be in the $3 million club. Nice, huh?

But it's not only the big boys who are doing well:

This year, for the first time, the average earnings of the 120 major-college football coaches hit $1 million, a USA TODAY analysis finds. That's not counting the benefits, perks and myriad bonuses in their contracts.

At least 50 coaches are making seven figures, seven more than a year ago. At least a dozen are pulling down $2 million or more, up from nine in 2006. Last season, Stoops was the only one making more than $3 million.

The piece doesn't say, but I know "benefits, perks and myriad bonuses" can add up to really big bucks as well -- so these guys are making a fortune!!! How can this be? The rationale:

It's an investment, school officials say, in the health of a sport that's the revenue-generating backbone of most major-college athletics programs. Successful teams pump up ticket sales and prices, television rights fees, marketing revenue, donations and even applications for admission to the universities.

At LSU, a football team that finished 11-2 and ranked No. 3 in 2006 accounted for 63% of the school's athletics revenue for the year. It also accounted for a lion's share of the spending — more than $16 million — but turned an almost $32 million profit that helped underwrite the school's non-moneymaking sports.

Yep, major college football is a huge money-maker. So what if you have to pay $3 million for a coach? If you make $32 million as a result, it's a good deal, right? Sure, LSU would have made some money even if their team didn't do well, but probably not nearly as much. As such, you could easily argue that Miles has earned his salary and that it's been a good investment for the college.

So what happens to all the football profits? They help to fund other sports that don't pay for themselves -- water polo, fencing, tennis, etc. Still, football and basketball don't make enough to cover the costs of all the other sports:

The NCAA's latest data shows that more than four of every five major-college sports programs need institutional subsidies, student fees and other supplements to balance their budgets.

And finally, a comparison between what the football coaches make and the median salaries of college presidents:

College presidents' pay typically pales in comparison. Median total compensation for 182 presidents and chancellors of public research universities and university systems was a little more than $397,000 annually.

Yeah, but then again there are more people who can do what a college president can. It's all about supply and demand.

Now, should I move on to how much money they'd all generate if the major colleges instituted a playoff system? ;-)

Make Money by Becoming a Lifestyle Manager

At first, I was going to file this under the "you've got to be kidding me" label, but after thinking about it, I'm putting it into my "making money" category. After all, we're working towards that extra $10k in income and if someone wants to pay us a bundle to do their chores, we're up for it, right?

Here are the details. There's this new "profession" of people called lifestyle managers. For a fee, they'll run your errands or do whatever else you're too busy to do. Like what, you ask? Here's a brief list from the Washington Post:

Lifestyle managers have searched for a reliable used car for a client's 16-year-old or taken over their scrapbooking project. One wrote an online dating profile for a client. Others have negotiated overseas adoptions or bailed their clients out of jail. Another was handed a brown paper bag full of insurance documents from a client's recent surgery with the command to sort it out. 

So, how much can someone make doing this? Pretty good money:

These hired hands...charge a monthly membership fee or up to $100 an hour.

And here's an excerpt I just couldn't leave out:

One of Glass's employees flew a dog to Colorado so it could spend a summer with his family in Aspen, Colo. Other helpers changed the TV channel daily at one client's house; her beagle liked the Animal Planet network, but the client didn't want the dog watching its more troubling animal-rescue shows.

This made me laugh as well:

She has gone so far as to complete homey projects like scrapbooks for clients too stressed out to do the hobbies that once calmed them.

Ok, a few thoughts here:

1. Has the world gone crazy or is it just me?

2. Ok, back on topic. From a buyer's standpoint, having one of these lifestyle managers isn't probably a good financial move unless you have both parents (or a single parent) making substantial incomes. Otherwise, by the time you pay all the expenses associated with working such as commuting, taxes, clothing, child care, and now a lifestyle manager, it's probably not worth the second spouse working unless he/she also has a decent salary.

3. From a money making standpoint, it looks rather easy. Even at "only" $50 an hour, it could be a good way to pick up some extra change. It's certainly not that far removed from other "unique" money making ideas like becoming a clown, a college advisor, or doing something no one else wants to do.

Make Extra Income by Teaching What You Know

Here's another great money making idea left as a comment on my post titled Use the Skills from Your Job to Make an Extra Income:

I've found that teaching can also be a good way to make some extra money. After finishing up my MBA last December, I started applying to local colleges about teaching night classes.

I started teaching some Economics courses at an ITT Tech campus. This was good experience, but the pay wasn't great. I figured it was a good stepping stone.

It turned out I was right. After about 3 classes, I got a call and offer from a 4-year school closer to home looking for a Quantitative Analysis instructor for their evening MBA program. This kind of class was right up my alley. Not only was it closer to home, but the pay was 2.5x as much!

So now, depending on the class schedule, I'm pulling in an extra $700 - $1000 per month for teaching 1 night per week. And trust me, teaching the same class the second time is much easier. Once you've prepared for the class a couple of times, it's gets to be pretty easy to prepare.

Holy cow, what a GREAT idea! And an extra $700 to $1,000 per month is pretty good.

Before you give me the "yeah, but I couldn't teach Quantitative Analysis" speech, let me say that you don't have to. If you simply know how to do something and can speak in front of people, you can teach courses on things like personal finances, growing roses, playing a sport, and so on. There are all sorts of colleges, community colleges, tech schools, etc. that all need teachers. Maybe one of them is you!

Got My Second Chase Freedom Card and an Extra $100

Just wanted to keep you all in the loop regarding my credit card strategy and my applications for two Chase Freedom Cash Visa Cards. Here's where we stand as of now:

1. I've owned and used the Blue Cash from American Express card for years. It earned me almost $500 last year.

2. This year, I discovered a new way to make more cash back on my credit card purchases. As such, I needed to get a Chase Freedom Cash Visa Card.

3. I applied and was approved for my first Chase card. I used it and reported my results.

4. I also noted that I'd received a mailing for a second Chase card with another $100 offer -- good when you make your first charge. (FYI, to my knowledge, this offer is only available via mail now in targeted mailings -- the best I've seen online is a $50 bonus.) I applied for a second card to get the $100 and wanted to see what happened. Some speculated that they wouldn't issue me a new card, but most weren't sure.

So last week I did get my second set of cards (one for me and one for my wife.) I called and activated them. Within the next couple of days, I'll be charging on one of them to be sure the clock gets ticking on my $100. And as far as redeeming them goes, I plan to use the first Chase Freedom Cash Visa Card for three of their bonus categories (3% level) until I get to $200 owed to me. At this point I'll redeem my cash as Chase will kick in an extra $50. At the same time, I plan to use the second Chase card on three other bonus categories until I get to $200. With this second card, I plan to set up automatic payments in certain categories -- I don't want to have to carry around/manage three cards.

That's it for now. Look for my net worth update later this month and I'll give more specifics on how much cash back I've earned so far this year.

Use the Skills from Your Job to Make an Extra Income

One of the things I'm doing this year to make an extra $10k is looking into consulting gigs. I'm trying to find a few side jobs where I can sell the skills I've learned in almost 20 years in the workforce. I'm starting to get some interest, and I'll fill you all in if/when I get a breakthrough.

In the meantime, here's the story of someone who did just what I'm talking about. It was left as a comment on a post I did for The Consumerist. Here's what the commenter had to say:

I'm a geek in the network operations center of a gov. agency.  I needed to make some extra money, and wanted to leverage my pc and network skills.  I was interested in getting into home/small business IT consulting on the side.  However, I didn't have the time or inclination to try to chase down customers.

Then I made a fortuitous discovery:  Lots of people are spending lots of money to wire up new and retrofit homes with high-end network infrastructure, but they have no idea how to actually hook up computers, network printers, routers, wireless, etc.  My neighbor was having his house gutted and rebuilt inside, and had the whole house wired for network connectivity.  I got in touch with the home theater/inside wiring company he was working with, and offered my services.

Now they bid me on their contracts as "IT Consulting."  They bring me in during design phase to determine requirements, then they do the work, then they call me when it's all done and tested, and I hook up PCs, printers, configure routers & wireless, and train the customer.  I can even sell the customer new gear, without any hassles of sales tax/merchant licenses, because the company I'm working with takes care of all of that.  The place where I really earn my $$$ (and differentiate myself from low-end Geek-squad types) is for customers who have complex hardware VPN/VoIP connections into their offices.  I've done a number of these setups, mostly for one big law firm here in town, and now their in-house IT department give my name out to employees who need someone to do the in-home integration.

It's a win/win.  The company gets to offer a more full-service product, and I get $100/hr with 2-hr minimum for every trip I make.  I do about one a week after work, and am pulling down about $500/month.

I've done this in the past and made some good money. I've attached myself to an agency of some sort and when they've needed a "marketing expert", they call me in. I'm now working on the same sort of thing, but with a different twist. Now I have an advertising/marketing firm who needs a "blogging expert." ;-)

As I said, I'll let you know how it goes for me, but the above example is a GREAT one of how you can take your daily skills and turn them into an extra income.

Save and Make Money All in One Step

My post titled The 10 Most-Hated Money Saving Tips certainly got a lot of great comments. But there's one that stood out to me that I feel needed to be shared with everyone. It addresses my most-hated money saving idea -- moving to a lower cost-of-living city. The comment:

I can understand #1 being the most-hated. We met with a lot of skepticism when we did just that.

But, we researched and found a town (in the same country) that met our criteria and had a very low cost of living but most importantly, had ridiculously cheap real estate. For us, it was the low cost of entry into the real estate market that sold us on our location. I mean, less than the price of a decked out minivan low.

We purchased one house three years before we were ready to actually move out there and rented it out. A couple of years later, a second one. After we moved out here (5 months ago) we've bought 3 more and are currently closing on #6 and #7. The rental income from these places alone is enough to live modestly, so very soon, we'll have no need for a job. So much for the "not being able to find work in a small town" objection, eh?

Finding a place with inexpensive houses allows us to easily diversify, and our 7 houses combined still costs less (maybe even 1/2) of a home in Toronto. The risk to our portfolio is considerably lower than putting all our eggs in one house. We describe our thinking and our process in our blog WeLiveHereNow.net

Strategy #1 has worked very well for us, and everyone we talk to says they think it's great, but they could never do it. I guess that's just more houses for us, then! :)

So they not only saved a bundle of money, but now they're making money to boot -- enough so they don't have to have "regular" jobs in the near future. I'd say that's a pretty good combination!

Is Prosper.com a Good Way to Earn Money?

I've always wondered about Prosper.com -- the site that connects borrowers and lenders -- and whether or not it was s good investment. For instance, if people were earning 15% on their money by lending it to others, maybe I would want to get in on the action with part of my portfolio.

MSNBC recently did a piece on Prosper and included was how much the lenders make. The details:

Each Prosper borrower is assigned a grade based on their credit score to help lenders evaluate their risk and the site verifies borrowers’ identities. The average rate of return for lenders is 9.28 percent, with lower-grade loans earning 10.45 percent, according to Prosper.

Prosper makes its money by charging a 1 percent or 2 percent closing fee, based on the borrower’s credit grade, and lenders pay an annual loan servicing fee of 0.5 percent to 1 percent. It also collects fees for late payments on behalf of lenders and reports to credit bureaus. After 30 days, a collections agency is assigned to delinquent loans.

Ok, so what's not clear here is whether or not the fees are deducted from the earnings in the numbers above (I'm assuming the 1-2% closing fee is paid for the borrower.) In the best case-scenario, lenders are earning 9.28% to 10.45% -- in the worst case (if the annual fees get deducted from these numbers) the results are about 1% lower.

Either way, it doesn't look like something I'm interested in for investment purposes. Yeah, there's the "read people's stories, get involved, and help them out" angle associated with Prosper, but I'm ignoring that. I'm looking at it as an investment and whether or not it's a good option for me. And to be a good option, I needs to beat my main investment of choice: index funds. But it doesn't. Here's why:

1. Stock index funds will average about 10% return over the long-term. That's roughly what Prosper loans earn too -- at best. It could be 1% lower. And we all know that over a couple decades, that 1% can make a really big difference in your total investment return.

2. The Prosper loans take a lot of time to select and manage -- at least more than index funds do. The latter are easy, especially when you set up your investments automatically.

3. Index funds seem less risky. It's not that stocks are without risk, but do I really want to lend money to someone who can't get a loan from a bank? Think about it -- people who do this professionally (bankers) have said this person is a bad risk. So why do I want to give them money.

I know I'll get some Prosper success stories in the comments. I'll hear how some people are making more than the numbers above, they've never had a default, and how it doesn't take much time to invest with Prosper. That's great for them. But to me, I have other options that I feel return as much or more, require less time to select and manage, and have much less risk. So why would I want to move my money from them into Prosper loans?

