I’m not dead (yet) — just late. Not much new to report, so my apologies for the lack of mind-blowing, life-altering content you are accustomed to seeing.
Another month, another update. A few random comments.
Good Reads/Listens/Watches
- Not much.
Life
- I had surgery on my nose (deviated septum & sinuses). While the recovery was a bit rough for a few days, I’m glad I did it. I haven’t really been able to breathe out of one side of my nose for my entire life. I probably should have done it 30 years ago.
- Life continues to fly by at a frightening pace.
FC2 & FC5 won their respective age groups in the library’s pumpkin painting contest. We still need to eat Snoopy’s decapitated head.
After years of daily abuse, a dozen pairs of our Darn Tough Socks had reached the end of their life. We filed a warranty claim, sent in the old socks, and they gave us vouchers for free replacements on their website (four not shown). We’ve almost fully migrated every stock from cotton to wool over the past several years.
Over the last few months, we’ve migrated from the lousy blue to the superior purple Kirkland Signature toilet paper. However, when the blue went on sale I succumbed (on sale, blue was 38% cheaper per sq ft). I think I made a strategic blunder.
This Month’s Finances
For the first time in a year, I’m not currently chasing a brokerage bonus. It feels unsettlingly calm. I read about this $3k brokerage promo from Tradier (see Doctor of Credit and some discussion on Bogleheads), but not sure if it’s worth it.
I think I’ve convinced myself to sign up for the BoA Premium Rewards Elite card in early December, putting the “triple dip” of annual credits in play (you can earn $450 of credits in December of 2025, all of 2026, and Jan of 2027 before potentially downgrading before the second annual fee hits). With Smartly’s inevitable future demise and current shutting down of 4% for property tax, insurance, and college tuition, I’m thinking I need something better than a 2% card for “non-category” spend (I downgraded my trusty Premium Rewards card a while ago when USBAR/Smartly were still flying high). I’ll likely downgrade the card to the Premium Rewards card after the first year, with the relatively modest $95 annual fee that is offset by the $100 travel credit. In contrast, the Elite card has a $550 annual fee that is not offset by $450 of travel/lifestyle credits, but comes with added perks such as: 1.) 4 x unlimited Priority Pass lounge memberships, each with guest and restaurant privileges, 2.) primary rental car insurance, 3.) travel insurance, and 4.) 25% multiplier on point redemptions through BoA’s travel portal. If you can utilize this last feature, it amplifies the rewards of 2.625%/3.5% to about 25% higher (slightly less after accounting for the forgone points not earned through the travel itself). Not too shabby, but frankly a lot more complexity to manage and I’m skeptical it’ll be worth it in the long run. I will almost surely downgrade to the lowly Premium Rewards card after the first year.
- The good:
- Still employed.
- The bad/abnormal:
- Not much.
Footnotes:
- Fidelity unambiguously has the best HSA on the market. $0 admin fees + cheap investment options (e.g. FZROX, FZILX, FSKAX, etc).
- I lazily approximate home value as my historical purchase price.
- I have a 15Y mortgage which results in much larger principal payments than a 30Y mortgage. Since principal payments are simply transfers from one pocket (assets) to another (debt reduction), I treat such cash flows as savings.
- ~$8/mo cell phones described here.
- All expenditures at Costco & Walmart are classified as “Food at home” for simplicity (even if it’s laundry detergent, clothing, medicine, toys, etc).
- Nobody knows the perfect asset allocation. Just pick one and run with it. Use a target date retirement fund as a benchmark if you want some guidance (link). If you prefer to DIY (as I do), then a three-fund portfolio is great (link).
- My low portfolio expense ratio is the primary reason why I don’t hold target-date funds, which have expense ratios anywhere from 0.08% to 1%. I can achieve a much lower expense ratio on my own, and it is a triviality to manage with a two- or three-fund portfolio. Further, a DIY portfolio allows one to tax-loss-harvest more easily. Lastly, a DIY portfolio can help avoid the dreaded capital gains distributions caused by a fund-of-funds (e.g. Vanguard Target funds in Dec 2021).
