Shangri-La

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We don’t live in an ideal world. That’s for sure.

Life is messy and requires compromises and grit and overcoming obstacles and all of that.

No endeavor worth pursuing is without its own trials and tribulations.

And of course the miles game is no different.

If you play the miles game, as I play it, there’ll be points of frustration.  If you play it more aggressively, there’ll be more.

You may buy a few thousand dollars worth of gift cards and drive out to the armpit that is “Super” Walmart and find that the cards were improperly activated. You will then have to email copies of your receipts to the gift card bank and wait a few weeks before your money is again liquid and usable.

Or you may be like my friend who bought a Walmart gift card instead of a Visa gift card and was unable to load it onto his bluebird card. He then had to figure out how to blow $1000 at Walmart. Yuck.

Such is life. No pain no gain.

But sometimes you’ve just got to daydream a little and imagine life the way you want it to be, not the way it is.

Sometimes you’ve got to picture the ideal. For if you don’t have this picture in your mind, how will you know when you’ve arrived at nirvana?

I was thinking about this the other day because of some recent exciting developments in the miles game.

I suddenly realized that Shangri-La for me would be the ability to manufacture at least $10,000 a month in spending without driving anywhere or actually purchasing anything in  person.

I decided to christen this elusive ideal “passive manufactured spending.”

Despite the initials, just thinking about this concept puts me into a good mood.

PMS! (1)

My PMS feels nothing like this…

PMS would be like a virtual reality version of the miles game. Climbing mountains, jumping out of planes, deep-sea diving, hitting spending bonuses, and saving the world, all from the comfort of my own couch.

It would be the travel hacking equivalent of passive income.

And as it stands right now, I figure I’m over 60% of the way there.

My current strategy involves Loyal3 accounts for both my wife and me.

We both automatically purchase $50 of each of the 55 companies offered each month by credit card. We then sell our shares about a week after their purchase, netting us $5500 in credit card “spend.”

Sometimes the shares will go up and sometimes they will go down. My guess is that if this opportunity stays open for a long time (which I very much doubt it can,) I’ll end up a little bit ahead overall. But even if I end up little bit behind , that’s fine too. After all, I’ll be earning thousands of dollars in airline bonuses while I’m happily writing my blog, lining up putts in my basement, and reading bedtime stories to my kids.

Add on another thousand dollars in Amazon payments and we’re up to $6500 a month in PMS sweat free.

Which means that as it stands, at this shining moment in time, I only need make one monthly trip to the dreaded Walmart to load $4000 on to my and my wife’s Bluebird cards.

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The fierce urgency of PMS is upon us

And if and when that eureka moment comes, and I find the missing $3500 a month in PMS ready to be snatched up, you’d better believe you’ll read about it right here first.

Which makes me wonder, what is your miles game dream?

Your comments are always welcome.

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18 Responses to “Shangri-La”

  1. Jim May 21, 2014 at 4:30 am #

    Nice article, keep me reading until the end. Got couple of questions for you. I might give this a try.

    What credit cards are safe to use with Loyal3 so that it doesn’t treat as cash advance.

    What about tax time? I think it will be a lot work organizing the buy/sell when it come time to file income tax.

    • Miles Dividend M.D. May 21, 2014 at 8:25 pm #

      Loyal3 does not allow payments with American Express or Discover. Other than that you should be fine.

      Buying a stock is truly not a cash advance. It is the purchase of a small share of the company.

      To date all of my loyal3 credit card purchases have posted as sales.

      But as always, there are no guarantees. Your miles may vary.

      Alexi

  2. Robert May 21, 2014 at 4:59 am #

    Why isn’t your wife doing Amazon payments? (That would add another $1000). Why aren’t your kids doing so on the cards that you gave them for your accounts? That would add another $1000 each. (Or can minors not get Amazon payments accounts?)

    • Miles Dividend MD May 21, 2014 at 7:38 pm #

      Robert,

      The common, anecdotal wisdom, is that you shouldn’t round-trip Amazon payments (i.e. have person AP person B $1000, and then have person B pay person A a thousand dollars.

      I’ve done it, but don’t make a habit of it.

      I’m not a fan of including my kids in manufactured spending (Other than making them authorized users on my cards so they can build credit history as well still minors.) mind you I’m not saying it’s wrong, I just don’t feel comfortable with it.

  3. Syed May 21, 2014 at 7:48 am #

    This is a dream I can believe in. It seems the days of getting an easy $5000/month with vanilla reloads are long gone even thought it hasn’t been that long. Recently I was starting to get a little tired of going to walmart every week or so since the one I usually go to adopted the no name on the debit card policy. The one I have to drive to now is great and they are very nice, but it just seems like a hassle.