Reader Earns 26% More Cash Back with Chase Freedom Card

Here's a comment left on my post titled Update on My Chase Freedom Cash Visa Card:

FMF - I don't know if you saw my comment on a post last week, but just an update on my card as well...We charged about $2,300 on the card last month, which was higher than normal, but my total cash back earned was right around $34. I recomputed it using my old primary card, Citibank Platinum Dividend's rules, and the cash back would have only been $27. I earned a full $7, or 26% more with the Chase card.

Unfortunately I didn't get the $50 or $100 bonus since I already had a Chase card and just upgraded it.

All of our charges went to the proper bonus categories, as well. I was afraid they would promise all the bonus money, but then not categorize them correctly, but it appears it really works.

This is my experience so far too -- they're getting the categories right.

I've already received one extra bonus for my first Chase Freedom Cash Visa Card ($100 through a mail-in offer -- $50 is the best deal I can find online) and applied for a second one because they offered me another $100. We'll see if I get it or somehow get disqualified because I already have the card and received the first bonus. I'll let you know.

A Reader Endorses The American Express Blue Card

In my post titled American Express Blue Cash Card Named Among Top Cards by Money Magazine, I recently had this comment left:

I've used this card for 6 months and it has been great! I use the card for EVERYTHING. I do not carry a balance and will spend about 28k a year on it. It looks like I'll end with a REBATE of about $600 for the year. If I am going to spend the money, I might as well get something back for doing it. I don't view the $600 as "making money" - I view it as a rebate of the purchases I make. Nice card.

A few thoughts on this:

1. That's a 2.1% return, which is VERY good. He must have had substantial gas/grocery/drugstore charges once the card got past $6,500 in charges. At this level, g/g/d rebates are 5% and the cash back can really add up.

2. I've used the Blue Cash from American Express card for years and love it. However, next year I'm moving to a hybrid card strategy (using Amex Blue with the Chase Freedom Cash Visa Card) to try and maximize my cash back returns.

3. It's likely the reader could have earned more if he had applied a similar strategy. For details, see How You Can Earn Over 2.6% Cash Back by Using a Combination of the American Express Blue Cash and Chase Freedom Cash Visa Credit Cards.

Update on My Chase Freedom Cash Visa Card

As most of you know, I've applied for and received a Chase Freedom Cash Visa Card. I'll be using it as part of my two-card strategy to maximize cash back next year, and I wanted to give you an update on how my progress is going with the card. Here's what I have to add for now:

1. We made several test charges the past month to see how some stores showed up in the rebate levels. Specifically, we were wondering if Meijer (a superstore) would show up as a grocery store (eligible for 3% cash back) or a mass merchant (eligible for 1% cash back.) Good news! Our Meijer came in as a grocery store and we got 3% cash back on those charges! ;-)

2. Bad news: Walmart came back as a mass merchant -- we only get 1% cash back from them. This is what I expected as ours is not a Super Walmart.  So we'll use the Blue Cash from American Express card at Wally World.

3. My $100 bonus cash was credited to my account! Oh yeah! I got this offer through the mail ($100 cash back when you make your first purchase) and I haven't seen it online. The best I've seen on the Chase Freedom Cash Visa Card is $50 cash back now, which isn't bad at all.

4. A few days after we got our Chase Freedom Cash Visa Card, we got another mail offer to get a second Chase Freedom Cash Visa Card. Not sure if they got their system screwed up or if the mailings are just coming so fast that one part of the company isn't talking to another part of the company. Anyway, the second offer also contained the $100 cash back on first use promotion, so we signed up! We'll see if they allow us to get a second card. If they do, we'll charge once, get the $100 and probably retire the card. ;-)

Now Might Be a Great Time to Buy a Business

For those of you who are tired of working for someone else, here's an idea: how about buying an existing business and working for yourself? If you're up for the idea, the next several years could present a golden opportunity for you. Why? It appears that many businesses will be sold in the upcoming years -- and many at a discount from what they could have sold for in the past. The details:

With about 8,000 Americans turning 60 every day, more and more business owners are thinking about retiring. By 2009, an estimated 750,000 companies owned by boomers -- one in every six -- will be looking for buyers, up fifteen-fold from 2001.

A few other thoughts on how this will all play out:

• Most firms will sell to strangers -- Children today feel less pressure to run the family business, and even those that want to often find it tough to come up with the cash to pay off parents or other relatives who hold shares in the firm. Family in-fighting and prolonged legal spats also make family handoffs that much harder. Studies show that less than 15% of family businesses successfully make it down the third generation.

• Owners without an exit strategy will likely sell at a discount -- There will be fewer potential buyers, so a good price will be harder to find.

• One option that's growing more popular is selling to employees -- By either a management buyout or employee stock ownership plan (ESOP).

I've thought about buying an existing business in the past, and now doing so could be even more attractive. I'm putting this in my list of money making ideas and will start to get my feelers out there soon. Who knows, maybe I'll be my own employer in a few years.

Anyone else out there thinking the same thing? Or maybe someone has recently purchased a business?

Thoughts from My Car Dealership

Last Wednesday I took my car in for its 60,000-mile tune-up. I had several finance-related thoughts about the experience during the time I waited for the car and wanted to share them all with you. Here goes:

• I don't usually have my car worked on at the dealership since they are way over-priced. But for major work/tune-ups, I'd rather pay a bit more and have guys work on the car who really know the ins and outs of it (after all, they work on these cars all day, every day.) I also have a few other reasons I go to the dealership that I noted last year, most of which are still valid.

• Since my last visit, the dealership has upgraded. Instead of a lounge where you can hook up your own computer and get dial-up access, they now have the dealership's computer with high-speed internet access. Cool! I could do several blogging-related tasks while I waited. Yeah, they still had the option for me to dial-up my own computer, but why bother?

• During the tune-up, the manager came and told me my brakes were almost worn completely (95% or so) and asked if I wanted new ones (for both front and back) or wanted to get them elsewhere. If I got them here, it would be $425. Within 20-seconds, here's what went through my mind:

1. I do trust these guys -- I don't think they would tell me something like this if it weren't true.
2. I KNOW I can find a better deal on brakes somewhere else. I could probably save $100 or so versus their price.
3. How long will it take me to find a place to do my brakes? And to price shop? And to take my car in again? Maybe two hours at best. Probably more like four hours.
4. My car is here NOW. It can be done NOW for only maybe an extra hour's worth of waiting time. Even if I value my time at only $50 per hour (which I value it at more than that), I'll probably "save" $100 to $150 by having the work done here and right now.
5. If I get the brakes done now, I have a coupon that will give me $25 extra off the price.
6. I told him to do the work now.

• When I paid, my bill was $800. But I knocked it down a bit as follows:

• I had a coupon that gave me savings off different levels of spending at the dealership (I'm on their mailing list and they sent it to me.) The tune-up alone was going to get me $25 in savings, but adding the brake work bumped me up to the next savings level, so I got to save $50 off the work.

• I redeemed my last $100 rewards certificate from my Subaru Platinum MasterCard from Chase (for details on how/why I had this card, see What My Second Credit Card Does for Me.) I'm getting rid of this card in favor of the Chase Freedom Cash Visa Card since next year I'm looking to dramatically increase my cash back rewards. But I did use my one, last rewards certificate to knock $100 off the bill. And I timed it so it will leave me with no rewards accumulated on it.

• My final bill was $650 and I paid with my Blue Cash from American Express card, earning me cash back of $9.75. Not bad.

That's it. Who ever thought I'd pick up such a long blog post at my dealership? ;-)

How NOT to Maximize Cash Back Credit Cards

Here's a Consumerist piece that reports on a couple trying to make the most of their credit card rewards. The key facts:

• They have 20 different credit cards.

• They keep four cards in their wallet and a sticky note to tell them which card to use for which purchases.

• This year, they made $1,093 from spending $47,800.

Ok, let's analyze this a bit:

• They made 2.3% on their charges. Not bad, but it could have been much better.

• It took them a TON of effort to get to those. Can you imagine managing 20 credit cards? What a nightmare!

Personally, I prefer maximum return with minimum effort. That's why I prefer using the one-two punch of the Blue Cash from American Express card and the Chase Freedom Cash Visa Card. Not only can these two cards earn me 2.6% or more (much more if I charged $48k per year) but they also compliment the way I shop. The Amex card is the only card allowed at Costco (where I frequently shop), but it isn't accepted everywhere (like smaller retail stores.) But Visa is, so between the two, I'm covered.

So I max out my rewards and carry two cards. Much better to me than managing a set of 20 cards (and the associated "system" that goes along with them) and only getting 2.3% back.

How to Turn $8 into Millions

Talk about turning your hobby into an extra income. Check out this story about a 17-year-old girl who started a website for $8 and now grosses more than $1 million a year. The details:

Ashley is the head of whateverlife.com, a website she started when she was just 14 — with eight dollars borrowed from her mother. Now, just three years later, the website grosses more than $1 million a year, providing Ashley and her working class family a sense of security they had never really known.

What's she do? She creates and gives away MySpace background designs. You heard that right. She gives away stuff.

So how does she make money? Well, her site is very popular and generates about a million visitors a day. And where there's traffic, there are advertisers. Yep, she gives away designs, generates a ton of traffic doing so, and sells ads to make money.

Looks pretty simple to me. Girl knows what's popular, she takes a risk (only an $8 risk) on making it work, and it turns into millions.

Now, who's ready to do that with their hobby? ;-)

Maximize Credit Card Rewards by Buying Gift Cards Strategically

As I've said before, charging all you can on your credit cards is one of the keys to maximizing your credit card rewards. A related tip is to charge all you can at the highest rebate level. For instance, it's better to charge more on the 3% level of the Chase Freedom Cash Visa Card than it is to charge on the 1% level. And it's especially good to charge gas/groceries/drugstore purchases on the Blue Cash from American Express card once you hit the second level of rewards (you'll then get 5% back on these charges.)

A tip on how to get more top-level charges was left on my post titled How You Can Earn Over 2.6% Cash Back by Using a Combination of the American Express Blue Cash and Chase Freedom Cash Visa Credit Cards. The suggestion:

Here's a loophole that may be of interest:

Purchases of gift cards prominently displayed at the checkout of your grocery or drug store for use at other stores and restaurants (Circuit City, Sears, Outback, Home Depot, Gap, blah, blah, blah) are no different than buying a gallon of milk or a bunch of bananas--they are purchases made at grocery or drug stores. It's not *what* you purchase on the card, it's all about *where* you buy it. So if you're a regular customer at one of these stores/restaurants, the giftcards can serve as your currency...bought at a grocery store, and earning you a bonus rebate (3-5% with a g/g/d card), whereas using your g/g/d card directly at these businesses will likely only get you 1%.

So what's the downside? Not much for the casual user, but 1) If you do this often enough, you'll max out your bonus rebate fairly quickly (unless you have Amex Blue). 2) Giftcards sold in grocery stores typically have a $50/$100 maximum value, you might have to buy (and redeem) quite a few of them to get that big-screen TV. 3) Grocery stores typically have a $400-$500 credit card limit--it may require a phone call to your CC company to get the charge to go through. 4) Giftcards have a few disadvantages compared to credit cards at certain retailers, especially where returns are made without a receipt.

Maybe this works, maybe it doesn't. Here's a follow-up comment:

Careful about that Safeway Gift Card gambit...I was at Dominick's (our local Safeway-owned chain) and saw $25 American Express gift cards at the checkout and figured, hey, I could get these and get essentially 12% off at CostCo instead of the 1% I get otherwise (the only credit card that CostCo takes is AmEx, and my AmEx only gives 1%). I bought a $25 card. It wasn't until I got home that I realized that there is a $3.95 service fee tacked onto the cost of the gift card when you buy it. That's an over 15% service fee, thus obliterating any cash back advantage and then some. I'm going to try to return the card. If the $100 AmEx cards also have only a $3.95 service fee, then it might be worth it. I don't know if all the cards have fees, or how they run, so be sure to check first and calculate the cost of the service fee versus what you're gaining in bonus.

Hmmm. I know my grocery store has gift cards for the store itself, but I haven't seen them for other stores -- but I'm going to look closer.

Anyone out there take advantage of this tip? What store(s) do you shop at? Good idea or bad idea (did you get hit with a service fee?)

Make a Fortune as a Clown/Balloon Artist

Here's a very unique guest post from a Free Money Finance reader. Consider the following that she'll detail:

• You can make $100,000 a year being a clown (or "only" $50k if you want to work 10 hours a week or so.)
• She's a doctor and yet chooses to be a clown. (It seems more fun and pays as well.)
• It's a pretty easy way to make some extra money on the side, even if you don't want it as a career.

Did you know that a clown can make as much as $100,000 per year and more?

