Sometimes the path a dollar takes through a loop during advanced manufactured spend is staggering; As a semi-real world hypothetical, a manufactured spender might loop money around with a recipe like:
- Run a charge with credit card on a fintech (earn on spend, perhaps pay a load fee)
- Use a fintech virtual card to load another fintech (earn on spend, perhaps pay a load fee)
- ACH out of the second fintech into a bank with a rewards debit (no earn or fee)
- Pay the original credit card with your rewards debit (earn on spend, perhaps pay a payment fee)
Most of those steps have an earn component, and most have a fee component too. Calculating your total earn is really just a matter of adding all the earn and subtracting all the fees, and the goal is that the entire loop earns a nice spread.
Once you’ve developed a money loop like this, it’s easy to think of all spend fitting into the loop in someway.
But, and here’s the point of today’s article:
Sometimes skipping the middle steps earns just as much as the loop you’ve developed, or maybe earns slightly less but loops faster. Sometimes simplicity wins.
Have a nice weekend!
Simplicity can go too far, or sometimes not too far enough; which one is this churner’s house?