# When Points Are Better Than Cash Investments!

Discussion in 'Bengali Miles Guru' started by tahsir21, Aug 14, 2012.  |  Print Topic

1. ### tahsir21Z Representative

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The title might sound weird, but soon you’ll find out that points really are a better investment than cash.
A few days ago, I posted about how you can buy a car with points. In that post, I talked about how points are sometimes worth more than you think. Today I’m going to expand on that a little more.
Lets think long and hard about a cash investment. What do we do with the money we have? How do we make the most of it?​

Usually, we take our money to the bank and deposit it to gain interest or we buy stocks and trade.​

What if, there was a way to get a guaranteed amount of return on your money without getting scammed? There is now.​

Chase is known for offering a ridiculous amount of points and cash back, but what most dont think of is investing in points.
Let’s say I hypothetically have \$20,000 lying around. This is money that I need to invest somewhere to get the most return. I usually put it in a CD account that gives me 0.9-1% interest over 12 months. After 12 months, I receive 20,192.85 (assuming it compounds 12 times/year)
That is an interest amount of \$192.85
YOU NEED PATIENCE FOR THIS TO WORK!

Sounds good for the economic situation we’re in, but what if I worked a little bit to get a little more money?
Here’s what I would do.
As always, I know that A Chase Ink Bold card gives me 5 times extra points at office supply stores.
Using this knowledge, I put my \$20,000 in my bank account and charge my Bold card \$2,500 per month to buy prepaid gift cards from Office Depot.
This costs me about \$2,500 + \$24.75 (Processing Fee for each \$500/Card) Total = \$2,524.00
By doing so, I earn 12,500 points + the initial \$2,500 purchase points. Total = 15,000 points
After purchasing the gift cards, I immediately take \$2,524 out of my \$20,000 and pay my Bold Card.
At the same time, I am using \$1000 worth of gift cards that I purchased to churn into cash again by going through amazon payments.
Amazon payments is a system in which you can charge up to \$1000 per month on your credit card and have it be transferred to your bank account without a fee. This is the most simple way to earn back the cash you used up to buy those gift cards.
So, lets recap. I’m spending \$2,524 per month for \$2,500 in gift cards. I am then using \$1,000 of those gift cards to churn back into cash that will be transferred to my bank account leaving me with \$1,500 in gift cards.
I can do this for 7 months in a row before I use up my Initial \$20,000. You’ll be tempted to use the \$1,000 you get back every month, but dont unless you know you wont need that liquid cash for about 15 months or so.
I know that each month, I earn 15,000 points and get \$2,500 in Visa gift cards, but in the end have \$1,500 in Gift cards.
At month 7, I have a total of:​

105,000 points

\$10,500 in Gift cards

\$9,326 In Cash (20,000-10,500 gift card amount -173 credit card fee)

If you’ve been paying attention, you’ll see where i’m going with this by now.
At month 7, you will do nothing but keep charging your gift cards back to amazon at \$1,000 per month. Month 7 is also crucial because this is when you earn all your “Interest” back. You earn it back in the form of points.
1,000 points = \$10
so naturally, 105,000 points equals to \$1,050 (1%)
To make sure people understand what just happened, I just EARNED \$877 in addition to earning all my money back.
If you want to be technical, I earned (1,050-173 credit processing fee) \$877
This is pretty unbelievable considering I wouldn’t even have \$125 at this point if I put my money into a CD.
If I continue to withdraw the giftcards, at month 12, I will have about:
\$14,326 in cash

105,000 points = \$1,050

\$5,500 in Gift Cards

I will fully withdraw the gift cards and interest at month 19.
This is if I withdraw all my gift cards, but after month 12, I can easily use my giftcards to get whatever I was gonna get after my CD “expired”
If you dont understand, I’ll explain.
Say I were to have \$20,000 that I was going to use to pay my tuition for college after 12 months. I can easily charge my tuition to one of those \$2,500 gift cards I bought so that I dont have to wait a month to withdraw it later. This would drastically cut my time to withdraw and also get me my interest faster!​

Example: Month 12.​

My college tuition is \$2,500 for the quarter. I use my balance of \$5,500 in gift cards to pay my \$2,500 tuition. This is what I was going to do anyways after 12 months, but instead of paying with cash, I’m paying with my gift cards. This would help me get my \$877 faster. I would be able to get it in month 16-17 depending on how I used amazon payments.​

In the end, It all comes down to patience and how hard you are willing to make money. This is a sure-proof way to make a ton of money on the money you already have. If you have patience, then you will come out an extreme winner. Although, this may take 17 months to complete, it can take a lot less if you use your gift cards instead of withdrawing them for cash. Also, with my calculation, you earn an interest amount of \$125/month for the first 7 months. In one month alone, you earn \$125. That is about the same interest you would earn in one year had you kept your money in a CD! Just to be clear, in 2 years, you would only make \$387.56 if you had put it into a CD.​