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Golden Rules for Making Money (1880)

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Re: Golden Rules for Making Money (1880)

#151

Post by ascar »

ska wrote: post #137
dr_dshiv wrote: post #120

Earlier quoted context omitted.

In the Netherlands, credit cards aren't widely accepted because the local debit card system has no transaction fee. Without 3% card fees, the consumer prices are lower, so the whole country saves extra money.

In north america, I think they mostly (still?) aren't allowed to offer differential pricing - by law - which helped the rise of credit cards. There has been a lot of back and forth on this in law so YMMV depending where you are.

It's not about differential pricing. If a vendor has to pay x% on a majority of purchases, he will just increase the price for all purchases. So without CC everyone pays less, while with a majority CC customers, everyone pays more. While CC payers get some of that additional cost back as reward points. Overall everyone would be better of without CC though.

Re: Golden Rules for Making Money (1880)

#152

Post by I_complete_me »

canaus wrote: post #51

> We are all, no doubt, born for a wise purpose. I've heard and seen this time and time again and yet there's no advice on how to find that purpose. It's always easy to say, "do what you love" but how do you find what you love?

I am trying to get through the book "What is your WHAT?" by Steve Olser. It may be his way of making money, not sure what it will do for me. I also looked at the Goodreads website to see what other people who read this book recommended. Hope this helps.

Re: Golden Rules for Making Money (1880)

#153

Post by phlo »

ska wrote: post #135
billfruit wrote: post #134

Earlier quoted context omitted.

In some countries there are no additional fees if you pay with credit card.

Really? How would that even work? Somebody has to pay the transaction costs...

I'm not aware of any countries where no fees at all would be levied, but to provide two examples from Europe:

- In the EU, interchange rates are limited to 0.3% [1] for credit card transactions at physical terminals ("card present transactions"). That's not free, but it's an order of magnitude below US levels. Caps for other payment methods (card not present transactions and transactions made with debit cards) range from 0.2 to 1.5%.

- Some banks, or groups of banks, operate their own schemes (i.e. payment processing networks competing with Visa and Mastercard), and generally achieve lower fees. See [2] for one example where the price per transaction starts at $0.23 and goes down for transactions below $10, and for customers processing more than 10k transactions per year.

[1] http://europa.eu/rapid/press-release_IP-18-6655_en.htm

[2] https://www.postfinance.ch/en/business/products/accounts-rec...

Re: Golden Rules for Making Money (1880)

#154

Post by sk5t »

moorhosj wrote: post #65
derekp7 wrote: post #38

Earlier quoted context omitted.

Are mortgages really debt though? Because even though you owe, you also own as much as you owe (except during a market downturn of course). Whereas debt for a depreciating asset (like a car, or most things that go on a credit card) are what I would consider "real" debt. In other words, keep your net debt low or non existent (when looking at a balance sheet).

==Because even though you owe, you also own as much as you owe (except during a market downturn of course).== Do you own that much? Let's put some real numbers on this. You buy a $350k house, and put down $70k (20%). That leaves you with a $280k mortgage at 4%. This gives you a monthly mortgage payment of $1,337. If you pay that monthly, you would own 51% of the house ($175k of equity) some time in the 16th year of y…

I suspect the parent is talking about leverage; and, your view of cumulative mortgage payments ignored the time value of money.

Re: Golden Rules for Making Money (1880)

#155

Post by gcb0 »

billfruit wrote: post #109

One modern trick to earn a tiny bit of extra money: Use credit cards for buying/paying anything at all, never use debit cards or cash: Credit cards usually pay a small reward point for spends which can often be redeemed as a cash discount later, and also since the expenses go to the credit card, the cash in the savings account stay untouched till the day you make the credit card bill payment, which will keep earning…

that's a prisioner dilemma, actually.

Use credit card today, and you save some negligible money today, while prices go up since the fee is now a sure requirement for all vendors.

Avoid credit card like the plague, and operators will have a harder time justifying 3-12% fee from vendors, lowering prices for everyone in the long run.

Re: Golden Rules for Making Money (1880)

#156

Post by billfruit »

kovrik wrote: post #128
billfruit wrote: post #109

One modern trick to earn a tiny bit of extra money: Use credit cards for buying/paying anything at all, never use debit cards or cash: Credit cards usually pay a small reward point for spends which can often be redeemed as a cash discount later, and also since the expenses go to the credit card, the cash in the savings account stay untouched till the day you make the credit card bill payment, which will keep earning…

What about fees? Not sure about US, but I think in NZ all credit cards with cashback have fees. And I remember there was a research or something concluding that you had to spend at least ~$3000 (don't remember exactly) per month using cashback credit card to break even. Also, credit cards are not accepted everywhere. And often there is a minimum transaction amount as well.

Even without cash back, the interest earnings could be something, a 1000$ deferred payment made through credit card may give 4$ to 5$ interest payment(assuming an interest savings interest rate of 5%, some countries have much higher interest rates), while that cash is sitting in the savings account, waiting for the credit card billing cycle to complete.

Re: Golden Rules for Making Money (1880)

#157

Post by nightski »

torpfactory wrote: post #130
kovrik wrote: post #128

Earlier quoted context omitted.

What about fees? Not sure about US, but I think in NZ all credit cards with cashback have fees. And I remember there was a research or something concluding that you had to spend at least ~$3000 (don't remember exactly) per month using cashback credit card to break even. Also, credit cards are not accepted everywhere. And often there is a minimum transaction amount as well.

