Why we didn’t open a Chase bank account to get a $1K bonus

IF YOU CAN EARLY VOTE:  GO DO IT!  (Don’t forget regular voting day is Tuesday, Nov 5th!)

Somehow the fact that DH and I are high income has been made known to credit card and bank companies.

Chase banking has been trying to get us to open an account for a couple/few years now.  Usually they’ve offered something like a $200 or maybe $300 bonus offer which we don’t even look at because it’s not worth the hassle to us.  But most recently, they sent a $1,000 welcome bonus offer.

  1.  Open a new Chase Sapphire bank account by mid-November
  2. Transfer $75K NEW money to checking/saving/J.P. Morgan investments (but not cds or retirement or 529 accounts) and hold it for 90 days

We’re not going to be switching our investments to J.P. Morgan when there’s Vanguard and plenty of other lower-cost brokers out there.

If the balance drops below $75,000, a $25/month fee will be assessed each month.

So, ideally we would drop $75K in and then remove it and close the account after the $1K deposit on day 100 or 101 (they say the deposit will occur after 90 days).  This sounds like a hassle, but for $1K we could probably deal with that hassle in a way that we wouldn’t for a mere $200.

But is it really $1K?  No– we have to be aware of the opportunity cost of money.  $75K is a lot of money and it has to come from somewhere.  Unless we’re saving for an unpaid leave, I don’t keep that much in cash (I try to keep a slush fund of $30K in my primary emergency fund which covers the summer even with slow reimbursements or potential DH job-loss).  Selling stocks would trigger tax implications in addition to requiring too much thinking (though I could theoretically undrip dividends– though those are generally quarterly so I may have missed my chance).  I can probably get $75K by temporarily moving our primary credit union emergency fund (we don’t really need that money until summer), moving money from our online high interest secondary emergency fund, closing out our Wells Fargo account (it’s useful for ATMs when traveling and for checks), and then using my next two paychecks, overdue reimbursements, and overdue summer salary.

Ok, let’s then assume that I have gathered all 75K and instead of putting it into the stock market, I decide to go with the risk free alternate option to put it in my Capital One online savings account that pays 1.90% APY (which we opened up because they gave a $200 bonus AND had a good interest rate AND we already had a capitol one credit card).  Holding onto that in my already existing Capitol One account for three months provides total interest of $356.81 according to this online calculator.  Of course, I would actually need to hold it a little longer to make a direct comparison (it takes time to transfer money, time to get the Chase match, time to close an account etc.), though probably not a full additional month (another month in that savings account would bring in $476.13 total), so it will be more than that, say $400 (which is about a third the difference between 4 months and 3 months added to 3 months).  If I were instead to look for the best online rate out there, there’s a 2.75 rate (that may or may not be real) on one of those bank rates websites.  Three months of that would provide $516.18.

How much does the Chase savings account that they want me to put $75K in earn?  .01% APY.  Which is practically nothing.  That’s even less than our Wells Fargo account.  Three months of that is $1.88.  Four months is $2.50.

And, of course, we have to pay taxes on that $1K, minimum 15%, so at least $150, making it really only $850 of free money (though any other method of earning interest will also be subject to tax).

So, yes, there’s a big one-time cash infusion for opening up one of these Chase bank accounts, but it has to be with the strategy of closing it as soon as possible because the interest rates are so extremely low and the minimum required balance to avoid fees is so high.  And it is not worth even $600 to gather together money from all those different sources (while hoping an actual emergency that can’t be cash-flowed doesn’t occur), open a bank account, deal with the paperwork and hassle and so on, then remember to close the account and deal with all the attendant hassle of doing that, and then figure out where to place the money after.  Heck, I might pay $600 to avoid all that potential stress.

Now, I’m not planning on actually putting all those reimbursements and incoming checks into a savings account, not even a fancy higher interest online savings account.  I probably should sit down sometime and figure out a long-term strategy for our money now that we’re doing all the obvious things, but I’m not sure it’s going to be any better than putting money into a broad-based index fund of one kind or another every couple months (is it time to look into munis?  Maybe?).  So until I actually figure out what we’re going to do, that’s what we’ll be doing– keeping our emergency funds full and shoveling any excess money into Vanguard taxable.  Doing so does have higher risk than a Chase savings account, even at .01% APY, but we can chance it.

How much would a bank have to give you as a bonus to make you willing to switch?

Link Love

Someone at the NYTimes is seriously a bad person.

Red states are working hard to suppress college student voting.

Ernst and Young’s sexist women’s training.

Thread on why the SCIF thing this week was so dangerous.  I have to wonder the real motive.

This week had a number of public finance posts that I think are better read in conjunction with each other. It seems like a lot of people are having thoughts about earning, saving, and feeling or not feeling rich. I’ve got one or two of these myself in drafts waiting for their respective Mondays, though we’re insanely well-off right now rather than in anything that could be thought of as an in-between place. TBH, I read the below posts and think, yeah, when I was in that situation I was also anxious about money. I’m not anxious about money right now only because we have no debt, have high incomes (mine can’t be taken away), we’re maxing out retirement, and we have a lot of money saved. When any one of these was not true I was anxious, though my anxiety decreased (and spending increased) as my income and savings increased. I have always been a good saver (and I grew up in a household where savings was paramount), but being a high earner has made my life so much better.

