Lazy Investor

Here is my Net Worth Update:

Although I have been aggressively paying down my credit card balance, I am still down from last month by 1.76%. Thanks to the recent market turbulence!!

I was sick for the last couples of days and had been hospitalized for three days. Rest at home now, will be back.

Most of the credit cards offer the maximum 1% cash back for the purchased made. The highest one I have seen and got is the American Express Gold Credit Card. It was by invitation only before and has just began to accept the application from general public recently. Here is the details:

American Express Gold with 2% Cash Rebate (tiered)

Cash Rebates paid in January (once per year):
$0 – $2,500 = 0.5%
$2,500 – $5,000 = 1.0%
> $5,000 = 2.0% (no need to carry balance to get the 2%)
Added Bonus of 0.5% if you carry balance (so you could get upto 2.5% cash rebates)

Sign up through: 1-800-268-2639.

Credit Card information is not available on the AMEX website

- MINIMUM $30,000 annual income required to apply for this card
- Just remembered, there is also no maximum rebate… the sky’s the limit. i.e. If you spend $200,000, you’ll get $3937.50 back

Cash rewards calculator/comparison:
http://www3.telus.net/CalgaryBen/

Note that since this card is tiered, basically you have to spend more than $6250 per year to get better cash back than the Citi Enrich Card.

I applied for this card a month ago and now just wish more places will accept American Express.

I have just finished reading The Automatic Millionaire by David Bach. I think this book delivers two major concepts: 1. Pay yourself first before paying anybody else; 2. Make it Automatic otherwise you will fail. Other than those two points, I don’t think you can get much more valuable knowledge from the book.

I really like the idea of making it automatic and truly believe that you will fail if you don’t. Most of the time, budgeting does not work for personal finance. You try to budget yourself this much for food, that much for entertainment, etc. And probably end up going way over your original budget. Making the saving automatic is a great idea. With the ASP these days, implementing it could not be easier. For me, I automatically transfer 10% of my pre-tax income into a separate mutual fund account(I like to put it into purchase the mutual fund because it is relatively much difficult to get it out than a saving account) and not allow myself to touch it. Also, I am transferring another 3% into my savings account as an emergency fund. If the amount in the savings account gets too big, I will transfer it out to buy some non-registered investments. Usually, I keep $1000-$2000 in my savings account as an emergency fund. Anything other than those 13% becomes the disposable income. If I can save more, great! If not, I am not too worried. Life is about enjoying it, having fun rather than dying loaded anyways.

I have been doing this for almost a year now. It hardly has any impact on my life. I mean I still go on travel, have fun, work out in the gym, and eat good and healthy food( not necessarily expensive food though). Now it is more like a bill to me. Sometimes I am so mad at myself because I did not save anything in a particular month. I totally forget that 13% of my pre-tax pay are savings, not a BILL.

If you do the math, say your pre-tax income is $35,000, 10% of it will be $3500. You will need to save around $292 per month. 20 work days in a month with 8 hours each day, you will be only paying yourself $1.825 per hour if you save $292 each month.So pay yourself first before paying anybody else and make it automatic because you are worth it, don’t you think?