- ETFs are slightly more inconvenient to hold relative to traditional index funds. With ETFs, you must deal with bid-ask spreads
as well as the inability to buy partial shares(Fidelity now offers fractional shares). With a simple index fund, you don’t have to deal with either of these issues. Bogleheads discussion here (link). - I hold VTSAX in my taxable brokerage account for its tax efficiency (no cap gains distributions thanks to its patented technique).
- CA’s 529 plan has the lowest expense ratio US equity index fund (link). I’d have 100% of our 529 money there if not for the state tax deduction we receive in our own state.
- My Collective Investment Trust (CIT) version of Vanguard’s Total Int’l Stock Index has a 0.050% expense ratio, yet produces ~0.095% of “tax alpha” due to reduced foreign tax withholdings. Vanguard implemented this change around 2019. Therefore, I report the effective expense ratio of negative 0.045% for this holding (=0.050%-0.095%). The “tax alpha” shows up in the performance differential in the fact sheets here (CIT vs MF) and is more thoroughly explained here. Unfortunately, this ~0.095% of “tax alpha” is not available in the mutual fund version.
Disclaimer: This site is for entertainment purposes only, as disclosed here: https://frugalprofessor.com/disclaimers/.
Glad to see you’re still alive and doing well. But wow, going from blue to purple TP may cause some to question if you’re still frugal! 😉
Am very impressed at the $17k rewards credit over the last 12 months….I’ve been watching your card/bonus chasing but it is amazing to see what it nets out to.
Love the pumpkins.
Yes, the transition from blue to purple KS toilet paper is surely damaging my reputation.
$17k of rewards is indeed not too shabby. $9k YTD from brokerage bonuses, unfortunately taxable. Would have been $2k higher had I not botched Merrill’s timing. The rest would be CC rewards, largely a function of spending too much (like our Europe trip), but I’m doing a decent job of maximizing rewards conditional on spending.
You still have four bidets in your house, right? 🙂
When I closed the USBAR (Smartly card), they asked if I wanted to product change to the Altitude Connect card – no annual fee – but comes with 4 lounge visits per year, and a free data plan for international travel among other benefits.
We go through an alarming amount of toilet paper despite the four bidets. There is not universal buy-in on bidet use among our children.
I also downgraded the USBAR to Altitude Connect, but didn’t know about the international data plan. Thanks for sharing! Not too bad for a sock drawer no annual fee card.
Any thoughts on the WeBull 2% promotion? With a 13 month lock up, this is by far the best I’ve seen thus far.
https://www.webull.com/offers-promotions/deposit
I’ll spit the referral bonus with ya 🙂
2% is not bad at all. I have a preference for shorter-term lockups, but 2% is tempting… I’ll have to give more thought on it.
What, you won’t even say that the Freetaxusa has rolled out 2025 version?
You’re right! I’ve already filled mine out for 2025.
You didnt buy costco’s merino wool socks? 🤯
Any reason for wool over cotton- i thought cotton wicks better and good during summer
Cotton is known as a terrible clothing material for outdoorsy stuff because it never, ever dries. For socks, that is not ideal.
We have sweaty feet in my family (my fault). A year or two back, I bought FC5 some new shoes. A day or two later they smelled worse than anything I’d smelled before in my life. The obvious solution, darn tough socks for him. Problem solved immediately. Wool wicks sweat leaving your feet dry.
They make incredibly thin wool socks which are perfect for summer. I wear ours (pictured) year-round and find them about perfect — maybe a tiny cold in the dead of winter and maybe a tiny hot in the middle of summer, but good enough for me.
I haven’t tried Costco’s merino wool socks, but they are too tall to be of use to me for year-round usage (climbing, running, sleeping, work, etc). 10 years ago I would buy their KSig wool socks and they were mediocre, but cheap.
Maybe I’m delusional, but darn tough has won me over. Expensive (less so if you buy on sale), and a no-questions asked lifetime warranty.
I have been a Darn Tough shill for over a decade now. They even have a separate line (Open Wide) for people like me with Hobbit feet.
Ha!
A few years ago, I applied for the Premium Rewards Elite to attempt to double/triple dip the benefits, but I ended up just keeping the card. (I also transferred all my points from my Premium Rewards card to the PRE before downgrading it to a CCR, which increased the value of the points when booking airfare through the BofA portal.)
