It's my third day in San Diego, and so far the trip has been pretty fun. I'm glad I have my work laptop here - I don't think I could relax as much if I weren't able to keep up with work a bit. Internet wasn't included in the package, so I'm going to try and expense the $40 connection charge for the week. It really is a legitimate expense, though, since I wouldn't have gotten it except for work.
Anyway, Saturday was spent flying to San Diego via Chicago (seems out of the way to me, too). Sunday was a relaxing day at the beach. We walked a few miles along a boardwalk spanning Mission Beach and Pacific Beach. We ate lunch at a nice pizzeria, then picked up hamburgers to cook on the grill outside our building at the resort (which we've agreed to call "The Compound" even though it doesn't resemble a compound). We didn't spend all that much time on the beach, though, because it was chilly enough that the water was uncomfortable cold. I had fun kicking sand around, so it wasn't a total loss.
Today was spent at the San Diego Zoo's Wild Animal Park. I'm not a big fan of zoos, but it was pretty enjoyable. I learned first-hand that lions have round pupils as opposed to the slits my cats have. I haven't looked it up yet, but I have a couple theories as to why they might have evolved differently. There were plenty of cute baby animals, and the petting area was nice enough.
The best part of the trip so far would probably be the Vietnamese restaurant we ate dinner at today (Royal Pho Vietnamese Restaurant). I was thoroughly impressed. After some order confusion, they brought out our spring roll orders. They were large, had whole shrimp, some beef, and were accompanied by my favorite: peanut sauce. My rice noodles, shrimp, charbroiled pork, egg rolls, and other miscellaneous things were comparably excellent. I'd be happy to go back again this trip, and if there was a place like it in Kansas City, I would patronize it frequently.
Tomorrow, I have plans to attend a free golf lesson. This will be my first introduction to golf outside of putt-putt-style places. Wish me luck!
Monday, May 26, 2008
Saturday, May 24, 2008
Youtube
So, I've been contemplating submitting some youtube videos for a year or two. Now, I don't have a video camera with which to create said videos. If I did have one, I still don't think I could subject the world to that kind of horrible content, even if it is optional viewing.
I guess I like the idea of being loved and adored by thens of thousands of people like some of the vloggers out there. But, then I realize that I'm not nearly as creative as most of the loved and adored vloggers. I'm happy to talk at length about many topics, but I don't ever do so in a unique and/or funny way. I list facts, build arguments, and forget what I want to say. At least with that last one, I might have an endearing quality, if done right.
The lovable and adorable Natalie from Australia is the one who deserves the most credit for inspiring me to join the ranks of youtube vloggers. The problem is that she also deserves the most credit for intimidating me away from that course of action. I could never hope to be so lovable/loved nor adorable/adored. Ah well. Because my vacation next week keeps me from viewing the early-round action of The French Open, I decided to share Natalie's tennis video to show what I aspire to. Well, I might also aspire to this.
I guess I like the idea of being loved and adored by thens of thousands of people like some of the vloggers out there. But, then I realize that I'm not nearly as creative as most of the loved and adored vloggers. I'm happy to talk at length about many topics, but I don't ever do so in a unique and/or funny way. I list facts, build arguments, and forget what I want to say. At least with that last one, I might have an endearing quality, if done right.
The lovable and adorable Natalie from Australia is the one who deserves the most credit for inspiring me to join the ranks of youtube vloggers. The problem is that she also deserves the most credit for intimidating me away from that course of action. I could never hope to be so lovable/loved nor adorable/adored. Ah well. Because my vacation next week keeps me from viewing the early-round action of The French Open, I decided to share Natalie's tennis video to show what I aspire to. Well, I might also aspire to this.
One year
I've been in my house for a full year now. I officially bought my house on April 30, 2007. The anniversary went by only vaguely recognized until today. I don't have any deep thoughts regarding homeownership, but I figured I might as well recap what I've learned about it in roughly 366 days (leap year!).
I had more, but I forgot about this post until now. Add to it in comments!
- Maintenance expenses can be higher that you think. There is insurance, lawn care, pest control, utility bills, and property taxes.
- Furnishing a house can be expensive. After a year of payments, even, I'm still ~$5000 in debt to Nebraska Furniture Mart (thankfully at 0% interest).
- When you opt not to escrow your insurance and property tax payments, they can catch you by surprise.
- Living in a house is more fun when someone else is around, too.
- Mowing the lawn sucks, even when it's your own lawn.
I had more, but I forgot about this post until now. Add to it in comments!
