In Aaron’s second guest post, he shares how he gets rid of his excess stuff and how he maximizes credit card rewards. Enjoy!
I hope everyone had a great holiday season! If you’re like many Americans, you probably got a bunch of gifts. A bunch of stuff. We all have too much stuff. The concept of “less is more” in reference to physical goods had always floated around in my mind but just a few days ago Art of Manliness actually came out with an article fleshing out that idea.
From that article, “Via negativa is a Latin phrase used in Christian theology to explain a way of describing God by focusing on what he is not, rather than what he is; understanding Deity’s positive qualities is a task deemed impossible for the finite minds of humans.” The article goes on to list things like bad habits, toxic relationships, and stupid decisions as negatives in your life you should negate.
In my own fiscal interpretation of Via Negativa, I see the benefits as two-fold. First is the negation of a negative, resulting in a positive. And second, is the resulting simplification of your stuff which brings peace of mind. Here are a couple examples:
- Smoking has got to be one of the most fiscally irresponsible things you can do to yourself. According to the American Lung Association, the average retail cost of a pack of cigarettes is $5.51, but the cost to society and the state’s economy (and your health) is $18.05 per pack. PER PACK. By getting rid of this bad habit you save plenty of cash, time, and most importantly, health. I’m glad most of my friends don’t smoke.
- Morning cups of coffee add up real fast, in both dollars and calories. I know people that get a cup of Starbucks every single day. At ~$5/cup, 50 weeks of coffee adds up to $1250 a year in post-tax…coffee. That’s about how much my entire 10 day trip, including flight, accommodation, 5 day hike, food, etc to Peru cost me. Moreover, once you start adding sugar and creamer, those things pack calories. You need to walk an entire football field length to burn off a single four calorie m&m. Have fun with the new 180 calorie flat white.
- Finally, if someone is using self-storage, they quite literally have too much stuff. I don’t think I need to go into too much detail with this one, but Rick Warren, the pastor of the megachurch Saddleback, who by the way has paid back all his past earnings as a pastor, and now tithes 90% of his earnings, once asked something along the lines of “do you know why I never have to worry about scraping the barnacles off my yacht or where to garage my sports car? Because I don’t have either of those!”
I’m sure there are plenty of other examples. Lately I’ve been selling a bunch of stuff on eBay and Amazon. A bunch of old useless stuff lying around my place that I don’t use anymore that is. eBay takes a little more effort, but they take a smaller cut. I like Amazon because you list your items, pack all your junk in a box, ship it to Amazon, and they take of all the warehousing and shipping from thereon out. They even offer Prime shipping on your items. Declutter and simplification while making money? Sign me up!
I view holding a bunch of cash, touching cash, and spending cash as bad. One way to remove this bad (and make money that I teased about in my previous post) is by using credit cards! Just the other day I had a meal with a friend. To pay, she pulled out a debit card and upon learning she didn’t own a credit card, I immediately berated her for all the free money she was missing out on! Let me explain. At minimum, credit cards give you 1% cash back, meaning for every dollar you spend, you get one cent. If you spend just $15,000 a year for the next 50 years on your credit card, you’ll have spent $750,000. 1% of that is $7,500, tax free! I personally hope to spend a lot more than $750,000 in my entire life. This is the easiest scenario. If you’re willing to diversify a bit and spend just a little brain power managing a couple more credit cards, here’s what cashback I get:
- American Express Blue Cash Preferred: 6% CB on groceries (you can buy giftcards, including Amazon gift cards at the grocery store =P) and 3% on gas
- USbank Cash+: 5% on two categories of your choice
- Citi Double Cash: 2% on everything
- US Airways Dividend Miles: (Shameless plug that I get 10,000 miles for referring someone) 50,000 mile sign-up bonus which is enough for one international round trip flight or two domestic round trips. There is an $89 annual fee, so simply cancel the card after you get your miles. $89 to fly anywhere in the world? WORTH IT.
There are people out there that go even further with this and manage to pay rent, utilities, etc with their credit cards and other blogs begin talking about time value of money and more complicated things like that. Try searching “manufactured spending” if you’re interested. I personally don’t spend too much time doing manufactured spending, but I do always offer to put a group tab on my card and collect cash later. I get credit card rewards and never need to go to the ATM!
Not only do you earn tax-free dollars and free flights from credit card usage, but it simplifies your record keeping (it’s all electronic, automatic, and often times includes spend-analysis tools), and it reduces your liability! If you’ve ever lost or had your wallet stolen, that cash is gone. When you use a credit card to buy things, you don’t have to touch dirty money, and cards often have added benefits like extended warranty, extended return period, price protection (if the price of something drops after you buy it), car rental insurance, and so much more. If you’re not happy with a purchase, complain to your credit card company; they’ll take care of you.
Via negativa: remove the bad and thus increase your good.
Click here to see Aaron’s first guest post!