Retire on Rewards
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Setting up Your Brokerage Account

6/19/2012

 
[Updated June 2016]

I use two brokerage accounts for Retire on Rewards - a traditional IRA with Schwab and a taxable account with Fidelity. 

In an ideal world, I'd have all of the rewards consolidated into one account for simplicity and I would prefer that account be a Roth IRA as it is the most advantageous for tax purposes. For a quick overview of Roth IRAs vs. Traditional IRAs, click here.  I don't qualify for a Roth IRA so I use a traditional IRA. Since I can only contribute $5,500 annually to the IRA account, I need to have a taxable account that houses my reward balance during the year until I make my contribution (and carry any overflow if I save more than $5,500 in a given year).

Why Schwab? Simple. My employer uses them for a work sponsored SEP-IRA plan so I decided it was better to have both IRAs under one roof. Schwab also offers free trades for certain ETFs and free dividend reinvestment. Minimizing fees is a big part of my investing strategy so they met my criteria.

Why Fidelity? Fidelity issues a Visa credit card which offers a flat 2% cash reward on all purchases. This is my default card and the reward automatically gets added to my Fidelity account when I reach $50 in rewards. If I hadn't been a Schwab customer for a really long time (OptionsXpress starting in 2004), I'd just have a Fidelity IRA and a Fidelity taxable account. I like their platform better than Schwab and their fees are lower. 

One other potential choice was Merrill Edge because they offer 30 free trades if you are a Platinum Bank of America customer. There is also a really nice Platinum bonus if you use the Bank Americard Credit Card. Full details here. However, I love Silicon Valley Bank and the free trades are not enough of a reason to switch. 

Now that your brokerage account(s) are set up, it's time to start accumulating rewards! 

​Questions? Comments? Tweet me @RetireOnRewards.

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    Retire on Rewards
    ​1. Open Accounts
    2. Accumulate Rewards
    3. Redeem Rewards for Cash
    4. Invest Cash in ETFs
    5. Retire with $1MM
    ​My Progress Update
    $60,000 as of 9/30/2019
    $1,000,000 by 2046


    ​About Me

    I'm an entitled millennial so I want to live a lavish lifestyle but not necessarily pay for it. I'm only sort of kidding. As a result of my lifestyle ambitions, I learned how to "game" the system of airlines, hotels and credit card rewards to travel the world and stay in luxury hotels for free. Then I turned 29 and realized I had not saved a dime for my retirement. "Retire on Rewards" is my financial experiment to save $1 million by age 65 by only saving money from redeemed rewards.

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