Vacation(s)
I'm leaving for San Diego on a week-long family vacation. After that, I'm headed to Orlando for most of a week for Microsoft's TechEd. You can blame TechEd for my recent lack of posting. I've been crazy-busy at work getting ready for that. But, if I have internet access in San Diego, I will do my best to do a couple posts from the road, if for no other reason than to say I've blogged from San Diego.
Have a good week, all!
Have a good week, all!
Thursday, April 17, 2008
Taxes - What I learned
So, I know I posted a couple entries ago about how I already completed my taxes. Well, that's the first thing I learned.
Always wait until the last day to file your taxes because you never know when your dad will call you up saying that he found one of your tax forms that got delivered to your old permanent address.
Thankfully, I had waited a long time and hadn't actually sent anything off yet. The form in question was a 1099-INT from Bank of America. It took me a minute to realize that my 0% interest checking account did indeed process interest (as opposed to earning it) when I cashed in a bunch of savings bonds my grandfather bought for me in the 80s. In case you were curious, I used it to help pay for the down payment on my house. Anyway, the new final tally (and I really hope it is final, since I sent them off): I owe $3015 to the federal government, and $1416 to Missouri, but get $1117 back from Kansas.
As a side note, the above situation wouldn't have happened if the IRS prepared your taxes and sent the completed forms for you to verify or add addendum forms to.
I also reasoned out a couple of things that always struck me as ridiculously unfair. First, I figured out why state refunds can sometimes be taxed as income the following year. When you itemize your deductions, one of those deductions is the taxes withheld during the year. So, effectively, that refunded money was held by the government for a year, deferring taxes owed on it. It had always seemed to be a double tax on that money, but it does work out to be more fair than I had originally figured. Plus, the same logic applies to deductions: the check to Missouri that I wrote on April 15th will be a deduction on my taxes for 2008.
I actually can't remember what the second thing I reasoned out was. Instead, I'll open it up to comments: Does anyone have any interesting tips, information, or anything else they want to say about taxes?
Always wait until the last day to file your taxes because you never know when your dad will call you up saying that he found one of your tax forms that got delivered to your old permanent address.
Thankfully, I had waited a long time and hadn't actually sent anything off yet. The form in question was a 1099-INT from Bank of America. It took me a minute to realize that my 0% interest checking account did indeed process interest (as opposed to earning it) when I cashed in a bunch of savings bonds my grandfather bought for me in the 80s. In case you were curious, I used it to help pay for the down payment on my house. Anyway, the new final tally (and I really hope it is final, since I sent them off): I owe $3015 to the federal government, and $1416 to Missouri, but get $1117 back from Kansas.
As a side note, the above situation wouldn't have happened if the IRS prepared your taxes and sent the completed forms for you to verify or add addendum forms to.
I also reasoned out a couple of things that always struck me as ridiculously unfair. First, I figured out why state refunds can sometimes be taxed as income the following year. When you itemize your deductions, one of those deductions is the taxes withheld during the year. So, effectively, that refunded money was held by the government for a year, deferring taxes owed on it. It had always seemed to be a double tax on that money, but it does work out to be more fair than I had originally figured. Plus, the same logic applies to deductions: the check to Missouri that I wrote on April 15th will be a deduction on my taxes for 2008.
I actually can't remember what the second thing I reasoned out was. Instead, I'll open it up to comments: Does anyone have any interesting tips, information, or anything else they want to say about taxes?
Saturday, April 5, 2008
Mortgage fun
My mortgage is a standard 30-year fixed. I have the option to pay extra against the principal at any time, and I do so every month. I don't prepay a lot, but I do round my mortgage payment up to the nearest hundred. One of my favorite things is seeing my loan period drop by an extra month. That is, while I have 29 years and 1 month left in the 30-year period, I will have fully paid for my house after 28 years and 11 months. This month's extra payment finished off another month's worth of mortgage interest.
It's a small victory, I know, but it makes me happy. As my income increases, I do hope to increase my monthly prepayment further. As fun as it is to watch my mortgage figures every month, I definitely look forward to not having to make that payment. Maybe I'll finally win the lottery tonight.
It's a small victory, I know, but it makes me happy. As my income increases, I do hope to increase my monthly prepayment further. As fun as it is to watch my mortgage figures every month, I definitely look forward to not having to make that payment. Maybe I'll finally win the lottery tonight.
Taxes and budget
I'm pretty much officially done with taxes, now. It's quite the good feeling.
