Happy

My last OT post. Sorry Andy2 but this would be it.

There is no absolute certainty to the future, everybody knows that. It is almost a moot point because it is the fact that no one, Sir John included, can tell exactly how future would turn out. All one can go by is a probability analysis based on past, current and some known but not accurate factors in the future.

And certainly the analysis completely depends on one's own financial situation - whether one is very risk-adverse or one is a moderate risk taker or one is going for high risk high return theory - that is, in the financial world. Or, some are just plain naive. You can add the investors or employees of the companies like Enron, Worldcom and countless highflyers in the 2000 bubble on your 2 names short list about how they had lost their shirts by miscalculate the future outcome or simply being dumb / naive / gullible... (endless adjectives can be appended here...

However, you can also see how investors in the names such as PCLN, NFLX, BIDU, and a long laundry list have been obscenely rewarded by their risk-taking.

Still, to equate an investment to a cost paid to acquire miles is a case way way overkill, to me anyway.

After all, how much hard earned tax $ we are talking about here? A few hundreds? A thousand? That depends how many mile bonuses you acquired and also which tax bracket you are in. I seriously doubt anyone posting here would incur a tax bill of a thousand related to Miles. It is the tax owed, not the taxable value. I am sure everyone understands the difference.

The absolute amount in the big scheme of things, is small enough to be ignored.

It is the rub on the emotional side gets to people, me included as it seems so "wrong" to make miles taxable. Not to mention that 99% of folks have gone in this without any idea that they would eventually owe taxes and have to pay their own $ on the tax owed. So all of a sudden, those miles are no longer free - they carry a cost.

Incidentally I knew about the taxable nature by way of being lured to open a saving account at our neighborhood BofA branch years back and was quite surprised to receive a 1099 on that measly $25 bucks account opening check... Did some research, learned the matter and stayed away from banking product bonuses ever since.

But if one sits down and does an actual cost / profit analysis, it may not be all bad. This analysis should be done BEFORE one gets into the deal. I did it several years ago when Citi kept offering bonuses on TYPs and Miles for opening "free" checking accounts and saving accounts. I decided that I didn't want to deal with 2 major headache - to make sure Citi post the bonuses as promised AND to deal with reporting additional taxable income derived from bonuses earned on banking products.

Unlike many here who want to pay 0 for their miles and points, I am willing to pay some costs as long as after the costs I can still make out 3x or many times more - because without the miles and points, I will part with much much more my hard earned taxable dollars unless I just sit at home and not going any where.

Andy2, I will stop reply on OT post and let you guys figure out how to sort out this 1099 mess.