In the US we have a much better system. The overwhelming majority of buyers spend ~3% more on every purchase and then wealthy cardholders who can attain the requisite credit ratings for rewards cards are given a cut of this 3%. The rest of it goes to the card companies bottom line. A truly magnificent system. /s

You don't have to be wealthy to have a good credit score and/or a rewards card. It's pretty easy for anyone to get a decent rewards card nowadays. In fact I'd say the system is more perverse in that it rewards good credit to those who are slaves to credit, not those who are fiscally responsible.

Re: Golden Rules for Making Money (1880)

#158

Post by zamfi »

ska wrote: post #137
dr_dshiv wrote: post #120

Earlier quoted context omitted.

In the Netherlands, credit cards aren't widely accepted because the local debit card system has no transaction fee. Without 3% card fees, the consumer prices are lower, so the whole country saves extra money.

In north america, I think they mostly (still?) aren't allowed to offer differential pricing - by law - which helped the rise of credit cards. There has been a lot of back and forth on this in law so YMMV depending where you are.

I'm not pointing this out to be pedantic, but because I think it's interesting: it was actually not by law that merchants were not allowed to offer different prices for cash vs. credit card purchase, it was by contract.

That is to say, in the merchant agreement required to accept credit cards, merchants promised to the credit card companies that they would not charge users of credit cards more than cash payers.

As another poster points out, this anti-competitive bullshit was made illegal by law circa 2012.

These kinds of coercive/collusive agreements among a cartel of providers of a particular type of service worry me deeply, especially when a previously-luxury service (e.g., credit cards) becomes semi-necessary infrastructure for operating in the modern world. For more on this type of problem, I encourage you to read about the unbanked [0] and the challenges they face.

Despite how much better they make my life, I also look at the success of Uber, Lyft, AirBnB, and other platforms with worry, precisely because they are in many cases creating semi-necessary infrastructure in the private domain. Individuals can already be banned from Uber [1] and Lyft (and Google [1], etc.) without any legal recourse, which also means by mistake because you are treated as guilty until you can prove your innocence, and innocence is usually impossible to prove.

Here's one (hypothetical and admittedly unlikely) future I worry about: autonomous cars rule the world, 99% owned by four companies (Uber, Lyft, Waymo, ???) that provide Uber-style transportation services. There's no public transport anymore (all outsourced to those four, it's much cheaper than dealing with public transit unions!) and so to get around more than walking distance requires being in the good graces of at least one of those four companies.

Poor John takes a ride in an Uber, gets sick from something he ate in earlier that day, and makes a mess in the car. Uber bans him for this infraction, and shares his name on a ban list (e.g., credit reports) so now John is banned from transportation, and has no recourse (e.g., Google's Gmail bans) -- for the simple mistake of eating undercooked scallops, John is now royally fucked because our infrastructure is outsourced and our society has no say.

I don't expect this future to come about. I expect heavy regulation of these semi-necessary infrastructure companies, and I expect it will come soon. GDPR is one example of this pushback, perhaps not the best example. But I welcome more.

[0]: https://en.wikipedia.org/wiki/Unbanked

[1]: https://www.elliott.org/problem-solved/i-am-banned-by-uber-c...

[2]: http://www.jonasblog.com/my-gmail-account-got-deleted (among many)

Re: Golden Rules for Making Money (1880)

#159

Post by Nition »

timClicks wrote: post #144
kovrik wrote: post #128

Earlier quoted context omitted.

What about fees? Not sure about US, but I think in NZ all credit cards with cashback have fees. And I remember there was a research or something concluding that you had to spend at least ~$3000 (don't remember exactly) per month using cashback credit card to break even. Also, credit cards are not accepted everywhere. And often there is a minimum transaction amount as well.

The fee for the ANZ Cashback card is around $200, so you need to spend around $20k/annum to break even.

It's $60 with a cashback cap of $300/yr (i.e. only the first $30,000 spend is counted), or $125 for unlimited cash back.

Still not great, but it's only $6000 spend to break even on the lower-tier card. Buying groceries each week will be close to covering it.

----

Edit: Oops, it's more complicated as it's not always 1% cash back:
It's not a marginal rate like taxes, so break even point is at exactly $10,000 when your payout jumps from $50 to $100.

https://www.anz.co.nz/personal/credit-cards/cashback-visa/

Re: Golden Rules for Making Money (1880)

#160

Post by Abundnce10 »

kovrik wrote: post #128
billfruit wrote: post #109

One modern trick to earn a tiny bit of extra money: Use credit cards for buying/paying anything at all, never use debit cards or cash: Credit cards usually pay a small reward point for spends which can often be redeemed as a cash discount later, and also since the expenses go to the credit card, the cash in the savings account stay untouched till the day you make the credit card bill payment, which will keep earning…

What about fees? Not sure about US, but I think in NZ all credit cards with cashback have fees. And I remember there was a research or something concluding that you had to spend at least ~$3000 (don't remember exactly) per month using cashback credit card to break even. Also, credit cards are not accepted everywhere. And often there is a minimum transaction amount as well.

The Capital One Venture Rewards card gives me 2% back on all purchases (I'm in the US). It comes with a $60 per year fee. So, if I spend more than $3,000 on the card over the course of the year it's a net positive. Now, they have access to all of my purchase data but I get around $700 every year to spend on travel. I've weighed the costs/benefits and it's worth it to me.
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