What's even better is that taxes were much simpler this year than last. TurboTax got their shit together and improved the importing feature to make it actually useful. I had to manually enter in all my options trades from E*TRADE, though, because those aren't required to be reported to the IRS (by E*TRADE), so it's up to me to do it. Still, things went much smoother this year. I only cursed once or twice!
The final tally is that I owe $1527 to the federal government, and $1416 to Missouri, but get $775 back from Kansas. Unfortunately, this comes at the same time as both my auto and home insurance policies need to be renewed. I'm talking with my insurance agent next week, but it's going to be around $2000 for the year. My server upgrades and some clothing purchases, plus discounted software purchased as part of my Microsoft trip (in addition to all my regular spending) results in an ~$1300 credit card bill this month. Then I have to pay my second half of 2007 property taxes (~$2150) by May 12. It's all hitting at once, and I'm down to my last $1-2000 in cash, which is below my comfort zone. I was so looking forward to buying a new main computer!
What's even better is that taxes were much simpler this year than last. TurboTax got their shit together and improved the importing feature to make it actually useful. I had to manually enter in all my options trades from E*TRADE, though, because those aren't required to be reported to the IRS (by E*TRADE), so it's up to me to do it. Still, things went much smoother this year. I only cursed once or twice!
The final tally is that I owe $1527 to the federal government, and $1416 to Missouri, but get $775 back from Kansas. Unfortunately, this comes at the same time as both my auto and home insurance policies need to be renewed. I'm talking with my insurance agent next week, but it's going to be around $2000 for the year. My server upgrades and some clothing purchases, plus discounted software purchased as part of my Microsoft trip (in addition to all my regular spending) results in an ~$1300 credit card bill this month. Then I have to pay my second half of 2007 property taxes (~$2150) by May 12. It's all hitting at once, and I'm down to my last $1-2000 in cash, which is below my comfort zone. I was so looking forward to buying a new main computer!
Thursday, March 27, 2008
Multiple E*TRADE accounts
A couple posts ago, I commented on my spending discipline. I just took a step to help me maintain that discipline. I opened up a separate bank account just for emergency funds.
I used to have a E*TRADE Bank Complete Savings account. It has solid features and a high yield - beating Bank of America CDs, for example. The interest rate applies to every dollar in the account - it's not tiered. Now I have two! E*TRADE is kind enough to allow people to open as many as they want, it would seem. The interesting thing is that this basically eliminates the limit of 6 withdrawals a month because you can always transfer money over to another savings account and withdraw from that.
I have never hit the withdrawal limit, so that didn't enter into my thinking when I set up the account. I was just thankful to have the option to create a separate bank account with just as high of an interest rate. I can rename it to "Do not touch" or "Emergency Funds" or whatever else will make sure I'm not tempted to spend it. I then set up an automatic transfer from my old savings account (which gets my direct deposits) to my new one. Now I'll always have enough cash on hand in case I otherwise forget to set aside cash (say, for property taxes or insurance). Thanks, E*TRADE!
I used to have a E*TRADE Bank Complete Savings account. It has solid features and a high yield - beating Bank of America CDs, for example. The interest rate applies to every dollar in the account - it's not tiered. Now I have two! E*TRADE is kind enough to allow people to open as many as they want, it would seem. The interesting thing is that this basically eliminates the limit of 6 withdrawals a month because you can always transfer money over to another savings account and withdraw from that.
I have never hit the withdrawal limit, so that didn't enter into my thinking when I set up the account. I was just thankful to have the option to create a separate bank account with just as high of an interest rate. I can rename it to "Do not touch" or "Emergency Funds" or whatever else will make sure I'm not tempted to spend it. I then set up an automatic transfer from my old savings account (which gets my direct deposits) to my new one. Now I'll always have enough cash on hand in case I otherwise forget to set aside cash (say, for property taxes or insurance). Thanks, E*TRADE!
Tuesday, March 25, 2008
Seattle - Microsoft trip
On Sunday, March 16, I left for Seattle on business. It was a thoroughly enjoyable trip. You want to hear more? Oh, OK.
Flight out
I was a bit nervous about the flight out because my dad made a comment over the phone about having the option of crashing the plane and collecting on my insurance if my brother were to get in financial trouble. I figured the NSA flagged the conversation and would have me put on the no-fly list. Well, I got on the plane just fine, it turns out, and had a lovely 4 hours crammed between two random guys. I got my rental car without any problems, but did have to search for the hotel a bit (the sign from the road is tiny, so I drove right past it the first time).