I am a professional clown. Oh, well, a balloon artist.

But just to keep it simple, let's call me a clown. We'll keep in mind that a clown, balloon artist, face painter, juggler and anything else to do with event entertainment, all of them can earn rather attractive income.

My only regret is that I didn't learn about this opportunity sooner.

Now, granted, not everyone can be a clown or a balloon artist, but many people sure can. And since FMF asked me, I am going to tell you exactly how to become a clown/event entertainer. By the time you finish reading this post, you should be able to get your own event entertainment gig going and hopefully earn a few dollars until the year ends.

If anything, now is the best time to start. Why?

Because the big holiday entertainment BONANZA is officially here!

As a fair disclosure, I don't pocket $100,000 a year. I only earn about half of that.  But I only work about 10 hours per week, sometimes less than that. But if you work 20 hours per week and charge $100 per hour and many clowns (including me) charge more, you will earn as much as $96,000. It’s pretty decent pay, for a part time job, wouldn't you say?

What do I like about being a clown?

1. I love being paid $100-200 and sometimes $300 per hour. I value every penny of it.
2. I love to command attention. I love making people smile and I love to have fun with everyone!
3. I love that this job doesn't require me to report to anyone. Nobody gives me orders what to do and how to do it.  I work for myself. I do what I think is best and the freedom of doing it my way is a great plus.
4. I love that I am free to choose each event. I don't have to take it if I don't want to.
5. I love that paper work is very limited. Except for an occasional invoice, I don't have to fill any forms, write proposals, reports, and any other paper formalities that were so annoying to me on my previous jobs.
6. I love that each and every event is different. I love to travel to different locations and meet different people. I easily get bored.
7. I love that I hardly have to market my service. I am amazed how easy the process of sale is. I get most of my work by referral from previous events. Each of my jobs is a marketing event at the same time. When prospective clients call, they probably already have seen me at another event. They are most likely to book me.

Now, how did I fall into being a clown?

No, I didn't go to a circus school for that. I actually have an MD degree from Russia. Yes, I did work as a Medical Doctor, in Russia. I came to the US in 1992. I could get my license here, but to make a long story short, I didn't want to.  And as much as I love medicine as a science, I came to the realization that I didn't want to earn a living as a doctor.

Instead of being a doctor, I went through a number of jobs in tech and PR until I discovered balloon art about 3 years ago.

At the time I was a vice president in a high-tech PR agency. I worked sometimes from 9 am-9pm. I didn't enjoy the job for the reasons I stated above: too much reporting, too much paperwork, too much of the same thing over and over.

One day, about 3 years ago, I saw a twisted balloon animal on a street. I fell in love with balloon art. I went out, bought big bags of colorful latex balloons and started twisting.

Let’s just say, I am very practical. Balloon art was fun to twist, but I wanted to be paid too.

I knew I could make balloon animals for tips, so I approached a local mall to let me do it there. They charged me $75 per month rent and I still turned a profit, by twisting about 4 days a week for about 3-4 hours each day for $1-5 in tips. It lasted for about 2 months until I wizened up. That was the first and last time I ever paid a venue. By that time the word spread and I booked enough events to quit my 9-9 PR job.

How you can do it too.

Hook up with a local balloon artist (juggler, magician, face painter or a clown). Ask them to show you the ropes. Clowns and event entertainers are very helpful and friendly people, in general. When you feel confident, go out and do some events by yourself for free at your local church or for a charity event.

Sooner than you think, you will be offered paid assignments, especially now, during the Holiday season.

Now, let me tell you a bit more about balloon art, as it is an impressive skill for a clown to have.

What supplies do you needed to do balloon art?

Obviously, you need twisty balloons. The industry standard is Qualatex balloons. They come in all sizes, colors and even different shapes. Start with the balloon model called Q260, the most common. They usually are sold in bags of 100. I also suggest a hand-held Qualatex pump. The Qualatex balloons and pumps are sold all over the Internet. One bag of mixed color Q260 balloons and a pump should cost you about $ 15. And most big cities have actual stores where they sell balloons and pumps.

What is the best way to learn to twist balloon art?

There are books and video tapes on how to make balloon art. You can find them in your favorite book store, on the Internet and even in your public library. But the best way to start is to find a local balloon artist and tag along for a while. Most clowns nowadays do balloon art, so if you can’t locate a balloon artist, find a clown.

How can a beginner event entertainer market himself?

If you feel you enjoy event entertainment, make yourself business cards. Now, carry balloon animals with you when you do your grocery shopping. Better yet, wear a balloon crown and juggle apples in the produce section every time you shop at your local grocery store.

Well, seriously, entertain for free at charity events and you will see that people start asking for your business cards. 

You can always work for tips in a restaurant or other venue. But I suggest keeping your work for tips to a minimum.

Always remember, being an event entertainer is not a minimum-wage-job. Big budgets for entertainment are out there, so claim your share of the pie.

Myself, I graduated from working for tips to charging up to $300 per hour for my balloon art entertainment. My clients today are luxury hotels and clubs, such as the Ritz Carlton and Mar-a-Lago, West Palm Beach, corporate event planners and upscale families. I have been called the Russian Queen of Balloons. I have been flown to America's Got Talent TV show in Los Angeles. I only work 2-3 days a week.

...and you can do that too, if you want. I wish someone had given me this idea 10 years ago. But now you can have it.

I think I covered everything important, if you still have any questions you can contact me.

I Told You There Was Big Money in Being a College Advisor!

Little did I know that when I wrote $10k Challenge: Become a College Advisor I was on to something big. How big? VERY big. Check out this piece from Business Week titled I Can Get Your Kid into an Ivy. A few, select pieces of information to show how lucrative this field can be:

• Michele Hernandez boasts that 95% of her teenage clients are accepted by their first-choice school. Her price: As much as $40,000 a student.

• Hernandez says she earned almost $1 million last year.

• Hernandez received a $450,000 advance from Warner Books.

• Today, Hernandez has 80 clients.

• Hernandez and Mimi Doe announced their first application boot camp. It was a $7,800, four-day summer program for students about to enter their senior year. Doe and Hernandez promised they would leave with completed applications and a strategy for where to seek admission. All 15 spaces for the New York seminar, held at the luxury Kitano hotel, were snapped up in weeks. In the summers of 2006 and 2007, Hernandez and Doe raised the price, first to $8,200 and then to $9,500, and still filled one session in Manhattan and another at the Shutters Hotel in Santa Monica. Next year they may hire others to help edit the essays so they can open the program to more students. They will charge $12,500.

• Hernandez and Doe have created a virtual boot camp ($2,999). They have put together a 60-page book, Set Yourself Apart: The Ultimate Guide to Top High School Summer Programs ($189). They have a partnership with two SAT tutors who on Hernandez' Web site offer five hours of help over the phone ($1,600). And Hernandez and Doe are hoping to link up with a travel consultant, someone who could plan family trips to visit colleges.

Holy cow -- this thing's a gold mine!!!

Ok, so she's clearly at the top of the heap here so in some respect comparing her to any of us and saying we can earn a bundle is like saying I should earn boatloads of money since I'm in business and many business executives earn millions. Plus, she has experience, connections, name-recognition, and a head start on the rest of us. So we shouldn't expect to make what she does.

That said, I think this field is just forming and there's plenty of room for a variety of advisors with different backgrounds filling different niches. For example, guidance counselors, business people, teachers/professors, and so on could all be good college advisors and probably earn a decent side income. In addition, people could specialize -- maybe having/developing an expertise in something like SEC schools, universities on the West Coast, engineering schools, or Christian colleges. These people wouldn't need to charge $40,000 to develop a nice, side business/income. Even if you "only" earn $100 an hour, you'd still be doing well. Even half that would be good. And it seems like there are more and more people willing to pay to get Junior into the right college.

What do you think -- is there a business here or am I off my rocker?

J.D. Power Names American Express Best in Inaugural Credit Card Satisfaction Study

I've noted that the American Express Blue Cash card is the top credit card for big spenders, but it seems that American Express as a company has something to brag about as well -- it was named the best company in J.D. Power's first-ever credit card satisfaction study. I was emailed the results by a reader. Here are the highlights:

American Express ranks highest in customer satisfaction among credit card issuers, according to a new nationwide study by J.D. Power and Associates.  The study, which was released earlier today, ranked American Express highest in overall satisfaction among the 10 largest card issuers in the U.S.

The J.D. Power study indicates that credit card satisfaction is shaped by many factors (in order of importance):

• A card’s Benefits and Features (34%)
• Rewards (25%)
• Billing and Payment Process (21%)
• Fees and Rates (16%)
• Problem Resolution (4%)

American Express ranked highest in Benefits and Features with a factor score of 773, soaring 103 index points above the industry average.

American Express is a leader in the rewards marketplace because it strives to offer the richest rewards, providing depth and breadth of choice, flexibility and innovation. Rewards programs are the primary reason customers select American Express credit cards.

For American Express, the benefits and features of the Cards it provides comes down to...services like travel-related insurance, purchase protection, and fraud detection.

My thoughts on this:

1. Congrats, Amex. I've used the American Express Blue Cash card for several years now and love it. And it's about to get even better as I combine it with the Chase Freedom Cash Visa Card to earn up to 2.6% cash back.

2. Personally, I don't really care about a card's benefits and features. I'd prefer them to not offer these options and increase their rewards programs instead.

3. I do care about maximizing my cash back, and that's why I've used the Blue Cash card for so long. It earned me almost $500 last year and I'm on my way to beating that (by a long ways) this year.

4. J.D. Power doesn't hand these awards out just for the asking, so I think this is fairly meaningful. Also, they have a reputation for conducting good studies where the accuracy of the data can be counted on, so I see this as very solid information.

Update on My $10k Challenge

It's been awhile since I talked about my effort to earn an additional $10k this year and invest it (doing this year after year can give you a really big nest egg), so I thought I'd give you an update on where I stand. (For those of you interested, here's a list of possible money making ideas.) But first, here's a comment I recently received on my post titled $10k Challenge: Even More Ways to Make More Money:

Your pieces are amazing! They have made me make $700 by reading these tasks and trying them. Thank you so much.

I LOVE hearing comments like this! That's why I have this site and keep writing -- to help people make extra money, save money, and the like. It's so gratifying when one of my readers finds success.

Now before I get to my update, let me tell you what I'm NOT including in my $10k numbers this year:

• Extra income (above what I earned last year) on Free Money Finance. Yes, I give all my profits to charity here, but I could count some of the extra in 2007 towards my goal. But I'm not going to.

• Income from dividends and capital gains. This is supposed to be EXTRA income and my investment income isn't really "extra" the way I see it.

• I've implemented some money saving ideas I picked up this past year (ones that I've shared here previously) and have saved a good amount. But this isn't really income, so I'm not counting it.

With those now out of the way, here are some of the ways I've put some extra money in my pockets this year:

• I've written a few articles for national magazines this year (and have another one yet to do) which has netted me $1,200.

• My cash back for using my credit card will be roughly $700 this year (it should be more next year.)

• I will receive (with my first charge) $100 for using my new Chase Freedom Cash Visa Card. I missed out on the $250 rebate I've heard people talk about and now it appears that $50 is what they're giving.

I have a few things brewing still, but at $2,000, I have a long way to go to reach $10k. Now if I counted the items listed above, I'd be way, way, way over $10k. ;-)

Update: Just got a call asking me to do some consulting work!

Key to Credit Card Success: Pick the Right Credit Card for Your Spending Habits

Here's a very unique piece from USA Today that gives some great suggestions on credit card use. Here's the bottom line of what they advise:

Choosing the card that best suits your borrowing habits can improve your credit card experience.

Not only that, choosing a credit card that best suits your borrowing (or charging) habits can help you maximize the rewards you earn from credit card. But more on that later, I'm getting ahead of myself.

The piece also says that a recent J.D. Power study divides credit card users into two categories:

• Transactors. These are people who usually pay off their balance each month. These folks tend to be more satisfied with their credit cards than are card holders who carry a balance. Because transactors don't have to worry about interest rates, they tend to look for cards that provide the best rewards, Taylor says. That makes sense: If you don't pay interest on your credit card, any rewards you receive are gravy.

• Revolvers. These are folks who typically carry a balance on their credit cards. If you fall into this category, forget about rewards programs. You can't afford them. Your best bet is to pay off your balance each month. But if that's not possible, look for a card with a low interest rate and no annual fee.

Here's my take:

1. If you carry a balance, you need to get your finances in order and control your spending so that you get out of this cycle. It's a VERY BAD financial move to carry a credit card balance and no one reading this post should be doing it (or at least you should be working on a plan to get out of credit card debt.)

