As the World Churns

As a physician there’s the pervasive concept of continuing medical education. Because medicine is scientifically-based, and science is constantly evolving and changing, in order to practice current medicine you must continue to learn long after you’re done with your formal training.

So we doctors peruse scientific journals, we have journal clubs, we go to societal conferences, we study for and retake our boards, and we visit thought leaders in our respective fields.

But it seems to me, of late, that there’s another sort of CME that is also quite important.

Continuing Miles Education.

It is a truism that the miles game is ever-changing. And even as one door closes another will open. But it seems to me that lately lots of doors of been slamming shut even as new ones have been swinging wide open.

Call it the spring thaw.

Vanilla reloads have become obsolete. Airline currencies of been devaluated. Credit card companies have made previously churnable cards unchurnable.

But it’s all part of the game. And there are several exciting new developments that have piqued my interest.

Which is exciting and fun. This is what makes the miles game constantly entertaining.

So here are three new angles on meeting minimum spend requirements that have me very excited.

1. Shifting To Serve.

For all of you previous vanilla reload/bluebird users, today’s article from frequent miler should have you very interested. I’m certainly interested.

The keywords here are “Green Dot Moneypak” and “American Express Serve.”

I’m very excited that Walmart might become a destination of the past for me. (Note: you can not simultaneously hold Serve and Bluebird cards.)

2. Evolve money.

I’ve referenced this one before. It’s kind of a pure form of shifting your spending towards your credit cards.

Essentially the way it works is that you use your credit cards to buy Visa gift cards. Then use your PIN enabled Visa gift cards to pay your bills via evolvemoney.com. I previously mentioned this as a neat way to fund the 529 from New York State.

The downside is that you can’t pay credit card companies by this method yet. But it’s worth checking out for mortgage or car loan companies.

3. Investing by credit card?

Brad from richmondsavers.com alerted me to a tremendous opportunity from a new company called loyal3.

The angle here is that you can buy stocks with your credit card. And if that’s not thrilling, I don’t know what it is.

For me this is kind of the holy Grail of manufactured spending. Because it’s not really manufactured spending at all. It is simply spending that I already do (investing) with my credit card.

I frequently put new money into the stock market. Every time I save money on a plane ticket. Every time there is a little bit of extra money leftover from my paycheck, I plug it right into the stock market. So getting an instant 2% dividend in the form of cash back or airline miles every time I put money into the stock market is a very exciting concept to me.

The loyal3 set up is this: you can buy fractional shares In any of 50 individual stocks of popular companies and there are no trading fees to do so. And you can execute all of your trades by credit card.

So the upsides are obvious.

1. Investing without any trading fees.

And

2. Investing by credit card. (which should give you a minimum 2% return on investment with your initial transaction)

But what are the downsides?

1. It ain’t passive investing.

Unfortunately you cannot buy ETFs (Mutual funds traded on the stock exchange) only individual stocks, so there’s going to be some degree of uncompensated risk (risk that can be diversified away) that you are exposing yourself to.

2. It’s tax inefficient.

Every time you sell a stock that has made a gain you will pay a capital gains tax on it. And every time your stock kicks off a dividend, you will be taxed on that dividend.

But it is also worth mentioning that every time your stock goes down and you sell it you can take a capital loss and you can use that to offset your other capital gains. So you should only lose some percentage of the money that you make in net profits.

3. You are exposing your “manufactured” spending money to the inescapable risk of the stock market.

Translation: do not play this angle with any money that you cannot afford to lose.

4. It probably will not last.

I cannot see any way that loyal3 will be able to keep this payment model going for any period of time. They are, after all, losing a significant amount of money to the credit card companies with each purchase. (I hope I’m wrong on this one, but I’m probably not.)

Needless to say, I will be partaking in this angle pretty heavily while the getting is good. But only after I have fully funded my backdoor Roth IRAs and HSA. Better to do the important stuff first.

And my strategy will be to periodically shift my investments made via  loyal3 into more classically passive low-cost index investments.

But in the meantime I ordered some books from my local library on a subject I never thought I would be interested in; stockpicking.