Today is my 29th birthday (*shudder*) and I am setting in motion a bold and ambitious plan to save $1 million in retirement funds by age 65 by ONLY saving the reward dollars from free flights, hotels and credit card points. Just for context, I have exactly $0 saved in IRAs, 401Ks, etc. and I have $150K+ in student loans and less than $5K in cash money to my name.
My plan is simple: I love rewards, points and free stuff. This reward disease started when I was a McKinsey consultant. That being said, I graduated from Wharton with a finance degree and I've worked in finance for almost a decade.
The focus of the Retire on Rewards System is simplicity. I'm lazy and I want to spend my time living life not worried about optimizing every detail.
The Retire on Rewards System
1. Set up an IRA (preferably a Roth IRA) and a taxable trading account with a discount brokerage. I use Schwab and Fidelity. This was my selection process.
2. Accumulate reward points via credit card spend, hotel stays and airline flights. Here's my guide to accumulating points.
3. Redeem points from your reward accounts. Deposit the cash value of those rewards into the taxable brokerage account. At the end of the year, transfer that money into the IRA. Here's my strategy for maximizing redemption and how I track rewards.
4. Invest the money in your IRA into low cost ETFs that track the broad market. Here is my investing philosophy, strategy and tactics for achieving safe, consistent returns with minimal effort.
5. Retire with $1 million dollars!
That's it. Simple enough and it beats saving money every paycheck that you could be spending on living big. Follow my progress on as I (slowly) march toward $1 million.
Questions? Comments? Tweet me @RetireOnRewards.
Retire on Rewards