2. I am all over the "use credit cards to earn rewards" idea. I never carry a balance, but I do have a couple cash back credit cards that I'm working with to give me the most cash back I can possibly get. Last year I earned almost $500 on my cash back credit card, this year I'll earn more than that and next year I expect to blow the roof off my earnings with a hybrid charging plan.

3. The key to maximizing your credit card rewards is to match where you spend, how much you spend, etc. with a reward you like (cash in my case.) Then look at all the alternative credit card offerings to see how you can get the most rewards based on your situation.

The article also gives some good advice for those who do carry a balance (while they are working to get themselves out of the debt cycle):

Card holders who carry a balance should also consider cards issued by small banks and credit unions, Daugherty says. These lenders don't have big advertising budgets, so you have to do some research to find them. But the payoff is often lower fees and interest rates, he says.

Get Rich by Doing Something No One Else Wants to Do

ESI Money is now offering a free ebook titled Three Steps to Financial Independence. Get your copy here.

Here's a piece from USA Today that details how many people are getting rich by doing jobs no one else wants to do -- cleaning sewage, collecting garbage, picking up dog poop, etc. The highlights:

James Dillard, owner of Dillard's Septic Service in Annapolis, Md., runs a business that most others consider beneath them. Dillard knows that, but he takes it to the bank. He charges $200 to $300 a visit. At about five stops a day, his annual income passes six figures with months to spare.

Turns out there are a lot of people doing well and getting rich running businesses large and small that others consider mundane, boring, beneath them or downright disgusting.

Portable toilets are lucrative, so much so that they have a trade association called the Portable Sanitation Association International, which says the industry brings in $1.5 billion a year servicing 1.4 million portable restrooms worldwide with a fleet of 9,400 trucks.

Most anyone can clean, but more and more don't want to, and so the commercial and residential cleaning services industry grew to $49 billion in 2005 from $29 billion in 1998, says John LaRosa, research director of Marketdata.

Thomas Stanley, author of the best-seller The Millionaire Next Door, made a fortune himself by pointing out that the rich are often in mundane businesses and usually aren't the guys walking around in suits or at country clubs. They are scrap-metal dealers and dry cleaners, he says. They read trade journals such as Poultry Times and Water and Irrigation.

"You don't get rich doing what you love. You get rich doing something no one else wants to do."

This summer I went to a party held by a couple my wife knows. The party was at their house which, I'm guessing, was 7,000 square feet or so. Outside was a huge, in-ground pool with massive rocks built up around it (I KNOW they paid more for their landscaping than I did for my house.) They had an out-building where the husband had his office, a small house on-site where a relative lived, their top-of-the-line RV parked next to the out-building and so on. Yes, I realize that they may have borrowed a ton to finance all of this and they could be in lots of debt, but they had to have tremendous resources even to qualify to borrow enough to afford all that I saw.

I talked to the husband a bit while we were eating. His business? He had a sewage and water irrigation company. He noted that he had been in circumstances where the sewage was chest-high on him as he worked to repair a system. But he also noted that he was very well paid since no one else wanted to do what he did.

I've always heard that one way to get rich was to do something that others hated doing. They'll pay a ton for you to do it instead, and you'll get rich. Anyone out there ever put this into practice?

I Just Received My Chase Freedom Card -- I Have Some Thoughts/Tips

This past weekend I received my Chase Freedom Cash Visa Card in the mail (I plan to use it as part of my strategy to make 2.6% cash back.) I called and activated the card right away and thought I'd share some of my thoughts on the experience as well as a few tips to make the most out of the card. Here goes:

1. Make sure your card is part of the Chase Freedom Dynamics Cash Rewards program. If it isn't, request for it to be. Mine already was part of the program, so I was set to go here.

2. The card gives you 3% cash back on the three of fifteen categories where you spend the most (to see the 15 categories, see Actions to Take If You Get a Chase Freedom Card). My most likely top three are going to be grocery stores, gas stations, and drug stores. But since I'm already in the 5% cash back category with these with my Blue Cash from American Express card, I plan on using the Amex card for them and using the Chase card in other areas until January (my Amex anniversary date) when the Amex card resets.

3. But here's the rub on #2. How your charges are allocated (whether they are assigned as a grocery transaction, a gas station transaction, etc.) is based on the category the store uses in processing its card transactions. Hence what you may think is a grocery store is not classified that way and hence you'll not receive 3% cash back on charges there. And Chase can't tell you in advance how a store is classified. So your only solution is to run test charges and then look at your statement to see how various stores come out. Then you can plan your charges accordingly.

4. Most notably, mass merchant stores are NOT included in the list of 15. Whether or not any particular Wal-mart (for instance) is classified as a mass merchant or a grocery store can only be determined by doing a test charge as noted above. But it appears that a Wal-mart (or Target or Kmart) that doesn't have a good bit of space devoted to groceries will have no chance of being in the 15 categories.

5. I talked to the Chase rep who activated my card (actually, the guy they assigned to try and sell me extra services once I had activated the card myself) about the issues noted above and he said I was "already way ahead of most people in my thought process on how to use the card." Little did he know how much I write on the issue. :-) 

6. We made a charge on the first day we had the card just to make sure the first statement will have something on it (we have three months to settle out the other issues, so I'm not sure when we'll charge again on it.) I wanted to get at least one charge in so we'd be able to collect our bonus (there's currently a $50 sign-up bonus on the Chase Freedom Cash Visa Card) asap.

7. I also do my banking with Chase and while on their site the other day I noticed that a Subaru credit card I have with them also showed up when I logged on. Cool. It's nice to have everything in one spot. I asked the phone rep and he said I should see my new card show up soon as well.

Earn Extra Money Making Your Friends Beautiful This Holiday Season

Here's a piece courtesy of ARA Content. It's obviously the combination of an article/sales pitch, but I thought this could be a worthwhile short-term business for some people out there to make a few extra bucks, so I'm running it.

The holidays are a wonderful time of year that brings much anticipation. But with all the fun also comes a pinched family budget. What if there was a way to earn extra holiday money while having a great time?

The Body Shop is a company that believes the holidays should be merry for everyone. Through The Body Shop At Home business, consultants hold home, office and other themed parties, which are a great way to boost your holiday earnings while spreading cheer. Consultants meet with a host and their group of friends, colleagues and neighbors to exchange makeup tips, help each other look great and to earn some extra cash for last-minute holiday gifts.

Here are some top trends for the 2007 holiday season that consultants can share:

• Luxurious bath and body treats in the nutty, indulgent scent of Sweet Chestnut - introduced this season exclusively for The Body Shop At Home customers. From body butter to hand wash, these products conjure memories of past holidays where it might be cold outside, but inside it’s warm with the happy emotions of the season.
• Gifts that give more for friends and family, from bath & body to home fragrance gifts like Totally Tropical Home Fragrance gift with Satsuma and Exotic Home Fragrance Oils.
• Enchanting make-up with gleaming metallic shades delicately contrasted with multi-colored gems. The Gold Sparkle Collection offers tantalizing textures and stylish, pocket-friendly packaging.

Working as a consultant for The Body Shop At Home lets individuals balance hectic schedules between work and home and earn extra income during the holiday season and beyond. The position offers great potential and flexibility:

• It’s a great opportunity to earn money and be your own boss, whether you want to build a long-term career or take on a second job or flexible part-time work.
• Previous experience is not required. For $220, you get a start-up kit with more than $600 worth of products. Plus, you receive free training, where you can learn how to give facials, apply make-up and host themed parties.

“The Body Shop At Home gives consultants the freedom to be their own boss and have fun on the side,” says Jo Price, Director - The Body Shop At Home. “It is an entrepreneurial opportunity that gives consultants a way to help women feel great and, with 60 percent of the products sourced from The Body Shop Community Trade Program, it is an empowering way to give back.”

Through the Community Trade Program, many products from The Body Shop contain ingredients bought from small-scale farmers at a fair price, giving them a stable income and hope for the future. This means that every time you sell a product, you know you are supporting communities where people would otherwise struggle to make a living wage.

Interested in becoming a consultant or hosting a party? Call (866) 775-8049 or send an e-mail to [email protected]. For more information, visit www.thebodyshopathome.com.

Actions to Take If You Get a Chase Freedom Card

I've recommended the Chase Freedom Cash Visa Card as part of a hybrid credit card rewards strategy to earn up to 2.6% cash back. I've applied for the card myself and am expecting to get it soon. Well, I received this email from a reader suggesting one step we all need to take when we get our cards:

I applied for the Chase Freedom Card per your recommendation and research (great choice, btw). Just wanted to let you know that once you get your card, you may not be automatically enrolled in the program that gets you 3% cash back on the 3 categories you spend most in. When I signed up, I was placed in the "Chase Freedom Cash Rewards" program, which is just 3% for groceries, gas, and fast food.

I sent a message to customer service and they moved me over to the "Chase Freedom Dynamics Cash Rewards" program, which lets you get the 3% in the 3 categories in which you spend the most.

The reader also sent a note from Chase customer service. Here are the highlights:

We show that your account was enrolled into the Chase Freedom Cash Rewards program. Per your request we have updated your account to the Chase Freedom Dynamics Cash Rewards program. That earns as follows:

Chase Freedom Dynamics Rewards program allows you to earn 3% cash back for every $1 top 3 spend categories (out of a pre-defined set of 15 categories). The categories are:

• Grocery stores
• Gas & convenience stores
• Quick service payment/Fast food restaurants
• Telecommunications
• Cable/satellite TV/Internet Service Providers
• Video rentals
• Department stores
• Dry cleaners
• Drugstores
• Movie theatres
• Local and suburban commuter passenger transportation (including ferries, bridges, tolls, parking garages, taxis/limos)
• Pet supply stores and Veterinary services
• Utilities
• Beauty shops (salons and spas)
• Gym/recreation memberships

You earn 1% cash back for every $1 for all other purchases. There are no limits to the amount of rewards you can earn. Cash Back rewards expire after 36 months after they are earned.

So in summary, you want to be part of the Chase Freedom Dynamics Cash Rewards program. If you get your card and aren't, be sure to request a change.

Thanks, Matt, for pointing this out!

Free Money Finance Reader Could Earn Up to 50% More Using Chase Freedom Credit Card

Here's a comment left on my post titled Details on Chase Freedom Credit Card (Plus $50 Bonus):

Thanks to your earlier blog on this card, I was able to "trade" my old regular Chase card to a Freedom Rewards card you describe above. I should be receiving my card any day now and will use it as my primary card as soon as it comes. I went back and recomputed a couple months of my old Citibank dividend card bills and would have earned about 25-30% more each month, and that's not even figuring in the additional fast food and utilities that I will charge on the cards when they come. I suspect I might earn up to 50% more a month with this card. So I guess that's a long way of saying "Thanks, FMF".

I LOVE comments like this! This is what Free Money Finance is about -- helping people earn more, save more, and manage what they have in a way that helps them grow their net worth! Thanks for sharing this, Kevin.

Just to be clear, I think the best way to earn the most on cash back credit cards involves a hybrid approach using both the Blue Cash from American Express card and the Chase Freedom Cash Visa Card. I've been a Blue Cash user for years (it earned me almost $500 last year) but I've applied for the Chase Freedom card and plan to use the hybrid strategy in the future.

American Express Blue Cash Top Credit Card for Big Spenders (And How to Make Even More with It by Charging Your Mortgage Payments)

In my search for the best cash back credit card, I started with the Blue Cash from American Express card since it earned me almost $500 last year. I'm on my way to beating that this year, but in the meantime, I discovered a hybrid strategy that can earn up to 2.6% cash back by using a combination of the Blue Cash from American Express card and the Chase Freedom Cash Visa Card (which has a $50 bonus offer available at the time of this post). I'm in the process of shifting to the hybrid strategy (I've applied for the Chase Freedom Cash Visa Card) but I may not make the shift until January as I've reached the second tier of rewards on the Amex card and I want to ride it as long as I can.

That said, I ran into two pieces on American Express that I wanted to pass along to you all. First, Money magazine recently named the Blue Cash from American Express card the top reward card for big spenders. As we saw in How You Can Earn Over 2.6% Cash Back by Using a Combination of the American Express Blue Cash and Chase Freedom Cash Visa Credit Cards, if you spend below $12,000 a year, the Chase Freedom Cash Visa Card is a better deal while over $24,000 makes the Blue Cash from American Express card better. Somewhere in between, the Amex card takes over from the Chase card, probably around the $15,000 charged per year level. I'm well above this, and hence I use the Amex card as my top choice.

Second, in The Keys to Getting the Best Reward Credit Card for You, I stated the following:

Charge all you can on the card. Once you have the above figured out and decide which card or cards are best for you, make the most of it (them) by charging all you can. Look at all your big purchases and see if there's a way to put them on your card. Look at regular, on-going purchases and see if you can pay these (with no cost) via credit card. Especially look at all those purchases that give you extra rewards (such as the gas and grocery store extras noted above) and be certain to get as many of those charged as possible. For a couple creative ideas, check out Can You Charge a Car on Your Credit Card? and Donate to Charity with a Credit Card.

