Cashing In On Cash Back Credit Cards

I know, I know...

I told you credit card debt was bad. And it is. You don't want it if you can help it. And if you have it, you want to get rid of it as quickly as possible.

But...

What if you could use your credit card to make a little extra money each month and not rack up credit card debt? How cool would that be?

It is possible. But it takes the right kind of card, the right kind of purchases, and the will-power to not go deeper into debt.

First the card.

You'll need a credit card that pays you cash back on purchases. These are credit cards that pay you back cash - real dollars and cents - for making purchases with their card. Typically, you will earn between 1% to 6% of each transaction, depending on the card you use. Some cards pay a flat rate on every purchase. Others pay more for certain types of transactions (gas for example) and less for everything else.

Next the purchases.

You will need to know what types of transactions earn cash back. While many do give cash back on everything, others are more selective. The most common are groceries and gas. But I have seen cards give cash back on everything from transit costs to streaming. Others will give a low flat rate on any purchase and bonus rewards on other purchases such as restaurants. There are even cards that change the categories for cash back purchases periodically. So in January you might get cash rewards on gas and groceries and in April it's travel and dinner.

Now comes the will-power part.

Once you have your cash back credit card and you know which purchases qualify for cash rewards, you use the card to make those purchases. If it pays cash back on everything, you use it for everything. If it's groceries, you use it everything time you go to the grocery store. Then, and this is where the will-power comes in and it's important, you pay the entire credit card balance. Every month. Without fail. It doesn't do any good to earn 1% cash back if you're paying 18% interest on your balance. You absolutely MUST pay off the entire balance each and every month.

If you pay off the balance every month, you can collect the cash rewards without paying any interest on your purchases. And that adds up to money in the bank. Use that extra cash to add to your emergency savings. Or place it in your regular savings if you already have your rainy-day stash fully funded.

Passive Real Estate Investing...Is That A Thing?

If you're like me, you've had a rental property before...and quickly sold it, swearing "never again!"  

But what if you could invest in commercial and residential real estate without having to any of the actual work involved in managing your property? Sounds too good to be true, doesn't it?

Surprise! This is actually a viable way to earn some extra income. In fact, it can be one of the most powerful ways to put your money to work.

There are a TON of companies that give you the ability to invest in commercial and residential real estate projects without having actually to do any of the heavy lifting yourself. It's called passive real estate investing, and it's a real thing. And at the end of this post, I will give you the two companies I found that appear to be among the best. 

But first, what is passive real estate investing?

Put simply, passive real estate investing is investing in real estate without any real hands-on effort from you. No rent collecting. No property management. No maintenance. Nothing. You don't have to deal with tenants or 2:00 AM phone calls about noisy neighbors or leaky faucets. No active participation whatsoever.. And no, I'm not talking about buying the property and then hiring a property management firm to manage it for you.

I am talking about investing in a Real Estate Investment Trust (REIT). 

REITs are companies that invest in income-producing real estate. They give you the ability to invest in real estate without having to purchase and maintain the actual property. And you don't have to deal with tying to get financing through a bank. We all know how time-consuming and stressful that can be! Through an REIT, you can often get started investing in real estate for as little as $500. 

Real estate values tend to appreciate over time. Rents also tend to rise over time. And real estate tends to be less volatile than stocks or bonds. Then there are the tax benefits related to real estate investing. Investing in an REIT can be a good strategy to generate passive income. 

Of course, real estate investing does come with risks, as does any form of investing. If the value of your property portfolio goes down or the housing market in general declines, you can lose your investment. So always do your due diligence and research before making any investment. No investment can guarantee you either a return or even protection of all your principal. And if they say they can, you might want to walk away. But overall, real estate has proven to be a highly stable, lucrative investment. And an REIT allows many people who couldn't otherwise afford to purchase income-producing properties an opportunity to invest in real estate. 

I am not an expert on REITs or passive real estate investing. Before you decide to invest, I would find someone with real knowledge of real estate. I have done some research though and have found two REITs that have decent reviews. I am not an affiliate for either of these companies. Both have their pros and cons. 

Fundrise: Founded in 2012 and headquartered in Washington, DC, Fundrise is one of the leading real estate investment platforms.

DiversyFund: With a $500 minimum investment and no management fees, DiversyFund is a low-cost entree into the often high-roller world of real estate investing. 

If you have often dreamed of being a real estate mogul, or if you're just looking for a way to add some passive income to your financial strategy, investing in an REIT might just be for you. 

A Financial Accountability Partner? You Got To Get One of These!

 

My husband does it for me. And I do it for him. We it do for each other regularly...

We each are the other one's financial accountability partner. That means we check in with each other regularly about our spending, saving, and budgeting. Knowing he has to talk to me about the set of new pipes he wants for his bike or that I have to confess that I spent a bit more than expected on new flowers for the garden really helps us keep on track with our financial goals.

I can already hear some of you rearing up in indignation. Why should I have to be accountable to my spouse about my spending. I make my OWN money! It doesn't have to be your spouse. A financial accountability partner can be anyone who agrees to help encourage and support you and ensure that you are keeping on track with your financial goals. But here's the reasons why it works well for us as a couple.

An accountability partner of any sort is usually a two-way relationship. Like your workout buddy at the gym. You're both helping each other meet your goals. And when you're both accountable to each other it can actually help strengthen your relationship. Plus our individual financial goals directly impact our family financial goals. So it just makes sense that we work together to keep each other on track.

I realize that not everyone has the kind of relationship my husband and I have. If you are looking elsewhere for a financial accountability partner, there are some traits you should look for.

1. You will be discussing your financial goals and perhaps even your current financial status. So you will want to be sure your partner can be trusted with this information. 

WARNING!!! Your partner does not need to know your bank account number, SSN, or have access to your credit card or bank statements. I don't care how much you trust this person. If they ask for this information, look elsewhere.

2. Your partner must be able to be totally frank and honest with you. If they are afraid to call you out for slacking on your goals because they fear it might damage your friendship or make you angry, they are not a good partner. (On the flip side, you need to remember that your partner is truly trying to help you reach an important goal...and at your request. It does a great disservice to both of you if you get defensive or angry when they hold you accountable.)

3. Your partner has to be available. That means they need to have the time and the desire to help you. If they don't understand the importance of your efforts, or they don't have the time to talk to you regularly, they are not a good fit. 

4. If it's a family member, you need to be sure they are able to give you honest feedback. If your (adult) child or sibling is acting as your financial accountability partner, it is imperative they have nothing to gain or lose by you meeting your goals. 

Once you have selected your partner, it's important to establish some guidelines. You can write a formal agreement which you both sign. Or you can simply discuss the details of your new relationship. Whatever works for you! Just be sure you include details like how often will you discuss your goals. Will you meet in person or will it be via phone or Zoom? You might even want to create an agenda for these meetings. Again, whatever feels comfortable for you and your partner.

Do make sure your partner is fully aware of what you are trying to accomplish. Which means you need to be sure of your goals. I'm sure you've heard of SMART goals. If not, Google it. You'll find all the help you need to create Specific, Measurable, Attainable, Realistic, Time-Based financial goals for yourself.