AUTHOR: Fred Miller on 6/3/2025 FIRST: DAN SMITH on 6/3 | RECENT: Scoot Home on 6/8
Comments
After learning about credit card churning 3 years ago, I dove in and it’s been a profitable strategy. The learning curve was surprisingly small, especially compared to the rewards. Between me and my spouse, we’ve opened about 14 cards (8 for me, 6 for her) and pocketed thousands in welcome bonuses. My return has always been above $600 (around 15%) even after annual fees — which I only pay the first year, since I close the account before it hits again. And often the returns are even sweeter: one card gave me 80,000 points ($800 value) for $4,000 spend — that’s a 20% return! Honestly, I wish all investments worked like that. Since it usually takes me about an hour (sometimes less) to find and open a new card, my “hourly wage” is about $600 (still $500+ even factoring in the upfront time I spent learning about credit card churning). Easily beats my full time job hourly rate :) I’ve never paid a dime in interest because I always pay off my balance in full. The effect on my credit score has been tiny, maybe a 5–10 point dip here or there and temporary, since inquiries fall off after 2 years. In fact, my score has always stayed above 800 and even hit 832 during my churning streak. And let’s not forget: opening new accounts raises your total available credit, which can actually help your score by lowering utilization. So, between the high returns, the minimal effort, and the fact that my credit has stayed excellent, credit card churning has been well worth it. My “ROI” and “hourly pay” from this hobby might be the best side hustle I’ve ever had and all it costs me is remembering to click “apply now.”
Appreciate the summary, super helpful. I’m glad Bengen is pushing the conversation forward. I see SWR as a planning starting point, not a verdict. The “right” rate lives at the intersection of portfolio mix, sequence risk, retirement age, non-portfolio income (Social Security/pensions), taxes, longevity expectations, bequest goals, and—maybe most important—our willingness to adjust spending when markets get rough. Your points about underspending resonate. A very low withdrawal rate can look prudent on paper but sometimes reflects hidden trade-offs: extra years worked, deferred experiences, or chronic underspending in retirement. On the flip side, diversification and a flexible plan (guardrails/variable spending, cash buffers, delaying SS, etc.) can make a higher initial rate like 4.7% or even 5% reasonable for some households. Averages about spending declines are useful, but they’re just that—averages; health costs and personal preferences vary a lot. For me, it’s less about proving which single number “wins” and more about right-sizing spending to the life we want and keeping room to adjust. Whether it’s 4% or 4.7%, I’d pick the rate that fits our goals, income sources, and comfort level—and revisit it as life (and markets) change. Curious how others are calibrating that balance.
I just had a very brief conversation with my son's swimming instructor about her finances, and she mentioned that she doesn't really understand them, so she hired Edward Jones. I was honestly speechless for a moment. I wanted to encourage her to try managing her own finances, but in that brief pause, I realized how much time and learning it actually takes to feel confident doing that, something many of us on this forum might forget. And while I couldn’t help but wonder how many different high fee funds she’s now invested in (probably more than a few!), I also get why people turn to firms like Edward Jones. For someone who feels overwhelmed, having a familiar, friendly face to guide them, even at a higher cost, can feel reassuring. Still, I hope over time she gains the confidence to take more ownership of her financial decisions.
Thanks for sharing this quiz. I took it, and while I appreciate its depth, I feel there are likely better options out there for assessing personal finance knowledge. Several questions (at least 10) didn’t really apply to me, for example, ones on annuities and life insurance, or didn’t accurately reflect my understanding of personal finance. I say that because I know enough to recognize that annuities and life insurance aren’t a good fit for me, but not enough to answer detailed questions about them correctly. For instance, here’s one question: “True or false: The death benefit from a life insurance policy owned by an individual is income tax free for the beneficiary.” Additionally, I felt a few questions focused more on financial trivia than practical knowledge. For example, “A PE ratio means…”. Yes, I answered it correctly, but I’m not sure knowing that is essential for someone who manages their finances well, especially if they invest primarily in index funds.
That said, there were many strong questions, particularly those related to Social Security, and I do agree the quiz is more extensive and challenging than the 3 question one linked above. Still, I think someone could score poorly on it and still be doing an excellent job managing their finances.