I don’t mind paying the $550 annual fee, because I buy 3 x $100 United Travel Bank or AA e-gift cards, and the $150 lifestyle credit works for tennis lessons for the kids. Even though it seems like I’m stuck paying $100, it’s worth it to me because of the high number of points I originally transferred from the PR and that I continue to earn on the PRE paying estimated taxes, since these points are worth more on the BofA portal when booking airfare. Although I typically don’t like booking airfare through portals, I’ve learned that if the BofA portal website price seems high, you can call the concierge who has prices that are usually the same as the airline websites charge. And if they still can’t sell you the ticket you want, or their price is still higher, they will let you book it yourself while they wait on the phone, redeem your points for a statement credit at the same 1% rate as cashback but then give you a 20% point refund in a week.
For example, a few months ago they could only sell me a JetBlue Blue ticket (JetBlue isn’t even on their portal but is available when you call) but not the cheaper Blue Basic ticket, so I booked the $200 Blue Basic myself on JetBlue.com while the concierge waited on the line, she saw the authorization and redeemed 20,000 points, and I got 4,000 points back a week later. That single $200 booking cost the same number of points it would take to redeem $160 cash on the standard PR card, and I even earned more points, because I still got 3.5x points on the $200 ticket I booked myself. Essentially, if you redeem $500 in airfare per year by using 40,000 points, the 10,000 points saved takes care of that last $100 of the annual fee.
I’ve used the BofA concierge to book $10-20k of airfare for family trips overseas, which made my points worth $2-4k more compared to redeeming for cash back on the regular PR card. One or two bookings essentially paid my annual fee for 5+ years.
Thanks for the interesting data point!
One clarifying question: do you exclusively redeem accumulated points on airfare for the 25% bonus? Or do you occasionally redeem for cash? If you don’t have sufficient points to cover the full airfare, you can’t do a combination of cash + points, right?
My goal is to exclusively use points for airfare to maximize their value, but I have racked up so many points from paying estimated taxes that I sometimes wonder if I should cash out to earn interest instead, keeping in mind that any interest earned will result in paying income tax. If I have 100,000 points, I could cash out for $1,000 and earn about $40 per year in interest. However, I pay close to 50% income tax between federal, state, and NIIT, so I would only net about $20 per year. Since 100,000 points is good for $1,250 in airfare, I could leave the points on the card for 12 years before booking airfare and still break even. This is obviously an extreme example of not traveling for a long time. And you could also gain a lot more by investing the cash in a stock or ETF, but your investment could also decline.
If you don’t have enough points for the flight you want to book, you can pay for the difference with the PRE. The points are still worth more for that part of the airfare. For example, if you have 16,000 points, a $400 ticket would cost you 16,000 points and $200.
Thanks for the thorough response! Accumulating unused points has always bothered me (due to forgone interest, etc), but with the 25% multiplier and 50% marginal tax rate, your logic is spot on. Even with my lowly 30% MTR, redeeming on flights is still a no-brainer.
I just spent $4.4k on airfare a few days ago. I’m kicking myself for not having a boatload of PRE points accrued.
You’ve convinced me to get the card in early December, go for the triple dip, and reassess in Jan 2027. I think there is a high likelihood I’ll keep the card. Thanks again!!!
There’s one more thing I wanted to share… Last week, I booked a flight in the premium economy cabin to Asia using my PRE points to take advantage of the 20% point discount. I told the BofA concierge what exact fare class that I wanted, because that airline requires a certain class to use points to upgrade. I then transferred my Capital One points to that airline and was still able to upgrade to business class!
Interesting!
A few questions:
* If you are such a fan of the BoA PRE card, how did you stumble into Capital One points? Was it simply a sign-up bonus or do you use a Capital One card for non-PRE spend?
* Any reason this particular booking required concierge vs portal? How cumbersome is concierge vs portal? I imagine it’s a PITA conveying date of birth, spelling of names, KTN, etc. over the phone. I recently booked seven international flights with United over the phone (because their website had a glitch) and I found it to be a PITA, and I remain slightly worried there will be a problematic typo in birthdate when we show up at TSA.