I Pick Up Pennies talks about how even though she’s got a nice income, she doesn’t feel rich (unlike Bitches Get Riches’ post last week). A Gai Shan Life talks about how she is worried about money even though they’re doing pretty well. Done by Forty lists all the money he and his wife have made and talks about how his higher income has made him more secure. The Frugal Girl asks if you had to choose would you rather be high earning or a good saver (my comment brought a surprising amount of ire from people who I can only think have super poor reading comprehension skills because they thought the post was about something else? Or maybe they just hate women who work. Anyway, check out the comments for unintentional drama that I did not go out of my way to prevent.) I think I’ll do a full post on this idea in the future because the more I think about it, the more I doubt that anybody but the most environmentalist (without dependents that they care about) would choose uncertain saving over certain earnings, even the women bashing me in the comments.

Why the 1985 version of Anne of Green Gables was so transformative to my generation.

Ask the grumpies: How much to save for different long-term priorities

Ali asks:

How much to save for college vs retirement vs other savings, etc.  Basically, tell me what to do.

The vast majority of our readers should max out their retirement savings prior to saving for kids’ college.  The reason for this is that you can get loans for college, but you can’t get loans for retirement AND US colleges don’t include retirement savings in their financial aid calculations.   That means every dollar that you hide in retirement is a dollar the universities don’t take into account for their financial aid calculations.  If worse comes to worse (ex. student loan rates are high), you can contribute less to retirement while the kids are in college (because you already have so much saved up) and cashflow some of those college expenses with what you would have contributed to retirement.

Disclaimer:  This is not what we did.  Originally I paid a lot of attention to the “recommended” savings percentages in various books and made sure we were putting away 20% of our income for retirement (recommended is 10-20%, we were on the “went to graduate school and need to save extra to make up for low savings years” track).  Then some extra money went into 529s (tax advantaged college saving) for our kids and then the stock market went crazy in a bad way (remember 2008?) and we started prepaying our mortgage as well.  It wasn’t until later that we started contributing to a 457 plan, even though that would have made more sense than contributing to the 529s.

The following assumes you have no debt other than a low interest mortgage.

  1. Save an emergency fund that will get you through a missing paycheck or late reimbursement or small emergency.
  2. Put money into retirement up to any employer match.
  3. Save an emergency fund that will get you through a reasonable job loss or other large expense.  (A Roth IRA is a good place to stash this when you’re just starting out since you can tap the principal without penalty and it can go to retirement if you don’t have a major emergency.)
  4. Save 10-20% of your gross income for retirement (or the max if are a high earner).  Play with retirement calculators to get more specific on the percent.
  5. Start putting money away in a 529 plan based on how much you’re planning to contribute and what schools your kid is considering.  We have more details here, and also more generally with other 529 posts.  The short is you’ll want to play with some college savings calculators AND the financial aid calculators at individual schools that you’re looking at.  (You might want to pay down your house at this step instead because colleges don’t use most housing wealth in their calculations for financial aid, but play with those different assumptions with the calculators.)

I DO think it is important to have a 529 for relatives to put monetary gifts in if you have relatives who are likely to think that’s a good idea, and don’t just have one for the oldest boy even though the money is fungible across kids.  That’s not how gifts work– people want to give to both kids, not just one.

So… I guess that’s the basic advice.  There are exceptions to the above– people who have access to a backdoor 401k at work but don’t have high incomes might never be able to max out their retirement, for example.

Grumpy Nation:  What advice would you give?  How do you decide how much to save where?

What are we reading?

Lady Derring Takes a Lover by Julie Anne Long was very good!  The title is a bit misleading… I mean, yes, eventually she does, but the book is really about character growth, perfidy, and catching smugglers.  cw:  There is an attempted rape and rescue that seemed like a lazy way of moving the romance forward.  I still recommend.  The Perils of Pleasure was ok.  The Legend of Lyon Redmond was fine, though it is one in which if they would just talk to each other the book would be even shorter than it actually was… I skipped large chunks of it.  The rest of the books in the Penny Royale Green series have been mixed, some more worth reading than others.

I finished all the Metzgers that the city library had available on kindle.  My Lady Innkeeper was ok, not great.  The Diamond Key was silly but fun.  Snowdrops and Scandalbroth was also silly and pretty good (if you can suspend disbelief and don’t need truly 3-d characters), and another Inspector Dimm, though less from his viewpoint this time around.

I also finished all the Jayne Anne Krentz books that our local library system has.  Sweet Starfire was an extremely good sci fi romance written in the 1980s, but Crystal Flame was TERRIBLE… or rather, it started out as a really great fantasy novel and I really wanted to know what happened… but then the hero raped the heroine and it just went downhill from there.  Deep Waters was ok– a little rough here and there.  A decent library read.

I think I would have loved Kill the Farm Boy some 20-odd years ago when I was devouring funny pun-packed Ace paperbacks edited by Ginjer Buchanan.  But I just could not get into it.