I never even dreamed that people could charge their mortgage payments on a credit card, but it appears that American Express now offers this option. The details:

In what is considered to be a first for the credit card and mortgage industries, American Express said it will now allow cardholders with any of its charge or credit cards and a prime loan from American Home Mortgage to charge their mortgage payments and earn reward points for doing so.

American Express currently has one partner - American Home Mortgage. But later, it plans to announce another partner-lender, with more partners in the works, said company spokesperson Christine Elliott.

Wow! That could really rake in some big bucks. Let's say your mortgage payment is $2,000 per month. If you're already at the top tier level of rewards with the Blue Cash from American Express card, you'll earn 1.5% back on $24,000 a year -- that's $360! Unfortunately, the program costs $395 to set up, so you're almost even at the end of one year, but after that, it's all gravy. Not bad for doing something you'd be doing anyway.

Of course, you HAVE to pay off the card every month for this to work. Otherwise, such a plan would get very, very expensive.

How to Get Rich: Start Your Own Business

Here's a quick quote from Managing Editor Eric Schurenberg in Money magazine's July issue:

The average self-employed American's family has five times the net worth of the average wage earner's. So the payoff can be high if you succeed. Only problem: Success comes hard.

Yep, if you develop a winning business, odds are that you'll do quite well financially. Yet the chances of developing a winning business are small.

But to improve you chances, I have a few resources you may want to check out. First of all, Money magazine offers a short quiz to help you see if you have the right stuff to be a successful entrepreneur. And for ideas/inspiration, the magazine profiles others who have done well in developing their own businesses. Finally, they list four steps to starting your own business including:

• Work two jobs - "Get as much of your new business as you can set up while you're still collecting a regular paycheck."

• Plan to survive on your new nonsalary - "Once you have an idea for your venture, you need to think realistically about how much money it'll take to get going and how you'll support yourself and your family while you're not drawing a salary. Expect that period to last a year or longer, so put aside at least 12 months' worth of living expenses. Another alternative is to moonlight during the first few years."

• Sell your family on the idea - "Running your own business is supposed to give you flexibility, but not when it's a start-up. It will chew up every minute. Whatever else your company makes, you can be sure that it will manufacture guilt at a steady rate. So warn your spouse and kids: You won't be around as much."

• Keep your benefits coming - "Don't forget to hold on to your health insurance; under COBRA rules you can extend corporate coverage for 18 months on your own dime. By then your company should be robust enough to afford a policy."

It can be a risky way to become wealthy (after all, a lot of businesses fail, so do you really want to leave a nice, secure job to risk your financial health?), but if you do it right, it can be quite lucrative.

What about you? Anyone out there thinking about (or already done so) starting your own business? How's it going?

Details on Chase Freedom Credit Card (Plus $50 Bonus)

On the heels of my post titled How You Can Earn Over 2.6% Cash Back by Using a Combination of the American Express Blue Cash and Chase Freedom Cash Visa Credit Cards where I recommended using a combination of the Blue Cash from American Express credit card and Chase Freedom Cash Visa Card to earn a great cash back rate on your charges, I was emailed the following by a Chase representative. Since it gives extra details on the Chase Freedom Cash Visa Card, I thought I'd share it with all of you.

In particular, the original piece noted that the Chase Freedom Cash Visa Card gave 3% cash back on three of your top spending categories (within a pre-selected list.) Here are the details on how that works:

The enhanced feature sets Chase Freedom apart as the only triple earning rewards program that is driven by, and adapted to, a cardmember's individual everyday spending habits. Chase Freedom customers earn triple cash back or reward points in their top three of 15 everyday categories, including:

• gas stations/convenience stores
• grocery stores
• department stores
• drug stores
• fast food and quick service restaurants
• movie theaters
• movie rentals
• dry cleaners
• health clubs & gym memberships
• beauty salons and spas
• pet supply stores and veterinarians
• mass transit and local commuter expenses
• telecommunications
• utilities
• cable/satellite TV and Internet bills

Regardless of how consumers' spending categories change, the power to earn triple cash back or rewards is made possible by Chase's patent-pending technology that adjusts rewards automatically based on cardmembers' monthly spending.

In other words, you spend and the card automatically calculates which three categories (the ones you spent the most on) you get the 3% back on. I don't have the card yet (just applied for it), so I can't say whether this works or not. For us, many of these categories wouldn't add up to much even at 3%, though gas stations/convenience stores, grocery stores, department stores, drug stores, and fast food and quick service restaurants certainly offer a lot of promise as we spend a lot in these areas.

Currently, I'm planning on switching to the hybrid method discussed in How You Can Earn Over 2.6% Cash Back by Using a Combination of the American Express Blue Cash and Chase Freedom Cash Visa Credit Cards instead of just using the Blue Cash from American Express credit card. I should have my Chase card soon and plan to get started right away (though I'm into the upper levels of the Amex card reward now, so I need to run the numbers -- I may wait until January 1 to employ the Chase card.)

For those of you who haven't yet applied for a Chase Freedom Cash Visa Card, you can do so now (at the time of this writing -- I'm not sure how long it will last) and get a $50 bonus after your first purchase. Take that money and put it toward the extra $10k you're working on this year. ;-)

$10k Challenge: Become a College Advisor

As many of you know, I'm trying to raise an additional $10k this year in income -- extra income outside my regular job. (The numbers I ran show that making this amount and socking it away year after year can yield quite a sizeable next egg.) Here's another idea for those of you trying to do the same thing: become a college advisor

Believe it or not, people are paying money (and good money at that) to have their kids receive college-related advice on which schools to apply to, how to apply, how to get in, etc. Here are some details from Kiplinger:

Worried about getting junior into college or graduate school? For $1,000, an admissions consultant can help your child narrow down thousands of options to a dozen or more schools that could be the right fit.

Valerie Broughton, an admissions consultant in Minneapolis, identified schools that complemented Michael's academic and social interests, set deadlines for applications, and coached him on essays and interviews. Broughton charges $2,750 for the total package but will work for an hourly rate of $200.

You'll typically pay more than $1,000 to get the full range of services from an admissions consultant. But the most valuable service is narrowing the list of schools to those likely to admit your student, give financial aid and offer the best educational programs for your child's interests. A grand will buy such a list from a qualified consultant, says Mark Sklarow, executive director of the Independent Educational Consultants Association.

Holy cow!!!!! Are they kidding?????? Is there really a career in this? If so, maybe it's something I should consider as a side business. Surely I could recommend colleges to go to, couldn't I?

How to Start Your Own Business

While I'm on vacation, some great bloggers are filling in for me with a few posts each day. The following is from Cindy at Staged 4 More:

Starting your own business is probably the best thing I have done in my life. It taught me a lot of my limits and my worth, it also has challenged my personal characters. Moreover, it is a great way to increase your net worth because after all, you can control your destiny.

Having a small business can also be a money pit, where you can over-invest on inventory (if you have any) or machinery, equipments, office supplies etc. I personally don’t believe in over-investing because you can drain your financial resources very quickly. You can grow your net worth by grasping your financial picture. Here are a few tips if you are thinking about starting a small business:

1. It’s okay to be small: I am very happy that my company is still very small, because it is manageable for me and if I take on full time employees then my monetary responsibilities increase dramatically. It is also a very personal thing to have my own small business, everyone who comes through the doors, including clients, become family. After all, it’s a people’s business.

2. Get a financial plan: We all have this dream that once we go out on our own, we will strike a goldmine immediately and clients will be calling us non-stop. Well, if that doesn’t happen, make sure you do have resources to fall back on. Generally it is recommended to save 4-6 months worth of living expenses save up when you work hard to take your business off the ground. You should also speak with a professional to plan everything out financially before you start. You need to figure out what your start up costs are which include marketing, licensing fees, continue education if any, investment in inventory, machinery, computers, etc.

3. Network, network, network: It doesn’t mean you go out and hand out business cards to everyone you meet, because you are not building meaningful relationships that will make you memorable and become part of someone’s rolodex and referral list. One of the ways I network is that I started my own support group for other small business owners who are women. I feel that it’s more important to develop personal relationships, that way the referrals are stronger and more meaningful. Running a small business can also be very lonely, so it doesn’t hurt to meet other people who can support your endeavors and who understand what you go through on a daily basis. I am the only one among my friends who have her own small business. They have no idea what I go through every day and that can get frustrating sometimes.

4. Make sure you are covered in the worse case scenario: I work in the real estate industry in California, which is a very litigious industry to begin with, let alone living in California. Our disclosure packet is bigger than some state’s real estate sales contract. Craziness, huh? It’s very important to make sure you are covered legally in case of a worst-case scenario.

5. Think big: My company is small right now, but I know one day it’s going to be bigger. Eventually I want to branch out the services that I provide and add support staff and divisions that will service my clients better. It’s an old cliché that we should set goals, but it is very important to do so. You wouldn’t get into the car and not knowing where you are going, right? Same with running your small business. Once you know your direction, everything else will follow.

6. Seek help when you need it: I used to stage homes all by myself to save money on labor and it SUCKED. It was lonely and I couldn’t bounce ideas off others. I also cannot manage everything all by myself now that the company is growing. It’s not cost efficient for me to do everything while I can focus my energy on things that really need attention, such as billing, customer relations, etc. while I can have a virtual assistant or intern to do spreadsheets.

7. Be happy! Running your own business can be a 24/7 and a life consuming ordeal. I know this because I crashed in April, had a total break down and I couldn’t leave my bed for 3 weeks. I didn’t listen to my body as to when I should stop and rest, finally it just gave up. I was burnt out emotionally and physically. After May (my busy season, I worked 12-16 hours every day), I pretty much just crashed and had no motivation to work at all. The productivity obviously suffered, I dropped my ball on prospecting and consequently the revenue suffered too. You gotta take time and be happy at what you do.

How to Earn an Extra Income by Becoming a Home Stager

While I'm on vacation, some great bloggers are filling in for me with a few posts each day. The following is from Cindy at Staged 4 More:

When FMF first suggested this topic I was frankly a little hesitant to write it. I have been a professional stager for about two years now and have seen quite a few newbies who never took off in their businesses or stagers who left the business after couple years. It’s a high turnover business, like any job in the real estate industry. The main reason for such high turnover is that people don’t have the right expectations coming into the industry. HGTV has made it very glamorous and seemingly easy to do, but the daily grinds of running your small business, liability issues, administrative tasks, taxation issues, inventory upkeep, time management, personnel management, prospecting, marketing, PR, etc. can kill any aspiring professional very easily. I have seen quite a few jump into the industry and have no clue what they were doing whether in staging or running a small business or both, and consequently hurt themselves and their clients along the way. In the long run, that does hurt the industry and makes it difficult to work with clients sometimes when they have the misconceptions or already got burned by previous bad staging experiences.

That said, it is actually very easy to become a home stager, that’s why there is a significant increase of stagers in the current market.

Unfortunately there are neither ethics nor regulations that set standards for stagers. That means essentially anyone can print up a business card and set up a website then call herself/himself a stager. Working as a stager can be good money, as we have seen on shows like Million Dollar Listings where stagers charge $30,000 to stage a home (Although in general, that’s not the case. It varies by market.) It is also fabulous to work for yourself. It certainly is a creative job.

Here are a basic ways you can earn side income as a stager:

1. Write consultation reports: Consultation reports are basically DIY reports for the sellers. You visit the home, write down detailed notes and instructions for transforming their home, and have the homeowners stage the homes themselves. You can also include a visit so you can make sure the homeowners are staging it according to your instructions. Sometimes sellers don’t feel motivated to stage it so they may only do part of it. Unfortunately, the entire home is for sale, not just “part of it,” so it’s good to pay a visit to make sure they actually did what you said they should do.

2. Redesign homes to live/sell: Basically you come into the home and use their existing furnishings and accessories to stage. When sellers are strapped for cash, you gotta use what they’ve got. Many believe that staging is about moving all the furniture out and then moving in stager’s furniture. NO. Staging doesn’t have to be costly and I personally don’t believe that the sellers should spend more than they should to get their home sold. It’s a waste of monetary resources and everyone’s time. Sometimes when homeowners don’t have accessories at all, or theirs are outdated, I do bring in my accessories to style the homes. This happens when young couples know that they would be moving in couple years, so they purposely didn’t buy anything to decorate the starter condo/home. Or senior citizens who haven’t updated their homes while they live there. I also encounter sellers who have very personal décor, such as religious symbols, nude paintings, etc. where I generally will bring in home accessories as well to neutralize the home to appeal to a broader range of buyers.