The hotel
I don't have very high standards when it comes to comforts and amenities. I admit that the hotel didn't have anything to wow guests, but the bed was of the new comfort-top variety, the sheets were soft (as opposed to being heavily starched), and everything else worked as it should. The free continental breakfast was above average and I enjoyed the OJ immensely.
The best part had to be my noisy neighbors, though. They kept me up on Monday night, but they were entertaining for a few 15-minute periods. I think they spoke Spanish, as I recognized a few words, but they seemed to speak English quite a bit, too, such as: "But I was almost there!"
Microsoft food
In addition to the free continental breakfast provided by the hotel, Microsoft also included a virtually unlimited supply of food during the three days of work. They had breakfast items, midmorning snacks, a full lunch, and afternoon snacks available each day. Plus, there was another kitchen with a freezer full of ice cream treats, and both areas had various beverage options. Monday's lunch was salmon, followed by sloppy Joe's on Tuesday, and deli sandwiches on Wednesday. I had a few muffins, a glazed twist donut, a couple cookies, a couple cake-square cookies, a fudge brownie, a bag of Sun Chips, and probably a few other miscellaneous items I am forgetting. Basically, I was very happy in Building 20.
I went out with my architect for Monday's dinner, which was nice. We just went to Red Robin, but had good conversation and I was happy to meet him after a full 18 months of working with/for him. Tuesday, the Microsoft people took both of us to a nice Italian restaurant. It was rather expensive, in my opinion, but it did taste good. The conversation was excellent, again.
The trip wasn't just about food, though. In addition to being filling, my trip was actually productive. I just can't talk about that - it's top secret. I can say that everyone was very eager to help out. Every question we had prompted a new expert to appear in Building 20. The freezer full of ice cream was raided proportionately, according to my informal observations.
A close second to the food in terms of favorite Microsoft experiences was the accent of one of our primary contacts. She was from Ireland and so had an Irish accent (amazing how that works). I could listen to her talk all day. Thankfully, she had the pleasant habit of mumbling/humming to herself.
Seattle
I was able to meet up with my uncle on Wednesday evening. He picked me up from my hotel and gave me a tour of the city. I have to say, Seattle is simply a beautiful city. There was a lot of traffic, but the drivers all seemed very courteous. Everyone I talked to had a long list of potential activities, whereas Kansas City has enough to keep its population sane, but little more. Throughout my trip, I found myself thinking "I could live here," or "I could work here." There's still a lot keeping me in Kansas City, but if someone wanted to drag me out to live in Seattle, I wouldn't be terribly opposed to it.
I drove by/across various lakes/sounds/rivers/bodies of water, the space needle, the sports arenas, the first Starbucks, some house boats, places that my uncle has kayaked, and quite a few other things. We ended up in a parking garage and then walked to a mall. I was told by a trusted source that I had to eat at a World Wrapps, and so we did. It was quite good, and it was also nice to get to talk to my uncle as an adult (mostly).
Flight back
The flight back was much better than the flight out. First, I had an aisle seat, so I had a bit more room in which to sit. Second, a very attractive young woman sat in the middle seat and was interested in entertaining me, for some reason. I did not object, naturally - she gave me her Travel Snacks, after all. She also loaned me a book by David Sedaris. I read the first story only, but it was highly entertaining. I did my best to be funny and entertaining myself, but she had extra food, books, and magazines. I had a pen that she was able to use for Sudoku (in case she ever finds and reads this, the bottom left square of the upper right block is a 4 [of puzzle #4]), and offered the novel I had been reading, but that's much harder to pick up and read than a collection of short stories. I'm afraid I just didn't have a whole lot to offer in the way of boredom relief. Anyway, it was a pleasant flight, and trip, for me.
Flight out
I was a bit nervous about the flight out because my dad made a comment over the phone about having the option of crashing the plane and collecting on my insurance if my brother were to get in financial trouble. I figured the NSA flagged the conversation and would have me put on the no-fly list. Well, I got on the plane just fine, it turns out, and had a lovely 4 hours crammed between two random guys. I got my rental car without any problems, but did have to search for the hotel a bit (the sign from the road is tiny, so I drove right past it the first time).
The hotel
I don't have very high standards when it comes to comforts and amenities. I admit that the hotel didn't have anything to wow guests, but the bed was of the new comfort-top variety, the sheets were soft (as opposed to being heavily starched), and everything else worked as it should. The free continental breakfast was above average and I enjoyed the OJ immensely.
