Turning Small Deals into a $100,000 Nest Egg

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There is a story circulating about MIT students offered $100 in free Bitcoin back in 2014. A few quickly spent it on dinner at a local sushi restaurant. Some kept it all, now worth about $14,000. Some agreed to help fellow students set up a crypto wallet to hold their Bitcoin, in exchange for some of it. 1 BTC was worth about about $300 back then, and about $45,000 now. Those sushi dinners ended up being quite expensive, but can you really blame them? How many of us went out and backed the truck up on Bitcoin in 2014?

However, that got me thinking about the various deals that I post on this blog. I don’t know what you do for work, but I trust that you work hard and balance your levels of passion, income, and ability. I can’t help you much with your career, but these deals are a way to find common ground, as they are available to the great majority of readers. You may think of them as “free sushi dinners”, but they can equally be a powerful source of retirement savings and income.

1. Consider a target of $500 monthly profit coming from whatever deals are currently available. It could be higher interest on savings accounts, bank sign-up bonuses, credit card cash back, credit card sign-up bonuses, brokerage bonuses, US Mint purchases, savings on your normal everyday purchases, solo-business promotions, and so on. This is a relatively aggressive target, but if you consider everything together and average it out, it can add up quickly. I’ve been doing similar deals since I was 21 years old making $20,000 a year with $30,000 in student loans.

2. $500 a month = $6,000 a year = Maxed-out Roth IRA contribution. The 2021 contribution limit for Roth IRAs in $6,000 a year, with an additional $1,000 for those aged 50+. I always find this a very handy target to help me focus my profit from the “deals and offers” game. If you have a partner, going for $12,000 combined is an even better target. I’ve made every effort to do the max for 20 years now.

3. Invest in simple, transparent, productive assets. Some people are great with real estate, others reinvest in their own private small businesses. We should appreciate that anyone with $1,000 can open a IRA at Vanguard with minimal fees and invest in the all-in-one Vanguard Target Retirement Fund, which is a low-cost, diversified mix of global stocks and bonds. You don’t need to gamble on options at Robinhood, put too much in Bitcoin lottery tickets, or get insider access to a trendy “alternative/long/short/volatility-managed” hedge fund. Put it in, turn on automatic reinvestment of dividends, and walk away. Inside a Roth IRA, you don’t have to worry about taxes on dividends or capital gains distributions.

4. Repeat for 10 years. If you did this from 2011-2020, you’d have over $100,000. Every January, I show how regular, steady investments over time can end up with excellent results. Here is a table from What If You Invested $10,000 Every Year For the Last 10 Years? 2021 Edition:

Global stock markets are up even further in 2021 (VTIVX is up another 12% YTD as of this writing), but we can simply stick with these numbers. The chart assumes a $10,000 annual investment ($833 a month), but we can easily scale it down to our $6,000 annual investment.

If you invested $6,000 a year into the Vanguard Target Retirement 2045 Fund, every year for the past 10 years (2011-2020), you would have ended up with a total balance of $110,822. (If two people did this, they would have over $220,000!) These are real-world numbers based on $500 a month, not a theoretical result from a calculator. You can argue the details, but even with only $250 a month, you’d have ended up with over $50,000. (You would have done even better going all-in with an S&P 500 index fund as well, but this is an easy, set-and-forget choice including global stocks and bonds.)

I admit, I like to play the game of “winning” easy/free money. I find it much more enjoyable than any video game. I also try to only pick and choose those that offer a good payout/effort ratio, usually over the equivalent of $100 an hour. Now, these small deals will never replace a successful career, which can supercharge your savings into the realm of financial independence. However, this is yet another reminder that small amounts, however attained, can add up to a surprisingly big number over time when invested productively and left alone. I have the Vanguard IRA statements to prove it. 😀

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  1. Of course you are leaving out an important detail. $500/month does not equal a $6000 Roth contribution for the year. Why? Because you have to pay taxes on all of that “Earned” money. You have to figure that 20-40% of it goes towards taxes. So to put $6000 in a Roth you would have earn ~$715/month in these bonus deals. (Assuming 30% combined state and federal taxes.)

    • Taxes are a fair point, although depending on your mix a bulk may not be taxable (credit card cash back, rewards, and bonuses are not taxable income and neither are savings/discounts technically). Or switch to Traditional IRA and get your tax deduction upfront 😀

  2. Jonathan, all valid points. But technically speaking, all these bonuses are not considered as “earned” income and cannot be counted for IRA contributions. Of course, if a person has a formal job and/plus the bonuses, he/she can use the bonuses to boost IRA contributions.

  3. Jonathan, all valid points. But technically speaking, all these bonuses are not considered as “earned” income and cannot be counted for IRA contributions. Of course, if a person has a formal job and/plus the bonuses, he/she can use the bonuses to boost IRA contributions…

    • Yes, I am assuming that most people will have $6k of their own earned income of some sort during the year to pay for their living expenses, at least spousal income, which would allow them to contribute money to an IRA.