3. Full vacant home staging: This is a whole new ball game. You can either carry inventory or use rental furnishing. When you carry inventory, you need storage and general upkeep. Shopping for inventory sounds great and all, but moving everything here and there can be gruesome and physically demanding -- not to mention the gas and car maintenance expenses. If you have inventory, you may also get a vehicle or rent. I move all my furnishing and accessories including sofa, love seats, coffee table, vases, bedspreads, etc. I have lots of bruises up and down my legs and have fractured a couple toes by accidentally dropping couches on my feet. When you use rental furnishing, your sellers may be less likely to pay for you to do it, or they will completely cut you out of the game. Rental furnishing is expensive. There are 2-month minimums and monthly minimums. In the San Francisco bay area, the cheaper furnishing rental company asks for 2-month minimum at $750 minimum per month, add 12% insurance and $175 delivery fee, that’s around $1800. And that doesn’t include the stager’s labor and accessories (rental furnishing companies generally don’t rent accessories like bedspreads, flowers, etc.). $750 doesn’t stretch a lot when you need to fully furnish a 2BR home. The couch alone will cost you roughly $180 to rent. Vacant staging is not for the faint hearted.

4. Cultivating other streams of income: The thing I love about my field is that there are a lot of options. You don’t have to just do these three things, you can extend your services to event staging, model home staging, or staging to live and work. The possibilities are endless.

It’s very easy to be over-zealous when you have a prospect in starting your own business. That’s why I am not going to sugar coat this profession. Many jump into the field feeling that they can automatically achieve high income. You can't. You have to work for it just like every other job. Donald had to work from the ground up, the same with Nordstrom, who started in the stock room. It is also necessary to have great business skills. You can be fabulous at what you do, but if no one knows about your services, you cannot succeed. After all, business is not going to fall from the sky. You have to work for it. You may also have to work weekends, which is very common in the real estate industry. This job is also very seasonal. During the peak season, I work 12-16 hours a day every day for weeks. During the slow season, I have absolutely no or very little jobs and I catch up on development of the business. When you first start, it may be difficult to get a job since you have no portfolio. To be successful at it, you need persistence, strong business skills and a sense of design. Just because you have a “flair for design,” which is by the way on every resume that I receive, doesn’t mean you will cut it in the industry.

If you are thinking about becoming a home stager, I would recommend to:

1. Talk to people who already work in the field IN YOUR MARKET. I get calls from stagers from New York, Ohio, Chicago, Seattle, and they ask me what to charge people because they don’t know. Well, every market is different. What costs $1500 in San Francisco will probably costs $890 in Ohio and $3500 in New York. Research the position and starter pay to see it is feasible for you to do on weekends. You want to work on weekends to supplement your income, find out if that works in your market. Generally open houses are big on weekends, the realtors will prefer you to finish everything by the weekend so they can have open houses. You may have to work nights instead of weekends to get those jobs done.

2. Even if you are only a part time stager, get insurance and make sure you are covered.

3. Figure out how much starter costs there are. There could be very little overhead if you are just working as a report writer and doing redesigns. However, life doesn’t work out that way. I set out to only do redesigns, and then all the calls were for vacant staging. I had no choice but start staging vacant homes because that’s all the market called for. And vacant staging is a lot more overhead (transportation, inventory cost and maintenance, storage).

4. Shadow someone and offer to work for free to make sure you actually like it. It looks really fun and cool on TV, but would you like to do it in real life? A friend of mine got featured by her local media once and she sent me the photos. I started laughing because they took photos of her in her best suit, all the photos were her placing a potted plant or some accessories on a table. In reality, I stage in sweat pants and t shirt. Sure I do style the home, I also move couches. I am not going to wear my best suit to move a couch! I also spoke with a real estate agent once who hated her job as a realtor, so she transitioned into staging because she loves interior design. Then she didn’t realize that she actually had to move furniture, so she went back to being an agent. It sounds really silly but it happens more often than we think.

5. Get staging education. True, it is not rocket science, but there is still some science behind it such as what colors will sell well, what furniture arrangement can create an open and welcoming flow, etc. There is also a lot misunderstanding of what staging is because of mixed media reviews. Just because you are a HGTV enthusiast doesn’t mean you can cut it in real life. The television program heavily condenses a 3-day project into 1 hour, which includes advertisements. There is a lot of blood, sweat and tears behind the scenes that we do not see as the audience. Staging education will also help you network with other new stagers and meet seasoned stagers. Having your own small business is lonely, so having a support network is always great.

6. If you don’t know what to do, be honest. Don’t use the trust of your client blindly. You will not only hurt your clients in the long run, you can also put yourself at risk for liability lawsuits. If you encounter a situation that you don’t know, find someone who does to subcontract under you or simply refer them to someone who knows how to do it properly.

Debit Cards Rival Cash at Stores

Consumer Reports Money Advisor has a chart in the September issue that details how people pay for their items at stores (it implies this is all stores -- grocery, mass merchants, etc. but that's not 100% clear.) The surprising part to me is how high the amount is for debit cards. The stats including the percentages using each of the following to pay:

• Cash -- 33%
• Debit card -- 33%
• Credit card -- 19%
• Check -- 11%
• Gift/prepaid card -- 4%

My thoughts on these:

1. I don't have or use a debit card, so I was surprised to see it this high -- that as many people use debit cards as use cash.

2. Personally, we use our credit card, the Blue Cash from American Express card, on everything we possibly can. (Doing this made us almost $500 last year.) If you're trying to do the same and make money off your credit card, one key is to charge as much as possible to it. This makes paying by debit card, cash, or anything else undesirable.

3. Checks at 11%? I haven't written a check at a store in about 15 years.

4. The Money Advisor piece goes on a bit and compares credit cards to debit cards. One part I want to highlight is the value of each when it comes to reward programs:

The cash-back, mileage, and other rewards that accompany credit cards tend to be much more generous than debit-card perks.

So far, the Blue Cash from American Express card is the best cash-back credit card I've found to date, and that's why I recommend it. Last year, I earned 1.8% cash back on it and I've yet to find anything close in a single card. Yes, you can take promo rates, switch back from one card to another to another, and so on, but that takes an awful lot of time and effort to MAYBE get a better return. I'll stick with one card that I know works and maximize it to the hilt.

That said, if I found one that performed better, I'd switch. :-)

$10k Challenge: On My Way to Big Credit Card Rewards Cash This Year

As many of you know, I'm trying to raise an additional $10k this year in income -- extra income outside my regular job. (The numbers I ran show that making this amount and socking it away year after year can yield quite a sizeable next egg.) One way I'm doing this is to maximize the cash back on my reward credit card. I thought you all would like an update on how this is going.

As background, I use the Blue Cash from American Express card which I consider to be the best cash-back credit card. In 2006, it earned me almost $500 and I have been working to better that in 2007.

Last year, I had total charges of $26,279.67 and I earned a $482.38 rebate. This gave me a rebate rate of 1.84% -- well above the "industry standard" of 1%. (BTW, if you're settling for 1% on a cash-back credit card, you're leaving a TON of money on the table.)

Through July of last year, here's where I stood:

• Total charges: $9,777.51
• Rebate earned so far: $127.20
• Rebate rate: 1.30%

Through July of this year (my August statement had results through July), here's where I stand:

• Total charges: $14,743.53
• Rebate earned so far: $226.40
• Rebate rate: 1.54%

A few thoughts on my progress so far:

1. I've been working hard to put as much as possible on the card and obviously it's working. While the primary increases in charges versus last year are one-time events (trip to Disney and a new road bike), we have also been diligent in adding all possible charges to the card.

2. There are several ways to look at the amount I've earned so far to predict what I'll end up earning. It's obviously dependent on how much I charge in the remainder of the year, what I charge on (the card has higher rates on gas, grocery, and drugstore purchases), and the like. But I think it's safe to say that I should be well over $500 by the end of the year. Can I make $600 or even $700? We'll see, but these are certainly possibilities.

3. My rate will keep on increasing throughout the year as I'm now safely into the second-tier rebate level on the card. I'm now earning 1.5% cash back on everything except gas/grocery/drugstores where I earn 5%.

How You Can Earn Over 2.6% Cash Back by Using a Combination of the American Express Blue Cash and Chase Freedom Cash Visa Credit Cards

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As most of you know, I like and use the Blue Cash from American Express card. It earned me almost $500 last year, and I'm hoping for more in 2007. I've looked at a ton of other cards in an effort to find one that gives me more cash, but I haven't found any. That's why I've named the Blue Cash from American Express card the best cash-back credit card.

That said, I'm always on the lookout for a better-performing card. Recently, I had a discussion in the comments of my post titled The Best Cash-Back Credit Card. Chris told me that he thought the Chase Freedom Cash Visa card was a better deal. We went back and forth for a bit, then we took our conversation offline. I asked him to do a review of both of the cards under three different spending scenarios and to provide a backup spreadsheet for review. He graciously agreed and what I have below is Chris's take on the American Express Blue Cash card versus the Chase Freedom Cash Visa card. His take:

Overview of the Cards

The American Express Blue Cash card offers a tiered rebate level, based on your year-to-date purchases.  For the first $6,500, you earn 1% on purchases at grocery stores, gas stations and drug stores and 0.5% on everything else.  Once you've gone past $6,500 for the year, you earn 5% on purchases at grocery stores, gas stations and drug stores and 1.5% on everything else.

The Chase Freedom VISA gives you 3% on purchases at grocery stores, gas stations and drug stores and 1% on everything else.  It is not tiered; you earn the full 3%/1% from the first dollar spent.  But, while there is no overall maximum on the amount of reward you can earn, there is a maximum of $600 per month which can earn the 3%; purchases over that earn only the 1%.  Further, if you allow your reward balance to reach $200 before redeeming, Chase will kick in an extra $50.  This means that you are effectively earning 3.75% on grocery/gas/drug purchases (subject to the $600 max) and 1.25% on everything else. 

Now, Chase has recently added another option to the Chase Freedom VISA, sometimes called "Dynamic Cash Rewards."  This feature allows your 3% earning to change to the three essential categories where you've spent the most each month.  The "essential categories" number fifteen, and include gas, grocery and drug stores, as well as telecommunication charges, cable/satellite TV/Internet Service Providers, utility payments, gym/health club memberships, spas/salons, quick service payment/fast food restaurants, video rentals, department stores, dry cleaners, movie theatres, local and suburban commuter passenger transportation (including ferries, bridges, tolls, parking garages, taxis/limos), and pet supply stores/veterinary services.

Assumptions

For the purposes of this comparison, I'm going to make a few assumptions.  First of all, I'm assuming your charges are spread out somewhat consistently over the year.  Because of the tiered nature of the AmEx card, the timing of charges can affect the amount of your rebate.  Even at the same total yearly spending level, if you make a significant portion of your non-g/g/d purchases very early in the year (like taking a large vacation in January), you will increase the rebate you get.  If you delay those non-g/g/d purchases until later in the year, or make an inordinately high level of your g/g/d purchases early in the year, you will reduce the rebate you get.  Again, for the sake of this comparison, I'm assuming your spending patterns are consistent.  For the purposes of the Chase card, I'm assuming grocery, gas and drug will be your essential categories, and that you will allow your rebate, as an ongoing rule, to accumulate to $200 before cashing in.

Results

• For a total spending level of $1,000 per month, of which $450 is grocery, gas and drug, the AmEx Blue Cash would earn $223, while the Chase VISA would earn you $285.  Winner: Chase.

• For a total spending level of $2,000 per month, of which $700 is grocery, gas and drug, the AmEx Blue Cash would earn $526, while the Chase VISA would earn you $480.  Winner: AmEx.

• For a total spending level of $3,000 per month, of which $850 is grocery, gas and drug, the AmEx Blue Cash would earn $781, while the Chase VISA would earn you $630.  Winner: AmEx.

My conclusion is, that at a relatively low level of spending, the Chase VISA may be a better deal for you.  But if you spend more than, say $1,700 per month, the AmEx Blue Cash starts to be more advantageous.  The higher your spending, the more the AmEx Blue Cash makes sense.  Your mileage will, of course, depend on many factors, including the percentage of g/g/d purchases to other purchases, and purchase timing (as described above).

But wait, there's more!

If your spending is at a level where the above would indicate the AmEx Blue Cash would be superior to the Chase VISA, you can bump up your rewards a notch by using a hybrid approach.  Taking advantage of the "Dynamic Cash Rewards" option of the Chase Freedom VISA, you could select any three of the other twelve "essential" categories (other than grocery, gas, and drug), and use the Chase VISA for only those charges.  Put everything else, including gas, grocery and drug on the AmEx Blue Cash.  Doing so will automatically earn you some extra cashback bonus. 