Assuming you meant multiplying the growing balance each time by 1.02, which is the correct method for compound interest, which is what I assume you mean :)
You make a great point, compound interest is key to understanding long-term saving and investing. While the original question doesn't explicitly say "compound," the phrase “left the money to grow” typically implies compound interest. Using simple interest, you'd have exactly $110 after 5 years. But with compound interest, it's about $110.41, a small difference now, but huge over decades. I like your suggested edit to make the intent clearer! By the way, $110.41 is the correct answer if you're compounding annually. However, since most savings accounts compound monthly, the actual amount would be closer to $110.51. The question doesn't specify the compounding frequency, so while annual compounding is typically assumed in these types of questions, either answer could be reasonable depending on interpretation.
Just to clarify, I'm not trying to reduce basic math to something like first-grade arithmetic, as you put it. You originally said, “First 2 questions are basic math, forget about financial literacy,” and I was simply pointing out that what you're calling "basic math" actually involves understanding financial concepts like interest and inflation. Sure, basic math includes more than addition, there's subtraction, multiplication, division, etc., but the key issue here is that the questions aren't just about solving math problems. They require conceptual understanding. You’re assuming people already understand what inflation or compound interest is before they can even apply the math. Interestingly, you later said, “The issue that I perceive is that they’re word problems…” which seems to shift away from your original take. So which is it: are these just basic math problems or are they more complex word problems that require financial understanding? I’d argue it’s a combination. Without grasping the underlying concepts, even simple calculations can be out of reach. Let me give an example from my field to illustrate why conceptual understanding matters. Suppose I ask: If Sally eats 60 grams of protein per day, is relatively sedentary, and weighs 65 kg, is she consuming: A) too much protein
B) too little protein
C) just the right amount
D) I have no clue? You'd need to know the basic recommendation, 0.8 g/kg/day for sedentary individuals, to solve it. Then you'd multiply: 0.8 × 65 = 52 grams. Since she’s eating 60 grams, the answer is A) too much protein. That’s simple math, yes, but only if you understand the context behind the numbers. Same goes for these finance questions: without understanding the concepts behind them, they’re not truly “basic.”
I got 100%, and it wasn’t just lucky guessing, I actually knew the answers, which I’m really glad about. It’s reassuring to see that I have an understanding of compound interest (Question 1), inflation (Question 2), and risk diversification (Question 3). If you check the Q&A section from the creators of these questions (Stanford’s IFDM Center), they explain the intent clearly: "The Big Three are questions that assess individuals’ knowledge of financial concepts that are the universal building blocks for financial decision-making: compound interest, inflation, and risk diversification. These concepts apply over the life cycle, over time, and across countries. Understanding them is critical for managing debt, deciphering loan terms, investing, growing wealth, and generally managing day-to-day finances.” These three concepts aren’t just trivia. I feel they are important for making informed choices about borrowing, saving, and investing. While they may seem basic to many of us with a background in finance, they’re often unfamiliar or misunderstood by the general public. That said, if we were to refine or expand the assessment, what would you add or replace from these three questions to make it a better measure of someone’s knowledge and ability to manage their finances?
I respectfully disagree. Simple math is something like 1 + 1 = 2. But compound interest, as asked in Question 1, goes beyond that—it’s a foundational financial concept that requires some understanding of exponential growth, not just arithmetic. Question 2 deals with inflation and how it erodes purchasing power over time, which again isn’t basic math, it’s a key economic principle. These questions may seem simple to many of us here because we have a solid grasp of personal finance. But that’s exactly the problem, the “Curse of Knowledge” makes it easy to forget that most Americans don’t have this background. For them, these are not basic questions at all. Without understanding concepts like compounding and inflation, it’s hard to make informed financial decisions, let alone feel confident about investing in equities.
Wow, I’m really surprised! It’s amazing how persuasive a good advisor can be. I know people often overlook objective data, but I really thought that after you laid out the Boglehead approach and showed the returns, he would have made the switch to Vanguard. I guess sometimes familiarity and personal connections outweigh the numbers. Hopefully, he still ends up in a solid financial position—though as we know, some friendships can come with a hefty price tag!
