Thursday, February 9, 2012

The Day I Bought $15,000

By Tyler Tervooren, Professor of Riskology

Late last year, my computer was dying and I was upset. Sure, it was 7 years old and heavily worn, but at the time I was trying to save enough money to quit my job and the thought of shelling out more of my hard earned cash to buy a new one was making me grumpy.
At the same time, I was remembering a little trick I’d been reading about on some internet forums where travelers were buying coins from the US Mint in order to rack up airline miles. Here’s how the scheme worked:
  • Buy a bunch of coins from the US Mint on your credit card.
  • Deposit the coins into your checking account.
  • Wait for the deposit to clear and use the funds to pay off the credit card purchase.
  • Use the airline miles gained from the transaction to go somewhere exotic and have a lot of fun.
  • Repeat until you’re tired of traveling/carrying really heavy coins.
Bingo. I wasn’t planning to go anywhere, but I did have a credit card with a high limit and a cash back rewards program. All it took was some quick math to realize I could make $300 to help pay for my new computer for what seemed like very little work. I’d have to cross my fingers a little and try something new, but I liked the idea.
I started floating the plan around to some of my friends and co-workers, excited to hear what they thought of this great scheme, but everyone gave me one of two responses:
  • They thought it was a scam.
  • They thought it was too risky.
How disappointing!
I thought everyone would be excited about this amazing trick I’d discovered. That was about the time I started to realize just how important it is to think for yourself when it comes to decisions like this. When you choose to accept more risk in your life, you’re going to have more and more people telling you you’re foolish.
Learning to ignore that is something I recommend working on sooner rather than later.
Assuming the US Mint and my bank weren’t trying to scam me, that only left myself as the scam artist and I knew I wasn’t trying to cheat anyone, so that took care of that concern. And, there wasn’t really any way around the fact that things might not go according to plan, so I just had to accept that.
I took a deep breath, crossed my fingers, and hit that “confirm order” button. I’d just bought $15,000 worth of $1 coins. Here’s how it all went down:

1 comment:

  1. NPR reported on this last summer.

    Notable quotes:

    "the Mint sent letters to the top abusers and imposed a limit of 1,000 coins every ten days."

    "The Fed, in its latest report to Congress, is also asking for additional changes that would allow it order only the number of dollar coins the economy needs."

    Although it's funny how sickening listening to NPR makes me. This morning they just reported on how the use of any sports ball on public beaches in LA other than govt-approved beach balls will land you with a $1000 fine. They reported this with their typical smarmy voices and state-loving attitude.