For example, in the $2,000/$700 example above, using only the AmEx card would earn you $526.  But by peeling off, say $300 in other "essential" categories onto the Chase VISA, you'd forego $66 from the AmEx, but you'd earn $135 on the VISA, for a net gain of $69.  At the $3,000/$850 example, if you diverted $600 in essentials to the Chase VISA, you'd drop your AmEx rebate by $112.50, but you'd earn $270 on the Chase VISA, for a net gain of $157.50.  Now, remember, I'm assuming you're allowing the Chase rebate to accumulate to $200 before redeeming, so to get the full amount of these savings may take somewhat more than a year to reach the necessary level, as would be the case in the $2000/$700/$300 example.

And actually, carrying the Chase VISA in addition to the AmEx isn't such a bad idea anyway, since there are a few places which don't take AmEx.  Using this approach, you've covered most of the bases.

Be careful if you sign up for the Chase VISA, however.  Chase apparently still offers the straight g/g/d Chase Freedom card, as well as the Dynamic category one.  Make sure you're getting the one which allows the categories to switch automatically, else the hybrid approach will not work.

In short, the strategy which works best for you will depend on your overall spending level, as well as the amount you spend in the various categories.  With a little planning, you can maximize your cash back.

A few thoughts on this from me:

1. Thanks again, Chris, for all your work on this.

2. I've attached Chris's spreadsheet at the bottom of this post so you all can download it and see if his analysis is correct. You can also use it to see what you would expect to earn from each of these cards based on your spending habits. (BTW, your results may vary based on your spending habits and total charged. For extra thoughts on this, see The Keys to Getting the Best Reward Credit Card for You.)

3. I use the Amex card as my primary card and the Subaru Platinum MasterCard from Chase as my backup. (I detailed why in What My Second Credit Card Does for Me.) But after seeing this, I'll probably switch to the Chase Freedom Visa card and use the dual strategy Chris recommends above.

4. It's no surprise to me that the Blue Cash from American Express (review here) card wins when you charge a lot on it. After all, the card was named the best reward credit card for "big spenders" by Money magazine.

5. At the highest spending level, the Amex card returns cash rewards of 2.17%! At the second highest it returned 2.19%! A couple thoughts on this: 1) these percentages are WELL ABOVE the "industry standard" 1% cash back and 2) these are also well above the 1.84% I earned last year. I need to do a better job of charging on/managing my card -- I'm leaving money on the table.

6. By combining the two, you earn a rebate of 2.61% on your total purchases -- a level that is simply phenomenal!

7. If any of you out there think you have a card/cards that can return more cash back, let me know. I'd love to let Chris have a crack at it! ;-)

Download amex_blue_cash_vs_chase_freedom.xls

$10k Challenge: Start a Blog

Here's another idea for those of you playing along with my quest to raise an additional $10k this year in income -- extra income outside my regular job. (The numbers I ran show that making this amount and socking it away year after year can yield quite a sizeable next egg.) What's the idea? Start a blog, of course! Here's what CareerJournal has to say about making money by having a blog:

Most self-employed bloggers take in between $2,000 and $10,000 a month from ad sales, says Henry Copeland, founder of BlogAds.com, a Web advertising concern based in Carrboro, N.C. The few that have huge audiences make significantly more, he adds. During election time, for example, a political blogger can bring in $20,000 to $30,000 a month, says Ken Layne, West Coast bureau chief for Wonkette.com, a political gossip blog owned by Gawker Media.

Ha! I wish it was that easy! ;-)

Then again, you can earn a decent side income with a blog -- if you do it the right way. For my thoughts on how to start and run a successful blog, check out How to Get Your Blog to 100,000 Visitors and Beyond.

Leverage Your Contacts for Business Marketing Success

The following is a guest post. See the end of the article for details on the author.

Starting a new business is always difficult, especially if it's a lifestyle and a professional change. New networks, new people, new experience, new learning curves, new opportunities, new failures...new everything!

Getting caught up in the newness of everything, we can sometimes forget about the luxury of current and former contacts, and taking full advantage of who and what we know. Just because you're in a new industry, doesn't mean your current and past relationships can’t be an asset.

As you consider your contacts, decide how you can best leverage your relationships in the most respectable and honorable way possible. You want to ensure that your contacts will benefit as well. Don’t make it all about you and your business. Ask about them, their family and consider ways you could benefit their business. Do you know anyone you could refer to them? Help others succeed, and they will help you succeed.

Be sure you never misuse or abuse your relationships. You do not want to tarnish your relationships or leave your contacts with a bad taste about your business. Remember, you do not have to ask old pals for hand-outs; ask them for support. Offer free samples, free consultations, free education and so on. If applicable, offer yourself as a speaker, consultant or expert in your industry. There should not be a hard sale to sell anyone; instead, share a positive view with confidence, grace and respect.

Never underestimate your startup and your self-worth. Lose confidence and it'll show. Be ashamed to promote your new business startup and it'll also show. Remember, your home business reputation is your personal and professional reputation. Don’t be afraid to tell others about how excited you are about your business. Your confidence and enthusiasm are sure to win many new advocates for you.

Dominate your market by being yourself--a leader of your new business start-up. This way, no matter who you meet, whether they are colleagues of your past or present, you're still a leading professional with confidence, enthusiasm and a winning attitude that draws people to you and your business.

Lesley Spencer Pyle is founder & director of HBWM.com, Inc (Home-Based Working Moms™), a professional association and online community of parents who work from home and those who would like to. She is also the author of The Work-at-Home Workbook.

The Keys to Getting the Best Reward Credit Card for You

Most of you know that I'm a big fan of the Blue Cash from American Express card (it earned me almost $500 last year) and use it as my main cash back credit card. But there are a lot of reward cards out there and I thought some of you might like to have some guidelines on how to find the best one for you. Here are my thoughts on the issue:

1. Decide what is most important to you. Everyone's different. Some people like cash (like me), others travel a lot and want airline points, and others have special interests in one area or another. This GREATLY impacts what reward credit card will be the best for you. So start the process of searching for your card by thinking through what reward you'd like to get.

2. Consider how you spend money. What you charge on your card can make a big difference in the reward you get. For instance, some cards give bigger rewards for spending at gas stations or grocery stores. If you charge very little at gas stations or grocery stores, it's likely these cards aren't for you. Review your budget or Quicken file and take note of the major purchases you charge to your current card.

3. Decide how much time and effort you're willing to put into maximizing your reward. It's highly likely that your absolute maximum reward will come from using a strategy that requires using multiple cards. But do you really want to deal with the hassle of getting, carrying and using a boatload of cards? Personally, I don't, so I carry two -- a main card and a back-up used in certain situations. You may be willing to deal with the hassle of using many cards, but you certainly need to consider the "hassle factor" before you decide on your strategy.

4. Be sure to minimize fees. In almost all cases, your best reward card will have no annual fee. There are exceptions, but if you have to pay for a card, you have to have some really, really, really great benefits from it to make it the best reward card for you.

5. Pay off the card each month. This should go without saying, but if you get a card and carry any sort of balance, it can quickly wipe out any rewards you earn. It's usually better not to have a card and forfeit the rewards than to use the card and carry a balance.

6. Consider where the card can be used. Some cards are accepted in more places than others. Visa and MasterCard can be used almost everywhere and American Express is used in most places (including Costco -- the only card they take), but others (Discover for instance) are accepted in far fewer locations.

7. Think of the ease of redemption. How you get your rewards can make a big difference. Some companies make the process seamless and simple (for instance, my card simply credits my account for the reward amount once a year) while others seem to be designed to make it difficult to get your reward (you earn "points" and have to go through 10 steps to actually redeem them.) No matter how much you earn, if it's a hassle (or impossible!) to get the reward, it just may not be worth the effort.

8. Charge all you can on the card. Once you have the above figured out and decide which card or cards are best for you, make the most of it (them) by charging all you can. Look at all your big purchases and see if there's a way to put them on your card. Look at regular, on-going purchases and see if you can pay these (with no cost) via credit card. Especially look at all those purchases that give you extra rewards (such as the gas and grocery store extras noted above) and be certain to get as many of those charged as possible. For a couple creative ideas, check out Can You Charge a Car on Your Credit Card? and Donate to Charity with a Credit Card.

So how's that list? Anything I missed or should change?

10 Tips for Avoiding Home Business Scams

The following is a guest post. See the end of the article for details on the author.

Starting a home business has become a wonderful and attractive alternative for parents across the country. With the advent of the Internet, email and cell phones, working at home has been a very viable option. No other alternative allows parents the opportunity to create their own hours and work around their children’s schedules while earning an income. But before investing in any home business opportunity, it is wise to take appropriate steps to research the opportunity and the company. Unfortunately, there are deceitful businesses ready to take advantage of parent’s deep desire to be at home with their children.

1. Research the company and always check them out with the Better Business Bureau (http://search.bbb.org/search.html) located in their city.

2. Ask for at least three references of people they have worked with. Call each person and ask about his or her experiences with the company.

3. Be cautious of any company that asks for money for a work-at-home job (such as money for registration, applications or instructions).

4. Don't be fooled by ads claiming you can make large amounts of money in short periods of time. And be cautious of companies that require you to sign up immediately. If it sounds too good to be true, it usually is.

5. Get specific information in writing from the company such as how long they have been in business, where they are located (not just a P.O. Box), how many customers they have, what their refund policy is (read it thoroughly), how long it takes to get paid and if there are any restrictions on payments, etc.

6. If you do invest in a business opportunity, use your credit card instead of cash. It may be easier to dispute the charges with your credit card company rather than trying to get your money back from a fraudulent company.

7. Research current scams on web sites such as ScamBusters at: http://www.scambusters.com.

8. Call the National Fraud Information Center at (800) 876-7060 for information or visit their web site at: http://www.fraud.org.

9. Report any scams or fraudulent companies to the Federal Trade Commission http://www.ftc.gov, your state's Attorney General and the National Fraud Information Center, PO Box 65868, Washington, DC 20035, (800) 876-7060.

10. Don't invest in any opportunity that you are not sure about. Instead, find something that you are interested in and will enjoy doing. (Do what you love, and the money will follow.)

Lesley Spencer Pyle is founder & director of HBWM.com, Inc (Home-Based Working Moms™), a professional association and online community of parents who work from home and those who would like to. She is also the author of The Work-at-Home Workbook.

Can You Charge a Car on Your Credit Card?

I've detailed how the Blue Cash from American Express card earned me almost $500 last year (and that's why I recommend it.) A key part to making the most on this card is to charge as much as you can on it -- and, of course, paying it off every month.

One idea I've wondered about is whether or not I could charge a car on the Blue Cash from American Express card. Bankrate thinks that a dealership probably wouldn't let me do this:

You're far more likely to have trouble finding a dealership willing to let you charge your new car on the credit card. That's because the dealership pays as much as 3 percent to the credit card company on every transaction. That's an additional 3 percent profit they would lose on such a big-ticket sale.

That's kind of what I thought. Though this does bring up a couple other thoughts:

1. I could negotiate a price for my new car using the method that's already saved me a ton of money in the past. Then, once we agreed on the price, I could whip out my credit card. When they balked, I could negotiate an even lower price.

2. I could have them let me charge a portion of the car on the credit card. Bankrate seems to think many dealerships will let people do this.

I'm not in the market for a new car, but I will be in the next few years. I'm going to keep thinking on these alternatives in the meantime -- I'm sure there's something here.

If You Win the Lottery, Take the Lump Sum

Note: If you're interested in making some extra money this year, check out our list of the best cash back credit cards as well as the best credit card bonuses. Used correctly, they can earn you hundreds if not thousands of extra dollars this year.

Here's some advice from Bankrate that says to take the lump sum payout if you win the lottery. The details:

The lump sum payout is, for most winners, the best choice. You know the tax consequences, you know the lump sum payout and you often have the opportunity to invest the proceeds to earn more than you could with the guaranteed return from the annuity payments.

But doesn't this aggravate the problem of people blowing their money in a year or two? If you take the payments, at least you know you CAN'T lose it all since you can't get at it all.

The piece also includes this bit of earth-shattering advice:

Playing the lottery isn't a substitute for sound financial planning.

I had to smile when I read that. But then again, some people actually think this is a good way to accumulate wealth:

A 2006 survey, jointly sponsored by the Financial Planning Association, or FPA, and the Consumer Federation of America, or CFA, found that about 21 percent of Americans believe that winning the lottery is the best way to accumulate several hundred thousand dollars. That number jumps to 38 percent of people with an annual income less than $25,000.

Oh my. I'm not sure where to start commenting on this one. I guess I'll just let it speak for itself.