    But then I remember that this will help me get things pretty easily that most people struggle for: travel and cash back. The walmart game will eventually close down I’m sure, but I dream along with you of more “passive” avenues of churning opening up. I will stay tuned.

    • Miles Dividend MD May 21, 2014 at 7:41 pm #

      Syed ,

      I agree. I had never entered a Walmart prior to starting to play the miles game. I am somewhat nostalgic for those innocent days of Walmart ignorance.

      Fortunately new doors keep on opening up. Walmart might become obsolete prior to it closing down.

      Alexi

  4. Jason May 21, 2014 at 11:19 am #

    What about the tax record keeping for all the sales/buys? Doesn’t that impact the passive part by not making it passive come tax time?

  5. Glo May 21, 2014 at 1:50 pm #

    How do you plan to work through the wash sale rules in this process? You may eventually have a loss that you may not be able to claim or show in your taxes. Especially if you plan to buy the stocks sell them after a week and then but them again in a month.

    As for what Robert asked… on Amazon there is a 1K send/receive limit and unless you have some third person involved you cannot or should not transfer money just between two people constantly… that’s at least what I have read so far.

    • Robert May 21, 2014 at 4:58 pm #

      My comment was related to using Amazon payments for legitimate expenses. I guess if you are just passing money around the family it is different. I’m making $1000/mo payments to someone for expenses they incurred on my behalf.

    • Miles Dividend MD May 21, 2014 at 7:44 pm #

      Glo ,

      Good point about the wash sale rule. My plan is to push back my next automatic day of purchase to 31 days after the sale of assets when I take a loss. This means I will not be able to average 12 cycles of year. Maybe more like 11?

  6. Kat J May 21, 2014 at 5:15 pm #

    A,
    Your PMS sounds like playing an 80s version of Mario Bros. LOL. Again, a very enjoyable read with my morning coffee.

    I’ll be taking the train through Portland sometime this summer and wanted to know if the market that sells the lemon infused olive oil is within walking distance of the train station? Thanks!

    K

    • Miles Dividend MD May 21, 2014 at 7:46 pm #

      Kat ,

      City market is definitely walking distance from the train station. My house is too. As long as I’m not in Japan at that time you’ll have to come visit us.

      Alexi

      • Kat J May 25, 2014 at 11:23 pm #

        Thank you for your reply. And if I do get into the area for more than an hour or two, I’ll give you a prior week or so heads-up……I’d love the privilege of meeting the brood. Ciao for now.

        K

  7. Miles Dividend MD May 21, 2014 at 8:01 pm #

    Jason,

    You are right. I will have to fill out extra pages on my tax return next year documenting my myriad gains and losses. In this way The strategy is more like work deferred or work transformed rather than work avoided.

    But I’d rather fill out tax forms than go to Walmart, so it’s a huge plus for me.

    Alexi

  8. Jeff May 22, 2014 at 11:29 am #

    Dr,
    Why do you buy each stock for $50? Couldn’t you buy just one for $2500 x each stock and increase your spending?

    Also, after you sell do you just request a check back?

    Last, can you download your transactions at the end of the year from Loyal3 electronically for taxes?

    Great post. Thanks!

  9. Miles Dividend M.D. May 22, 2014 at 12:12 pm #

    Jeff,

    Thanks for checking my site out.

    You can no longer make purchases greater than 50 bucks by credit card. (That was even sweeter while it lasted,)

    You can ACH your balance directly from loyal3 to your bank account. It takes 3 days and is a snap.

    Loyal3 my will reportedly release its customers 1099 form electronically. I have yet to experience this but will report back when I do.

    Alexi

    • Jeff May 22, 2014 at 3:37 pm #

      Alexi, Can you send me an email? I have some other questions that wouldn’t fit into this post. Thanks Jeff

  10. Robert May 27, 2014 at 3:09 pm #

    FYI…For $47.50 (10 stock trades) you can get 10,000 United miles if you set up a new account at OptionsHouse. Maybe not the most outstanding deal, but might be of interest to a few folks who don’t mind putting the minimum $5000 in an account for 180 days and doing 10 trades. (Don’t forget bid/ask spreads as you consider if this is a good deal for you. Your cost is more than the $47.50 in commissions). http://landing.optionshouse.com/linkshr/textlink/united?utm_medium=publisher-banner-ads&utm_campaign=linkshr-ipmTW51k5Dg&utm_source=linkshr&c3ch=Linkshare&c3nid=ipmTW51k5Dg&siteID=ipmTW51k5Dg-M1TKHWLST1k1Tc6ij72ovA

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