Comments
After learning about credit card churning 3 years ago, I dove in and it’s been a profitable strategy. The learning curve was surprisingly small, especially compared to the rewards. Between me and my spouse, we’ve opened about 14 cards (8 for me, 6 for her) and pocketed thousands in welcome bonuses. My return has always been above $600 (around 15%) even after annual fees — which I only pay the first year, since I close the account before it hits again. And often the returns are even sweeter: one card gave me 80,000 points ($800 value) for $4,000 spend — that’s a 20% return! Honestly, I wish all investments worked like that. Since it usually takes me about an hour (sometimes less) to find and open a new card, my “hourly wage” is about $600 (still $500+ even factoring in the upfront time I spent learning about credit card churning). Easily beats my full time job hourly rate :) I’ve never paid a dime in interest because I always pay off my balance in full. The effect on my credit score has been tiny, maybe a 5–10 point dip here or there and temporary, since inquiries fall off after 2 years. In fact, my score has always stayed above 800 and even hit 832 during my churning streak. And let’s not forget: opening new accounts raises your total available credit, which can actually help your score by lowering utilization. So, between the high returns, the minimal effort, and the fact that my credit has stayed excellent, credit card churning has been well worth it. My “ROI” and “hourly pay” from this hobby might be the best side hustle I’ve ever had and all it costs me is remembering to click “apply now.”
Post: What is your credit card rewards strategy?
Link to comment from September 13, 2025
Appreciate the summary, super helpful. I’m glad Bengen is pushing the conversation forward. I see SWR as a planning starting point, not a verdict. The “right” rate lives at the intersection of portfolio mix, sequence risk, retirement age, non-portfolio income (Social Security/pensions), taxes, longevity expectations, bequest goals, and—maybe most important—our willingness to adjust spending when markets get rough. Your points about underspending resonate. A very low withdrawal rate can look prudent on paper but sometimes reflects hidden trade-offs: extra years worked, deferred experiences, or chronic underspending in retirement. On the flip side, diversification and a flexible plan (guardrails/variable spending, cash buffers, delaying SS, etc.) can make a higher initial rate like 4.7% or even 5% reasonable for some households. Averages about spending declines are useful, but they’re just that—averages; health costs and personal preferences vary a lot. For me, it’s less about proving which single number “wins” and more about right-sizing spending to the life we want and keeping room to adjust. Whether it’s 4% or 4.7%, I’d pick the rate that fits our goals, income sources, and comfort level—and revisit it as life (and markets) change. Curious how others are calibrating that balance.
Post: Is 4.7% the New 4% Safe Withdrawal Rate
Link to comment from August 23, 2025
I just had a very brief conversation with my son's swimming instructor about her finances, and she mentioned that she doesn't really understand them, so she hired Edward Jones. I was honestly speechless for a moment. I wanted to encourage her to try managing her own finances, but in that brief pause, I realized how much time and learning it actually takes to feel confident doing that, something many of us on this forum might forget. And while I couldn’t help but wonder how many different high fee funds she’s now invested in (probably more than a few!), I also get why people turn to firms like Edward Jones. For someone who feels overwhelmed, having a familiar, friendly face to guide them, even at a higher cost, can feel reassuring. Still, I hope over time she gains the confidence to take more ownership of her financial decisions.
Post: I’m Guessing Most HD Readers Will Score 100%
Link to comment from May 31, 2025
Thanks for sharing this quiz. I took it, and while I appreciate its depth, I feel there are likely better options out there for assessing personal finance knowledge. Several questions (at least 10) didn’t really apply to me, for example, ones on annuities and life insurance, or didn’t accurately reflect my understanding of personal finance. I say that because I know enough to recognize that annuities and life insurance aren’t a good fit for me, but not enough to answer detailed questions about them correctly. For instance, here’s one question: “True or false: The death benefit from a life insurance policy owned by an individual is income tax free for the beneficiary.” Additionally, I felt a few questions focused more on financial trivia than practical knowledge. For example, “A PE ratio means…”. Yes, I answered it correctly, but I’m not sure knowing that is essential for someone who manages their finances well, especially if they invest primarily in index funds. That said, there were many strong questions, particularly those related to Social Security, and I do agree the quiz is more extensive and challenging than the 3 question one linked above. Still, I think someone could score poorly on it and still be doing an excellent job managing their finances.