* By using Capital One rewards points, you forfeited the 20% PRE discount on the business class upgrade, right?
I think I’m about 10 days away from applying for the PRE.
Wool socks always seem to fall down…even the darn tough socks Ive tried. What am I missing? I see people who just love wool socks and ever time I wear them, I spend the entire day pulling them up. Do you not experience this?
Bummer. I’ve only bought two lengths of darn tough socks: no-show (ankle) height + quarter height (pictured in this post). I much prefer the quarter height because the no-show height digs into my ankles uncomfortably. With quarter height, I’ve never had this issue nor have I had them slip down on me.
I’m on the borderline of L/XL (I have size 12-13 ft), but I’ve found sizing up to XL has worked well for me.
Wow what timing! It was 32F today and those cotton socks within my brooks ghost max 2 just dont keep my toes warm on my walk. I resorted today to double cotton socks. I fortunately dont have sweaty or smelly feet but wool sounds the way to go. I was planning to pick up the costco version but the reviews seem so so (apparently there was a better trail version sometime back that you also mentioned and reviewers prefer that one).
Those darn tough socks you mention are pricy. A few and they would cost me as much as another shoe! But if frugal professor recommends them, they must have value over time! I am going to get one pair (when was the last time i bought 1 pair of socks !) and try them out. Thanks for mentioning them here.
They are pricey indeed, but you can snag them for 25%+ off on sale if you are a bit patient: https://slickdeals.net/search?q=%22darn+tough%22&searcharea=deals&searchin=first&isUserSearch=1&sort=relevance&searchtype=normal&filters%5Bforum%5D%5B%5D=0&filters%5Brating%5D%5B%5D=all&filters%5Bdate%5D%5B%5D=1095
We’ve always gotten 25%+ off. GoBros or REI.
Thanks! Gobros has 25% off right now!. REI which is nearby and has much better return policy has 20% of one item for members but i am trying to decide if i should use that coupon for something of a higher price than socks. I see the picture above on your site is for the lightweight versions. Do you use those or the medium-weight when you hike in winter? I was eyeing these for my freezing walks https://www.rei.com/product/128814/darn-tough-hiker-quarter-cushion-socks-mens
I guess we’ve only owned light weight. I’m sure medium weight would be better for winter, but probably too warm for winter. Probably good for spring/fall.
I’ve sent wrong sized (unused) socks back to GoBros with no problem. They were really good about processing the return. Free shipping as I recall.
thanks! I was thinking of medium weight as a middle ground.
Interesting. While i hate to return items, I may see what fits best at REI and then order from gobros. Maybe they will have an even better sale next week. Also these warm socks may be good for home use for parents though i wonder how slippery the bottom is. Will find out when i test soon.
Finally and importantly glad to hear you sorted out the sinuses and DNS and are recovering. Sinuses get worse with changes in weather and dry air causes its own issues. Hope you get back to normal very soon. Take care
Good luck!
Need more detail on your nose surgery! Been on the fence for years as I have obstructed breathing on one side; ENTs estimate I am a 6/10 on obstruction just using a flashlight, which wasn’t very convincing. I have sinus issues as well. I’ve heard from others that have done it that it has not been life-changing, and it’s been almost a year for them. How are you able to feel a difference in a short(?) time and what made you finally pull the trigger now?
What made me pull the trigger now? We’d hit our OOP max this year. Not breathing has been a bit of a nuisance through my life. Because of my sinuses, I usually get one sinus infection per year. Not the end of the world, but not great.
How bad was mine? My ENT called my deviation “severe” but didn’t put it on a scale of 1-10 like yours.
What was the result? The evening of the surgery, I breathed better than I had in my entire life. It was immediate and profoundly improved. Then came the swelling/congestion/etc for the ensuing few weeks which put a damper on my optimism. I’m about 6 weeks post surgery and have zero regrets.
YMMV, however. Like you, I have a friend who did it too and it wasn’t life changing for him. I guess his nose re-deviated within a year post-surgery. Plus, his recovery was brutal do the use of splints in his procedure. They caused him his most severe pain in his life (inflammation and/or infection?). My procedure was splint-less.
