Why I Prefer Cash Over Travel
If you can spend $20K a year on a credit card and can make 5%, you will generate cash back of $1,000 per year. But, prices tend to rise over time, at about 2.77%, so you would expect your spending to increase year over year. What would happen if you banked the cash back on your credit card and invested it in an S&P 500 mutual fund earning a conservative 7% a year for 30 years?
Here is what it would look like:
I don’t know about you, but I’m not leaving $49K on the table, especially not for a few airline tickets.