arf30 wrote: ↑
Thu Oct 10, 2019 9:16 am
After doing a few of these, I decided the mental hassle of tracking a bunch of extra accounts and having to leave money sitting in them for X amount of time wasn't worth a few hundred dollars here and there.
Back in the day (1982 - 1984), interest rates were 15%. Banks would offer bonuses for 18%. I would drive to bank A, pull my money in a cashier's check, and drive to bank B and get a 20% increase in interest. 20%!
However, 20% is only relevant, to me, when it's big dollars. If I have a 15% rate on $100,000 for a year, I get $15,000. An 18% rate gets me $18,000, so I've gained $3,000. That's interesting.
When rates are 1.8%, and a 20% higher rate is 2.16%, that's the difference between $1,800 and $2,160 in a year. So for the same energy that I used back in '82 - '84 to get $3,000, I could now get $316. $316 whole dollars. Note - simply interest is used in the comparison for easy of explanation).
To do this today I don't even need to drive. I need to a) unlock some credit reports, b) apply for an account, c) ach money and lose interest during the movement, d) ensure that the bank pays me the rate they promised and when they don't, fight for it, e) remember to pull the funds when the rate drops, f) ach the money again and lose interest... g) setup the account in Quicken, h) track yet another 1099 for taxes
Well, I've lost interest.
When we fully retire in 2021, I plan on spending some time looking at maximizing credit card bonuses as well as maybe bank bonuses, and carefully track these things:
- the absolute dollars I make
- the amount of time that it takes to make these dollars
- what I didn't do during that time that I could have done, time I will never get back
Edit - I did take advantage of the October 2018 promo that Ally had, where you got up to $1,000 per person for moving funds to Ally. I had funds at Vanguard in Prime Money Market due to a higher rate, moved them to Ally (already had accounts) and qualified for the bonuses, plus I changed the Raise Your Rate CDs 3 or 4 times to ratchet the rates up. That was worth it in absolute dollars.
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