Post: I’m Guessing Most HD Readers Will Score 100%
Link to comment from May 31, 2025
Assuming you meant multiplying the growing balance each time by 1.02, which is the correct method for compound interest, which is what I assume you mean :)
Post: I’m Guessing Most HD Readers Will Score 100%
Link to comment from May 31, 2025
You make a great point, compound interest is key to understanding long-term saving and investing. While the original question doesn't explicitly say "compound," the phrase “left the money to grow” typically implies compound interest. Using simple interest, you'd have exactly $110 after 5 years. But with compound interest, it's about $110.41, a small difference now, but huge over decades. I like your suggested edit to make the intent clearer! By the way, $110.41 is the correct answer if you're compounding annually. However, since most savings accounts compound monthly, the actual amount would be closer to $110.51. The question doesn't specify the compounding frequency, so while annual compounding is typically assumed in these types of questions, either answer could be reasonable depending on interpretation.
Post: I’m Guessing Most HD Readers Will Score 100%
Link to comment from May 31, 2025
Just to clarify, I'm not trying to reduce basic math to something like first-grade arithmetic, as you put it. You originally said, “First 2 questions are basic math, forget about financial literacy,” and I was simply pointing out that what you're calling "basic math" actually involves understanding financial concepts like interest and inflation. Sure, basic math includes more than addition, there's subtraction, multiplication, division, etc., but the key issue here is that the questions aren't just about solving math problems. They require conceptual understanding. You’re assuming people already understand what inflation or compound interest is before they can even apply the math. Interestingly, you later said, “The issue that I perceive is that they’re word problems…” which seems to shift away from your original take. So which is it: are these just basic math problems or are they more complex word problems that require financial understanding? I’d argue it’s a combination. Without grasping the underlying concepts, even simple calculations can be out of reach. Let me give an example from my field to illustrate why conceptual understanding matters. Suppose I ask: If Sally eats 60 grams of protein per day, is relatively sedentary, and weighs 65 kg, is she consuming: A) too much protein B) too little protein C) just the right amount D) I have no clue? You'd need to know the basic recommendation, 0.8 g/kg/day for sedentary individuals, to solve it. Then you'd multiply: 0.8 × 65 = 52 grams. Since she’s eating 60 grams, the answer is A) too much protein. That’s simple math, yes, but only if you understand the context behind the numbers. Same goes for these finance questions: without understanding the concepts behind them, they’re not truly “basic.”
Post: I’m Guessing Most HD Readers Will Score 100%
Link to comment from May 31, 2025
I got 100%, and it wasn’t just lucky guessing, I actually knew the answers, which I’m really glad about. It’s reassuring to see that I have an understanding of compound interest (Question 1), inflation (Question 2), and risk diversification (Question 3). If you check the Q&A section from the creators of these questions (Stanford’s IFDM Center), they explain the intent clearly: "The Big Three are questions that assess individuals’ knowledge of financial concepts that are the universal building blocks for financial decision-making: compound interest, inflation, and risk diversification. These concepts apply over the life cycle, over time, and across countries. Understanding them is critical for managing debt, deciphering loan terms, investing, growing wealth, and generally managing day-to-day finances.” These three concepts aren’t just trivia. I feel they are important for making informed choices about borrowing, saving, and investing. While they may seem basic to many of us with a background in finance, they’re often unfamiliar or misunderstood by the general public. That said, if we were to refine or expand the assessment, what would you add or replace from these three questions to make it a better measure of someone’s knowledge and ability to manage their finances?
Post: I’m Guessing Most HD Readers Will Score 100%
Link to comment from May 31, 2025
I respectfully disagree. Simple math is something like 1 + 1 = 2. But compound interest, as asked in Question 1, goes beyond that—it’s a foundational financial concept that requires some understanding of exponential growth, not just arithmetic. Question 2 deals with inflation and how it erodes purchasing power over time, which again isn’t basic math, it’s a key economic principle. These questions may seem simple to many of us here because we have a solid grasp of personal finance. But that’s exactly the problem, the “Curse of Knowledge” makes it easy to forget that most Americans don’t have this background. For them, these are not basic questions at all. Without understanding concepts like compounding and inflation, it’s hard to make informed financial decisions, let alone feel confident about investing in equities.
Post: I’m Guessing Most HD Readers Will Score 100%
Link to comment from May 31, 2025
Wow, I’m really surprised! It’s amazing how persuasive a good advisor can be. I know people often overlook objective data, but I really thought that after you laid out the Boglehead approach and showed the returns, he would have made the switch to Vanguard. I guess sometimes familiarity and personal connections outweigh the numbers. Hopefully, he still ends up in a solid financial position—though as we know, some friendships can come with a hefty price tag!
Post: Among Friends
Link to comment from March 1, 2025