I still have pretty terrible lifelong allergies that impair perfect breathing all the time, but when I stay up to date on nasal rinses, I can tell a big difference with my breathing post-surgery.
I had the surgery two years ago, and my doctor also didn’t rate it — he just said it was the worst he had seen in 20 years 🤣
Are you glad you did it?
The more time passes, the more glad I did. Breathing is underrated.
There was no Reply button after your reply to my last post, which is why I’m replying at the bottom of all the comments….
I had the Venture X card for years, initially for the sign-up bonus but also because the annual fee is easy to recoup, and I was able to give all of my free authorized users lounge access. This benefit will end in February, so I will probably downgrade the card. That said, I took 2 guests into a Capital One Lounge a few days, ago, and we sat down for the cheese tasting experience. It was so impressive that we gave the cheesemonger a generous cash tip when we were done. Definitely one of the best lounges I’ve ever encountered. Makes me consider keeping the card or at least trying to get a retention bonus.
I had to book this flight using the concierge, because this particular airline has 3 fare classes for premium economy (P/T/K). The portal would only show me the cheapest P fare class, but the airline requires T or class to use miles to upgrade. The T fare class was about $64 more each way (not much difference for a $2200 ticket). The K fare class is quite a bit more expensive but not needed for what I wanted to do.
The BofA portal has a Profile page where you can enter all the info for yourself and the companions you travel with… name, DOB, KTN, email, phone number, frequent flyer number, etc. The concierge was able to pull up that info, so he simply read it all back to me to confirm before booking. You get an email after booking, so I always double check for typos. I did catch a typo from a booking a few months ago, so I called back, and they easily fixed it. I know that people generally shy away from booking with travel agents, but I think it comes down to how quickly you can reach them. I wouldn’t want to try to call Expedia for fear of being on hold for hours, but I don’t think I’ve ever had to wait to speak to a BofA concierge. For example, I easily called and got a refund when my mother-in-law’s return flight was canceled about a year ago (I ended up finding a really good deal on a flight with a better connection that I re-booked for her myself using some miles).
I would never pay out of pocket for an international business class ticket even with the 20% discount, especially when you fly to Asia, because you’re you’re talking about $5k vs. a premium economy ticket for about $2k. It would be 400k points equivalent to $4k cash back. Booking business class is where using a card with transfer partners really shines. If I had enough points on Capital One, I would have been able to purchase the entire business class ticket for about 200k points. But since I didn’t have that many points, I settled on using about 100k Capital One points for my upgrade. The difference in fare between premium economy and business class was about $3k, so my 100k Capital One points were worth far more than the $1,250 in airfare that 100k BofA points would get me.
In hindsight, if I had used the Capital One card for all of my non-category spend the past few years, including estimated tax payments, this trip would have been even cheaper, but I used the PRE for flexibility of booking anything I want and not having to plan around award/upgrade seat availability. A few months ago, I used the BofA concierge to book an expensive international ticket with an airline that doesn’t have a relationship with any credit card bank, so getting the point discount was the only way to save on that flight.
I would say that the BofA PRE is still the best for non-category spend if you are going to stick with economy tickets or want a 20% point discount on any cheap fare you can find. If you book business class, you’re better off going with Capital One, Amex, Chase, or Citi depending on which transfer partners you think you will be able to take advantage of and use multiple cards from the same bank to accelerate your point earning. I plan to get a Citi Strata Elite next month to pair with Double Cash and Custom Cash. If you book premium economy, it’s probably a wash between BofA Elite and a card with transfer partners.
Thanks for the response!!! This was really helpful!
A friend/colleague of mine have an almost daily lunchtime debate, spanning a decade now, on cash back vs points. I’m team cash back (these days BoA 5.25% + Smartly 4%), whereas he is team sign-up-bonus + optimized travel partner redemption. For as much as I love to optimize cash back, conversations with him over the years — particularly recently — have convinced me I’m leaving money on the table with my strategy.
