I told him it’s all in the math. I have a credit card that gives me back 5% at grocery stores, drug stores, and gasoline. I have another credit card that gives me 3% back at restaurants, office stores, and home stores (like Home Depot and Lowe). I told him the key is that I don’t buy anything that I ordinary wouldn’t and I make sure that I pay off the cards each month. If you pay fees, the whole plan dies a quick death.

When I told him that I got a $1000 back from last year for doing what I normally do, he reasoned that it sounds high, but plausible considering gas prices nowadays. I then showed him that investing $1000 at 8% interest over 40 years makes it $21,724. He said, “That’s fantastic, but it’s still not a million dollars.” I reminded him that’s only the first year of saving a $1000. What happens when you do it the 2nd year for 39 years? That’s another $20,115. Neither of us really wanted to take this example out for all 40 years (we didn’t have Excel handy), but we agreed it would probably get pretty close.

He was quick to point out that inflation would eat up much of those gains. I agreed it’s possible, but 8% return may be conservative. Some portfolios grow at 10% and that would take care of 2% of inflation right off the bat. I was a jackass by pointing out that we didn’t really agree on when he’d be a millionaire.

After that, he conceded that it was an extremely powerful idea. I reminded him that credit cards are just one little thing that he could do. A good place to start is a with these card card recommendations, but again, make sure you don’t pay any fees.