But here are my questions for you all:

If you won the lottery (let's say $10 million), how would you take it (lump sum or in payments.) And what would you do with the money (save it, pay off debt, splurge?)

Isn't it fun to dream? ;-)

Interesting Facts on Making Money with Credit Cards

Parade magazine recently ran a piece on how to find the best credit cards for you. The article contained several facts/quotes that I wanted to highlight and comment on. Here's the first:

You need a card that matches your credit use. The best deal for your friend may not be right for you.

So true. What's the best card for one person won't always be the best card for someone else. A few of the factors that influence what's the best card for you: what rewards you're interested in, how much you charge, where you charge it, and how you pay off your charges.

Four in 10 Americans pay their balances in full every month.

Yikes! Think of the opposite of this -- six in ten Americans DON'T pay off their balances in full every month! Don't people know that paying off your credit card slowly can cost a fortune?

You typically get back about 1% of what you charge, or $50 for every $5,000 you spend.

That's right -- 1% is considered decent, average, typical. That's why I'm especially happy with my Blue Cash from American Express card. It made me almost $500 last year and earned me 1.84% cash back from my total purchase amount. Not bad, huh? It's almost double what's "typical." I'll take it.

For some more keys on making the most from your credit card, see these links:

• $10k Challenge: Make Money with Credit Cards

• 9 Keys to the Best Credit Card Rewards

• Making Money by Charging EVERYTHING on the Right Credit Card

Earn $1 Million by Not Watching TV

I saw this on Yahoo this morning and HAD to blog about it. The piece tells us all how to earn $1 million by not watching TV. How? First of all, here's the premise:

If you decided to give up TV and invested the money you saved, you would get that $1 million -- and probably a lot more.

They then detail all the costs you'll save if you stop watching TV including saving money on:

• TVs
• Entertainment cabinet system
• Cable
• Pay-per-view
• Movies
• DVD/DVR
• Gaming system
• Games
• Energy
• Commercials
• Opportunity costs

And using all these, they come up with this:

So what does this all add up to? Say you're 25 years old and you initially spend $2,000 for your TV, DVD player, entertainment cabinet and gaming system after getting your first job. Add in monthly costs of $100 for cable, $10 for electricity use, $20 for renting movies, $25 for buying games and $20 for an occasional pay-per-view event, and you're looking at $175 a month. Add in another $525 a month extra you spend due to the influence of commercials if you are the average person, and you are costing yourself $700 a month watching TV.

If you instead invested this money and received a return of 8% compounded annually over 45 years until you're 70 years old, you would have more than $3.7 million in your account.

Hmmmm. Seems like a pretty compelling argument to me. And even if you discount some of their monthly costs, it will still add up to a huge chunk of change in the end.

I've given advice on cutting out cable costs before, but this takes the idea to a whole new level. It's funny, because I was just thinking about this issue the other night when my son wanted the latest toy he saw on TV. I wondered, "If we NEVER watched TV, how much money would we end up saving?" I guess they answered it in this piece -- somewhere around $500 a month (though we're probably less since we watch far less than 4.5 hours of TV a day -- we probably don't even watch that much in a week.)

So, what's your take on this issue? Is it a legitimate concept or just unrealistic hype?

What Cash-Back Credit Card Pays 3%?

Here's a perplexing piece I saw from Bankrate the other day. It's an interview with their Frugal $ense winner for March (yes, I'm a bit behind in my reading) where he gives a tip on using credit cards and saving money. But one quote from the guy really stood out to me:

"But about a year ago I got a card that was paying 5 percent back on gas and 3 percent on everything else. I started charging everything on it just to get the cash."

Ok, I'll bite. What card pays back 5% on gas and 3% on everything else in cash? I'd certainly get it! (The piece doesn't say what card he's using. I suspect he had some sort of intro deal and it's since expired.)

The best deal I've found is the card I'm using now as my main credit card -- Blue Cash from American Express. It made me almost $500 last year and I'm hoping to beat that this year, but if there's something that can earn me a ton more, I'm all ears.

Any ideas out there?

$10k Challenge: Make Money with Your Own Sign-in-the-Yard Business

Here's another idea for those of you playing along with my quest to raise an additional $10k this year in income -- extra income outside my regular job. (The numbers I ran show that making this amount and socking it away year after year can yield quite a sizeable next egg.) What's the idea? Developing your own sign-in-the-yard business. Here's the whole story:

The other day I'm biking through a neighboring sub-division and I see this yard full of big smiley-face signs along with a sign that states "Smile! It's Kelly's first birthday!" There must have been 20 signs in the yard -- hard to miss for sure. Also in the yard was a smaller sign for the company that left the signs -- Flamingo Dave's.

Flamingo Dave's basically let's people rent signs and plastic yard ornaments and have them placed in other people's yards. These are to celebrate a birthday, graduation, or some other sort of special event (see various themes here). For an idea of what it looks like when in a yard, see these pictures.

Now it seems that a yard full of signs/flamingoes doesn't come cheap. Dave charges a minimum of $59 for a signing, but prices can get way up there if you really want to make it a big deal.

Ok, so get this:

1. There's not much cost to the business (a website and a small investment in some signs and a few flamingoes.)

2. You make a decent amount of money on each client.

3. Every time you do someone's yard it's a quite visible advertisement for your company.

4. Getting out the word-of-mouth ought to be easy -- simply do a few of these for free at some high-profile homes or businesses.

5. If you could do a couple a week, you could end up netting a few thousand dollars a year! Not bad at all!!!!!

$10k Challenge: Make Money Taking Pictures or Playing Music

I haven't talked recently about my quest to raise an additional $10k this year in income -- extra income outside my regular job. The numbers I ran show that making this amount and socking it away year after year can yield quite a sizeable next egg.

But recently I ran into the idea of a nice side-business that can actually earn you a decent amount of extra money: being a free-lance photographer.

Ok, let's side-step the issue of talent and experience for now. Of course, you'll either need to know what you're doing with a camera or learn. But if you do that, you could be in a position to earn some good money on the side. Here's what Career Journal says about it:

Amy Sussman, a free-lance photographer in Brooklyn, N.Y., says some of her jobs pay a flat rate, while others generate income only if her images are sold to a publication. Gerry Waite, owner of All Sports Action Photography in Ventura, Calif., pays his five full-time photographers and 20 or so stringers $10 to $25 an hour, depending on experience. He says his own earnings range from $70,000 to $200,000 a year.

This is a bit more up-scale than what I'm suggesting. I'm thinking you can start a side business taking pictures for graduations, birthday parties and weddings. If you can earn a few hundred dollars a weekend for a few weekends a year, you could make $2,000 to $3,000 in extra money this year. Not bad.

I don't know anyone who does this, but my cousin does something similar -- he runs a DJ business where he plays songs for parties (of all kinds) and weddings. He says he makes around $400 for an evening plus tips (which could be nothing or could be really good if he's doing an "older" group.) It's a great gig, lots of fun, and an excellent way to make some extra income.

More on How to Make Money with 0% Credit Card Transfers (And Five Reasons Not to Try)

As I wrote in How to Make Money on 0% Credit Card Transfers, I'm not into borrowing a ton of cash on a credit card at 0%, saving it for a bit, then paying it back and pocketing the interest. I have other money making options that involve less risk and more money. That said, I know several people who read Free Money Finance are either making money with 0% credit card transfers or interested in the topic. So when I saw this piece on MoneyCentral about making money with 0% cash offers, I knew I had to highlight it.

What this piece brings to the party is a bit of the detail that is required for a successful 0% credit card investing venture. In particular, here is their take on what anyone needs to do to make money in this venture:

• A good place to put the money.

• Zero percent interest on the borrowed money, or close to it. To make much money on these offers, there needs to be a decent spread between the interest rate you're paying and the interest rate you're paid.

• Offers that let you borrow money without triggering cash advance rates.

• Offers that come with no or very low fees.

• Credit cards that you don't use for any other purpose.

Like I said, too much time, effort and even risk for me. But for some people, it's a decent way to make a few thousand extra dollars a year.

The piece ends with five times when a person should not even think of trying this method to make money. If any of these apply to you, you should definitely stay away from 0% credit card transfers:

• "I already carry some credit card debt."
• "I don't have an emergency fund."
• "I bounced a check or paid a late fee in the last year."
• "I'll soon be in the market for a major loan, like a mortgage or a car loan."
• "My credit isn't that great, and the credit limits on my cards are low."

Anyone out there making good money doing this? Anyone try it and get burned? Anyone like me and would rather focus on other efforts to make money?

American Express Blue Cash Card Named Among Top Cards by Money Magazine

Money magazine's June issue names the Blue Cash from American Express credit card as the top card for people who are "big spenders." The translation of this is: if you charge a lot, this card can make you a ton of money.

The review talks about the lower level of rewards on the card being modest (which is why I asked for ideas recently on how to get to the top level faster) but then raves about the card once the top level is reached. It says:

On spending above that [above $6,500], things get pretty appealing: You'll receive a fat 5% on the purchases specified above [supermarkets, drugstores, and gas stations], and a still-decent 1.5% on all other transactions. And since AmEx likes people riding high on the hog, there's no cap on the rebate no matter how much you spend.

As many of you know, I use and LOVE this card (last year it made me almost $500 after making me $330 the year before.) This year, I'm going for $700!!!!! ;-)

For more thoughts on the Blue Cash from American Express credit card, see these links:

• Why I Use Blue Cash from American Express

• More Reasons to Love Blue Cash from American Express

• The Best Credit Card for Making You Money

Donate to Charity with a Credit Card

In How to Get to the Top Tier of American Express Blue Cash Quickly I asked if readers had any ideas how I could quickly get to the second tier (and higher earning rate) quickly on my Blue Cash from American Express card. (Last year the card earned me almost $500 and I want to make even more this year.) I have almost all of the responses covered so far, but this one was an interesting thought:

If you were planning to give money to a charity see whether you can donate by credit card.

I do have charitable gifts each year and they add up to a decent amount -- currently I've been using my gifts to help reorganize my portfolio and save on taxes. But once this is done, I could give my gifts via credit card and get to the second tier much faster. But I have a concern doing this -- doesn't the charity get dinged for the 1-2% processing fee charged by the credit card companies? If so, I don't think it's worth it for me to charge a contribution -- it penalizes the charity simply so I can earn more money on my card. Seems counter-productive to me.

Anyone know anything about this issue and if the charity takes a hit if people give via credit card?

How to Make Money on 0% Credit Card Transfers

Here's a comment left on my post titled $10k Challenge: Make Money with Credit Cards about how to make money on 0% credit card transfers:

Another way to earn a bit of cash by way of credit cards is via 0% balance transfers.

Most credit card companies will transfer the money to your personal bank account when you provide the account and routing numbers. The best case scenario is no transfer fees. This usually comes with new cards only. Right now I do not want to open new accounts so I use my current accounts and I have gotten 0% from cards I already have. I have even gotten .99% and 1.0% APR balance transfers from old accounts. Some have fees like 3% for the transfer fee. This is where you must be diligent. If there is a decent cap like $29, $75 or even $99 and the math works in your favor I say, "Go for it!" It all works out when the math is right.

Have the money deposited into a high yield interest rate account like Emigrant Direct (5.05%) or ING Direct (4.50%). The other thing you can do to take things a step further is to take most of the money, all that is not needed to pay the monthly minimum, and put that cash into a CD account. Timing is everything. You must be aware of when the 0% transfer rate ends and make sure your CD maturity date ends before that. Indymac has great CD rates. ING Direct now has interest bearing internet checking that offers free bill pay. I used it to pay the monthly credit card minimums in a timely, efficient manner. It's very easy. The interest rate is 4% to 5.30% depending on the balance.

All this money is taxable. I say if you have all that credit available to you, you may as well earn a bit of extra cash towards your goal if you are so inclined. I added over $700 net to my goal last year beginning in June and ending in December. I am doing it again this year and hope to add at least $950 net to the goal.

It may seem a bit complicated, but for those of you who like a bit of a challenge and like seeing the money come in rather effortlessly once things are set up, I say, "Welcome to the club and good luck."

I've seen numerous articles talking about how to do this. Personally, it's not something I'm up for. Here's why:

1. The earning potential isn't that much. You're making a few percentage points and that's it. Let's say you borrow $25,000 and earn 3% after costs. That's $750. Now $750 isn't that bad but...

2. ...it takes a ton of time, attention, and management. For me, it's simply a ratio of time to earning potential. Too much effort for too little return.

3. I don't like messing with debt to make money. It's just a personal preference, but I don't like debt of any kind -- especially $25,000 on a credit card!!!

4. I use credit cards to make money in other ways -- doing something I'd do anyway (like shop, eat, etc.) Last year I earned almost $500 doing this with no additional time commitment or debt incurred at all!