I’m a barebones economy kind of traveller (for example, I think I’ve only paid for checked/carryon bags once over the past 20 years…even though I’ve flown economy frontier/united more times than I can count). It’s in my DNA to pinch pennies. Historically, we’ve taken countless family vacations across the country in our minivan. Recently, however, we’ve been branching out with some international trips. Kids grow up quicker than I realized, and we’re finally prioritizing international travel a bit more. And with that reality, I realize I still have a lot to learn still on that front.
Thanks for teaching this old dog a few new tricks!
P.S. Your story about cheese tasting brought back a funny memory. About 15 years ago I was an intern for Delta airlines during my MBA. The obvious perk for working there was free travel for myself and my family. I travelled every single weekend of my internship, mostly to fly back to my wife & kids (who had stayed in UT because it was easier than relocating everyone), but once to Santiago, Chile. I flew business class to Santiago, and it remains the only time I’ve flown business class. After the meal, the flight attendants came buy offering desserts. The vast majority of those sitting in business class a cheese platter as dessert. Cheese. It boggled my mind — seemingly intelligent, rational, and wealthy individuals were almost uniformly turning down brownies, cheesecake, etc….for cheese. Being the unsophisticated individual that I was (and still am), I opted for cheesecake instead.
We are usually very frugal when it comes to shorter trips, booking economy and even refusing to pay for anything but the most basic fare with all the restrictions.
However, after repeatedly flying to places in Asia like Singapore, which takes 20+ hours no matter what route you take, economy is just getting harder and harder to tolerate, so those long hauls are the ones we’ve recently been splurging for premium economy on. This upcoming trip will actually be our first time to experience in business class, because business is just too expensive when paying out of pocket… it’s a small fortune when booking for multiple passengers.
When we decided to take a family trip to Italy a few years ago, I asked my wife if we should splurge for premium economy, and she said, “No, it’s only 8 hours.”
You are making me feel slightly better about having just booked economy to Italy a week ago!
20+ hours in economy sounds brutal indeed.
Great blog, thank you for putting it all out there for us to learn! I will really appreciate if you can help me understand the following:
(a) How are you able to make Roth IRA contributions in 2025 if your income is above $246K?
(b) Why do you showcase the soc. security and medicare taxes? In my case, when I get a W2, these two just show up there in their respective boxes, and I really have no control over it. Am I missing something there?
(c) What are the mechanics of 403(b) and 457? You can’t use that money without penalty before retirement, but can you treat them the same way as 401(k) for matters such as rolling over, IRA conversions, etc?
Thank you!
a.) you can make infinite income and still contribute to a Roth IRA via the “backdoor”:
* https://investor.vanguard.com/investor-resources-education/article/how-to-set-up-backdoor-ira
* https://www.fidelity.com/learning-center/personal-finance/backdoor-roth-ira
* here’s my youtube video on the topic: https://www.youtube.com/watch?v=To8tg0cufpU
There are a few “gotchas”: 1.) ideally, you’d want $0 Trad IRA balance before doing so, 2.) it is best to convert immediately, etc.
b.) soc sec & medicare are part of my income statement, so I include it. I like knowing/tracking how much I pay in taxes. My HSA contributions reduce the amount of medicare taxes I pay (albeit slightly).
c.) some of us are lucky enough to have access to 403b/457 accounts. I have access to 401a as well. They are largely interchangeable, but 457s are generally the best (no early withdrawal penalties). But it’s irrelevant for 99% of the population without access to these accounts. Working for public university helps in my case.
Thank you for answering that! I suspected this about Roth IRAs but wasn’t quite sure. Thanks for teh video link too!
Your blog is so liberating! as are others you link to, though I haven’t gotten to many of them yet. I have already read the incomplete draft of your book, and felt so great learning about the underlying mechanics of the tax code. I have the same deal as you do with 401a and 403b/457. I’d appreciate any tips you might have specific to those.
Cheers!
If you have access to 401a, 403b, and 457, that’s great. At my employer, the 401a is the primary account where I get the employer match. The 403b/457 are supplemental. Given the slightly more flexible nature of 457s, it makes sense to prioritize them over 403b’s. If you are maxing both out, even better, though it makes that point moot.
At my employer, our 401a/457 have access to slightly lower cost collective investment trust (CIT) investments. We’re somewhat unique in utilizing these, however.