  4. I like your thinking Jonathan. Always amazed at the people I work with who have zero, but can’t be convinced to get the employer match with our 401k, won’t chase bank bonuses or even Ibotta (a coupon app I’ve gleaned $1300 from since I’ve signed up.) I also see people cashing checks at $8-10 a pop at a bank that isn’t theirs, paying $15 for cashiers checks because they haven’t ordered a check book (don’t want to pay an up front cost or go to a bank with free checks). Meanwhile the multi millionaires that I know do not waste money on little things. They seem to be constantly price checking their lives. I remember my Dad running around telling us not to leave lights on in a room we weren’t in. I didn’t get it then, but I do now. I have tried telling people that if they saved $190 a month starting at age 20 and earned 8 percent, they’d have a million dollars at 65. $190 a month is not an aggressive amount to earn from cash back, bonuses etc.

    I do think $500 a month is super aggressive. I aim for $1500 a year in bank bonuses, cash back, Ibotta. Don’t you run out of new accounts to open?

    • I am not as aggressive as I used to be, but each credit card application has to be $500+ value for me, and I do multiple per year per person. Some like the Chase Sapphire Preferred are worth $1,250 cash directly off your grocery bill with one card. I like trying out new cards and new fintechs. Occasional business cards on top, which are $500 each too. I earn 3% to 3.5% APY on my cash deposits up to $100k, not 0.5% APY. Bank bonuses vary, some are a quick $50 or $100 while some are more like $250. The US Mint coin deals this year just so far would have added up to another $500 profit even if you missed one of them. I’m not trying to set a hard number, just giving some examples to show the possibilities.

      • Looks like I’d have to spend $4000 by September 30th to qualify for the Chase bonus? Don’t know if I’d make it.

        • You have longer than that to earn the bonus – the Pay Yourself Back feature offers extra categories every quarter, this quarter just ends 9/30. Hopefully future quarters will also include a broad category like dining out or groceries or gas, which make it easy to redeem at the 1.25 cent per point value.

  5. Stuart J Weissman says


    I couldn’t agree more. A combination of frugality and taking advantage of all of these free money offers has really made a huge difference in my savings over my life.

    My best return was during the early days of Travel Zoo. For each email address you gave them, they issued you 1 share of private company stock up to ten names. They didn’t even have to sign up or make a purchase. I sold those ten shares for around $2K in 2002. Invested, those ten email addresses are probably worth 1k a piece today, when you factor in interest and dividends. Who would have thought? Then again, when I was in college in the late 80s, a handful of my poli sci friends started registering every domain name they could with the IDN registry, which was free to do at the time. Every single one of them are multi millionaires today from the sale of those domains. Wish I listened to them. Most of them dropped out of college too. 😛

    • I participated in that TravelZoo promotion as well, although I forget the details. I just remember that I was very surprised that they went through with it to the end, credit to TZOO for not finding a way to bail out. The recordkeeping headache must have been enormous. I don’t know of any other company that has done a similar promo since – other than Jet.com which did something close but only for 10 people.

  6. Hah, 2014 is when I STOPPED buying bitcoin. Unfortunately, I was too ‘smart’ to put in more than I did. It was the beginning of my attempt to implement a barbell investing strategy, where I put the vast majority of my assets in low risk while putting a small amount (1-2% of net worth) into very high risk. Bitcoin was one, while all the others have stagnated or gone to zero, but that was the point. You only need one to pay off the rest. Have you ever done a post on this kind of approach?

    • The idea of taking a tiny part of your portfolio and taking some moonshots seems fine, even Bogle talks about a 5% “Play Money” portfolio. I also hear of lots of angel investors. Does this mean you are typing this from your private island? 🙂

      I would be curious – what do you think is a good moonshot today?

      • No private island yet, and I still see us as squarely in the middle of the crypto disruption price discovery. Not the best time to take significant profits, imo.

        As for new ‘moon-shots’, the ones I’m aware of are mostly about building layers on top of what Bitcoin has established as a foundation, the way the web enabled a whole new breed of business. The entire financial ‘stack’ is being disrupted rewritten on top of blockchains, and it’s unclear which will be the most important and lasting pieces of the puzzle. I’m bullish on various defi protocols, DAOs, and businesses that focus on being leaner than traditional financial institutions ever dreamed of being.

        I suppose NFTs are another big area, and while I have no interest in pure ‘collecting’ (whether digital or not), I recognise that tokenisation of the physical world is inevitable and it will be laughable in 10-20 years that the way you prove you own your house or car is by pointing to a piece of paper, or a record in some bank’s db, rather than a distributed immutable ledger. The are many ways to participate in these ecosystems and ‘place some bets’, but I don’t know of anything quite as clear cut as BTC/ETH yet. I think most people should just focus on diversifying into those, if they haven’t yet.

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