The best part had to be my noisy neighbors, though. They kept me up on Monday night, but they were entertaining for a few 15-minute periods. I think they spoke Spanish, as I recognized a few words, but they seemed to speak English quite a bit, too, such as: "But I was almost there!"
Microsoft food
In addition to the free continental breakfast provided by the hotel, Microsoft also included a virtually unlimited supply of food during the three days of work. They had breakfast items, midmorning snacks, a full lunch, and afternoon snacks available each day. Plus, there was another kitchen with a freezer full of ice cream treats, and both areas had various beverage options. Monday's lunch was salmon, followed by sloppy Joe's on Tuesday, and deli sandwiches on Wednesday. I had a few muffins, a glazed twist donut, a couple cookies, a couple cake-square cookies, a fudge brownie, a bag of Sun Chips, and probably a few other miscellaneous items I am forgetting. Basically, I was very happy in Building 20.
I went out with my architect for Monday's dinner, which was nice. We just went to Red Robin, but had good conversation and I was happy to meet him after a full 18 months of working with/for him. Tuesday, the Microsoft people took both of us to a nice Italian restaurant. It was rather expensive, in my opinion, but it did taste good. The conversation was excellent, again.
The trip wasn't just about food, though. In addition to being filling, my trip was actually productive. I just can't talk about that - it's top secret. I can say that everyone was very eager to help out. Every question we had prompted a new expert to appear in Building 20. The freezer full of ice cream was raided proportionately, according to my informal observations.
A close second to the food in terms of favorite Microsoft experiences was the accent of one of our primary contacts. She was from Ireland and so had an Irish accent (amazing how that works). I could listen to her talk all day. Thankfully, she had the pleasant habit of mumbling/humming to herself.
Seattle
I was able to meet up with my uncle on Wednesday evening. He picked me up from my hotel and gave me a tour of the city. I have to say, Seattle is simply a beautiful city. There was a lot of traffic, but the drivers all seemed very courteous. Everyone I talked to had a long list of potential activities, whereas Kansas City has enough to keep its population sane, but little more. Throughout my trip, I found myself thinking "I could live here," or "I could work here." There's still a lot keeping me in Kansas City, but if someone wanted to drag me out to live in Seattle, I wouldn't be terribly opposed to it.
I drove by/across various lakes/sounds/rivers/bodies of water, the space needle, the sports arenas, the first Starbucks, some house boats, places that my uncle has kayaked, and quite a few other things. We ended up in a parking garage and then walked to a mall. I was told by a trusted source that I had to eat at a World Wrapps, and so we did. It was quite good, and it was also nice to get to talk to my uncle as an adult (mostly).
Flight back
The flight back was much better than the flight out. First, I had an aisle seat, so I had a bit more room in which to sit. Second, a very attractive young woman sat in the middle seat and was interested in entertaining me, for some reason. I did not object, naturally - she gave me her Travel Snacks, after all. She also loaned me a book by David Sedaris. I read the first story only, but it was highly entertaining. I did my best to be funny and entertaining myself, but she had extra food, books, and magazines. I had a pen that she was able to use for Sudoku (in case she ever finds and reads this, the bottom left square of the upper right block is a 4 [of puzzle #4]), and offered the novel I had been reading, but that's much harder to pick up and read than a collection of short stories. I'm afraid I just didn't have a whole lot to offer in the way of boredom relief. Anyway, it was a pleasant flight, and trip, for me.
Thursday, March 6, 2008
Managing debt
I grew up thinking that debt was a bad thing. Why buy a car when you can't afford it outright? I understood that houses required mortgages, but why put things on credit cards when you can pay cash? Managed properly, debt, even in credit card form, can be a good thing.
Spending
A lot of proper debt management depends on a realistic assessment of your spending habits. I, for example, don't tend to buy things. Or, I didn't until I bought a house and needed to put things in it. I have no expensive hobbies (compared to my brother who buys guitars and related equipment quite often) and I keep my monthly spending constant within a couple hundred dollars, in general.
In short, my spending habits are well defined and I track them informally. I also have a pretty stable job. IBM is a $160B company and people seem to like what I do there. Thus, I have a demonstrated discipline when it comes to spending and a pretty solid income. The risk of me not being able to pay my monthly bills is fairly low, so debt shouldn't be an undue emotional burden.