The Hidden Power of F*cking Up was a good read.  I think it’s mostly aimed at teens and twenty somethings, but it was still an enjoyable and easy read.  I’m glad I was able to get it from the library rather than buying it though.  I might be willing to listen to it on audible for the sound effects, but I don’t think I’d want to read it again.

Read a couple of fun newish Cat Sebastians– I enjoyed both A Duke in Disguise and A Little Light Mischief

Tried a couple of Victoria Thompsons, but they were both too depressing and hardcore and violence against womeny.  SIGH.  I need more escapism in my life, not less.

Lady Osbaldestone’s Christmas Goose was a LOVELY form of escapism.  Interfering matchmaking grandmother and her grandkids right all the silliness in her town AND find the missing Christmas geese.  I am hoping to get the next two in the series for Christmas!

The Viscount in Her Bedroom by Gayle Callen was ok (the hero was not sweet as some of the reviews promised, at least not until he found out the heroine was a “lady” — I like my heroes to treat all women with respect, not just the gentry and not just virgins), but I could have done without the other two books I tried.

A Minor Inconvenience by Sarah Granger has been ok, but it reads very much like an early work– it could use heavy editing AND it’s a bit cringy here and there in terms of consent and other things.  It did get better as it went along though.

I don’t know why I just haven’t been able to enjoy the last few Sarah MacLeans.  Skipped large chunks of Brazen and the Beast.  Which I think I also did with Wicked and the Wallflower.  I still like rereading a couple of her other series.  Thank you library for allowing me to try before I decide whether or not to buy.

DNF Too wicked to kiss by Erica Ridley.  Just so rapey.

Deleted the free Unmasking Miss Appleby by Emily Larkin which had a really great premise and would have been wonderful if say, KJ Charles had gone with that plot and added a little bit of fantasy, or even an earlier Sarah MacLean, but the hero was a godawful transphobe homophobe and not that great in terms of his beliefs about women (though those do get corrected).  I skipped big chunks, read the bit in which the hero figured out the heroine’s secret, and then just did not care enough to finish.  What a horrible jerk.  The author had to make him an abolitionist to make him have any redeeming quality.  Oh, and there’s rape and incest in there too (though I didn’t read those bits) and UGH.

Which is bizarre because I liked Primrose and the Dreadful Duke by Emily Larkin enough to buy myself a copy after checking it out from the library.  This book has some slow bits but no unnecessary drama and is light and happy and just a full pleasure to read.  The hero is great (not at all dreadful), and he and the heroine patch up any misunderstandings early on and focus on trying to protect the heroine’s brother from a murderer.  Same universe but doesn’t even seem like the same author.  I wish our library had more of her books so I could try before I buy, but alas, it has just the one.

Rereading the delightful Cold Comfort Farm (also, this paperback version is super cute, though your library likely has a hardback … do make sure you don’t get an abridged version– see the one star comments for which ones to avoid).  I had forgotten how horrid Flora is (this doesn’t quite come out in the movie but is quite clear in the book!)

The Rat Catcher’s Daughter (Lilywhite Boys novella/short story/novelette) by K J Charles was short but lovely!  Can’t wait to get Gilded Cage!  I love how she’s both such a wonderful author AND so prolific.  :D

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Men can sew too

DC1 brought home hir new orchestra uniform from school and the pants needed hemming.

My first thought was that I hate hemming pants and I was never very good at it, though my last experience was probably over 20 years ago.

So DH suggested we get them altered professionally.

But a quick search showed that all the alteration places in town had 2/5 stars and complaints about not following simple instructions and about losing orders and holding clothing longer than promised.

We know DC1 is going to grow this year, so those pants hems are probably going to need to be let out sometime this year, which means that cutting off the extra fabric, something a professional is likely to do (see “not following simple instructions”) is not a great idea.  The first concert was also only a couple of weeks away, which meant that losing the pants and holding onto them for a couple weeks was not viable.

I resigned myself to having to hem, but then DH said he’d give it a go.  There are plenty of youtube videos and guides.  I recommended the catch stitch to him since that’s the way I was taught.  (It might not have been the best recommendation since I hate hemming pants and I’m not great at it, but I’m sure if I hadn’t recommended something DH would have spent a few hours trying to figure out the best stitch.)  And then DH did it and did a good job and it took a little over an hour, far less time than going to one of the alteration places and returning to pick it up.

So… that probably saved $20-$40 in money, but also quite a bit more in potential aggravation, AND later this year we’ll know we’ll be able to let the hem down.  (It was pretty obvious from the fabric creases that last year’s kid had also had to let the hem back down, though that family had a sewing machine.)

Link love

Police officer fatally shoots black women in her own home

Trump tax documents show major inconsistencies

Facebook blocks car dealership from posting tree planting ads as too political (while allowing Republicans to post anti-Biden ads that include known lies)

How dual income couples find balance

Nightmarathon raising money for pediatric cancer research  (Breaking Cat News has donated some prizes)

[-$10,000] The Last Milestone

Why Bitches get Riches feels rich

Can younger students be taught to engage in deliberate practice?

I almost wish we had a staircase so I could get these.