The Manifesto Episode 30: Safeway J4U Recap, I-Bonds, Driving for Lyft/Postmaes and More with Calwatch

Hello, and welcome to The Manifesto with Gideon, the Free-quent Flyer, on the Milenomics Podcast Network. I’m Gideon, the Free-quent Flyer, and I’m joined today by long-time reader and friend of the blog, Henry. Henry, welcome to the Manifesto.

[0:16] Plugs

• Twitter, Bogleheads, Doctor of Credit: @calwatch
• https://linktr.ee/calwatch 

[2:00] Background

• How did you get into travel hacking? Was there one big score that made you fall in love with the game? A big signup bonus, earning opportunity, or super-valuable redemption?
  • Fatwallet forums/App-o-rama
  • Turn credit card bonuses into high-interest CD’s
  • EVA Air business redemptions

[5:30] Safeway Post-mortem

• Background: Manifesto Episodes 27, 28, Newsletters #113, #115, #116
• When/how/where did you find out the new Vanillas were earning Just4U points? When did you buy your first card?
  • Buying gift cards to fill up bonus categories
  • Previous offers for $10 off $100, $15 off $200 on fixed value cards
  • Chase Sapphire Reserve “pay yourself back”
• How were you liquidating Vanillas, did that change over time as opportunities opened and closed? Tax payments, money orders, Bravo, Stockpile?
  • County property tax payments
  • Estimated federal taxes (2 payments per processor, 3 processors, 5 filing periods including extension for 30 payments per year)
• How were you liquidating Just4U points? Gas savings (California gas prices!), “basket” rewards,” “item” rewards?
  • Gas is more expensive than Costco, so you pay 25-40 cents more, then get a dollar off, total savings is less than a dollar
• How many accounts were you using? Any rewards left to redeem, any plans for them?
  • Only two, the weekly redemption was helpful in burning them down
  • Anikeev

[20:45] The November Treasury Series I Bond Deal

• Background: https://freequentflyerbook.com/blog/2021/11/12/how-i-would-and-might-maximize-the-current-series-i-savings-bond-deal
• 0% fixed rate plus semi-annual inflation adjustment, currently 7.12% APY (3.56% for 6 months)
• Under-withhold on paycheck, overpay on estimated taxes to generate $5,000 refund.
• Depositaccounts resources: https://www.depositaccounts.com/blog/inflation-treasury-series-i-savings-bonds/
• How long have you been buying Series I bonds? Is “six figures” 10 years of buying, 20 years?
  • Purchase limits: $10k per person, $10k per entity, $5k in tax refund
• Buying through an entity
  • Apply for an EIN: https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online
  • Nolo Press living trusts: https://www.nolo.com/legal-encyclopedia/living-trusts
  • Each entity requires its own Treasury Direct account
• Only formed entity this year but maxed out since 2008. Started last year with EE’s as well
• What role do Series I bonds play in your overall asset allocation? E.g. are your retirement accounts all in stocks and I bonds provide the ballast? Do you also own stocks in taxable accounts?
  • Can use I bonds as emergency savings, tax-deferred savings, or retirement savings.
  • 3-month penalty if redeemed before 5 years, and 1 year minimum holding period
• Philosophically, what are Series I bonds? A bet on high and rising inflation? Tax-deferred assets like a traditional IRA? Inflation-protected liquidity (penalty-free redemption after 5 years, so incentive to get them as early/young as possible)?
• Personal plan for tax treatment of I bonds. Cash out in retirement at low marginal tax rate? Have you, or have you been tempted to cash them in during huge drawdowns to buy up cheap stocks (2008-9, 2020)?
  • cash-like investment, can easily liquidate if need to buy a car or use for another down payment.
  • Took out HELOC in 2020, originally to get in before possible closure of HELOC like in 2009 bubble pop, then to invest in corporate bonds due to fed guarantee, and now in stock ETFs

[35:30] Driving for Uber/Lyft

• You were one of the first Uber/Lyft hackers I was aware of, chasing signup rewards for number of rides given/revenue generated/number of hours worked. How did those promotions work, how lucrative were they, are they still around, and would you do it again?
  • Rideshare Guy: https://therideshareguy.com/
  • Used to be more casual drivers, now it’s become more professionalized
  • Signup bonuses, plus periodic “goals” if you don’t drive for a few weeks to entice you back on the platform
• When you were driving the most chasing those bonuses, what do you estimate was your gross after fares/tips/bonuses? How many total hours did you put into it? What do you think you netted hourly after gas/depreciation/tax advantages(QBI)?
  • 300 hours driving, gross was $25/hr but after IRS car usage rate and SE tax closer to $10/hr.
  • Use income to accumulate Social Security credits if job doesn’t pay in (windfall elimination provision: https://www.ssa.gov/pubs/EN-05-10045.pdf)
• Proposition 22. If you’re still driving or even riding, how do you think it has changed the hours/pay/benefits/culture/community of “gig” workers? How much do the new “benefits” make up for the loss of employee protections?
  • I ride sometimes and a lot of drivers struggle. Used to be a simple system of drivers being paid 75% of what riders pay. Now extremely opaque.
  • There is room for Prop 22 hacking for someone who needs health insurance. Could maximize your “engaged time”, simply by not moving after a drop off.
• In 10 years are Uber/Lyft/Doordash/etc. going to be independent, profitable companies, will they be consolidated into a single profitable monopoly, or will they all be tears in the rain by then?

[54:00] Quar Question of the Week

• How are you celebrating Thanksgiving, and what are you thankful for this year?
  • Not getting COVID, not having my family or friends get COVID, Stockpile deal and Safeway

Thanks again to Henry for joining me today. You’ve been listening to The Manifesto with Gideon, the Free-quent Flyer, on the Milenomics Podcast Network. Goodbye, and good luck.