Interest Rates
The rest of debt management is interest rates. Most debt is pretty simple, actually. The interest rate is advertised directly. Some interest is tax deductible, though, in which case you need to multiply the advertised interest rate by (1 - your tax rate). For example, if you're in the 25% tax bracket and have a 6% mortgage, you're effectively only paying 4.5%.
If you can beat the interest rate determined above through investing, you can actually make money by going into debt. Even with the recent downturn, The S&P500 index has seen annualized growth of 9.516% over the last 5 years. That pesky tax rate works against us a bit, here, though. Interest income and short term capital gains are taxed as regular income, while long term capital gains are taxed at a 15% flat rate. For a worst case scenario, we can assume everything will be taxed as regular income. We need to now divide our effective interest rate from above by (1 - your tax rate) to get an rate of return goal. That 4.5% becomes 6% again. An 18% credit card interest rate becomes a 24% goal. Whatever we invest in, we need to beat this final rate in order for the debt to be profitable.
Over the long term, an 8% annualized return is fairly achievable. If you can invest money borrowed at 6% (effective) or lower, it is likely that you will be able to make money on money you don't actually have. This whole argument only applies if you have the money available to invest, though. If you borrow money to buy things, then that money isn't working for you.
Credit Cards
When there is something you need to buy, credit card debt can still be a good thing (even a card with an 18% interest rate!). The key is to not keep an interest-bearing balance. Pay the credit card off completely each month and you've basically borrowed money for 30-50 days interest free. You can keep that money in a high interest savings account and earn an extra few dollars by using a credit card instead of cash. Even better, you can get a credit card with additional cash back like the Chase Freedom card and/or Citi Dividends card.
Keep in mind that interest-free financing isn't a free pass to go on a spending spree. You still have to pay the purchase price. However, a store's 0% financing credit line can actually be better than cash back credit cards. I'll leave it as an exercise for the reader to determine a formula based on bank account savings rate, b, financing period, t, and cash back bonus, c, that calculates the break-even surface.
Spending
A lot of proper debt management depends on a realistic assessment of your spending habits. I, for example, don't tend to buy things. Or, I didn't until I bought a house and needed to put things in it. I have no expensive hobbies (compared to my brother who buys guitars and related equipment quite often) and I keep my monthly spending constant within a couple hundred dollars, in general.
In short, my spending habits are well defined and I track them informally. I also have a pretty stable job. IBM is a $160B company and people seem to like what I do there. Thus, I have a demonstrated discipline when it comes to spending and a pretty solid income. The risk of me not being able to pay my monthly bills is fairly low, so debt shouldn't be an undue emotional burden.
Interest Rates
The rest of debt management is interest rates. Most debt is pretty simple, actually. The interest rate is advertised directly. Some interest is tax deductible, though, in which case you need to multiply the advertised interest rate by (1 - your tax rate). For example, if you're in the 25% tax bracket and have a 6% mortgage, you're effectively only paying 4.5%.
If you can beat the interest rate determined above through investing, you can actually make money by going into debt. Even with the recent downturn, The S&P500 index has seen annualized growth of 9.516% over the last 5 years. That pesky tax rate works against us a bit, here, though. Interest income and short term capital gains are taxed as regular income, while long term capital gains are taxed at a 15% flat rate. For a worst case scenario, we can assume everything will be taxed as regular income. We need to now divide our effective interest rate from above by (1 - your tax rate) to get an rate of return goal. That 4.5% becomes 6% again. An 18% credit card interest rate becomes a 24% goal. Whatever we invest in, we need to beat this final rate in order for the debt to be profitable.
Over the long term, an 8% annualized return is fairly achievable. If you can invest money borrowed at 6% (effective) or lower, it is likely that you will be able to make money on money you don't actually have. This whole argument only applies if you have the money available to invest, though. If you borrow money to buy things, then that money isn't working for you.
Credit Cards
When there is something you need to buy, credit card debt can still be a good thing (even a card with an 18% interest rate!). The key is to not keep an interest-bearing balance. Pay the credit card off completely each month and you've basically borrowed money for 30-50 days interest free. You can keep that money in a high interest savings account and earn an extra few dollars by using a credit card instead of cash. Even better, you can get a credit card with additional cash back like the Chase Freedom card and/or Citi Dividends card.
Keep in mind that interest-free financing isn't a free pass to go on a spending spree. You still have to pay the purchase price. However, a store's 0% financing credit line can actually be better than cash back credit cards. I'll leave it as an exercise for the reader to determine a formula based on bank account savings rate, b, financing period, t, and cash back bonus, c, that calculates the break-even surface.
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