On upromise and market performance...

I've been a member with UPromise since 2001. I always thought the idea is great. While it's just another rewards program, there's no limitation on how much you can earn, and you can earn cash back to your account from a garden variety of purchases, including grocery, dining out, gas, and what-have-you. With the balance, I can direct it to 529s for my kids.

Of course, as in almost everything in life, there's always a catch. Back when I started out with upromise, 529s were all the rage. It sounds good, reasonable and flexible enough. I contribute to 529s for the kids' future education, which grows tax free.

So, I signed up, and over the years, I've accumulated a modest balance with upromise. I never did anything with the balance, or directed it to any 529s after I read the fine prints. That's because the choice of 529s from upromise was (and still is) so limited, and the fees are so high, that I don't think it'll ever worth the effort. Since my purchase never contributes significant amount to upromise year on year, I reckon just the account maintenance fees of those 529s alone are enough to wipe me out in a few years.

The balance continues to sit there, with occasional injection from purchases from supermarkets. I used to have a upromise credit card that gave me 1% contribution to the balance, but since I've decided that I'm not going to do anything with this balance, I canceled the upromise credit card, and got another credit card that gives me 1%-5% cash back (yes, cash!).

As the financial market unfolds (since the subprime mortgage mess brought everything to its knees), I'm somewhat taken by surprise the silver lining in it all. As I watch my 401k (and the broader stock markets) lost 50-60% of the value, it dawns on me that, it turns out to be a very good decision not to have invested my upromise balance to the 529s. If I had invested the balance, not only will I have to feed the 529 funds with account fees, but I would have lost at least 50% of that balance. Some nine years on, it turns out that, I was winning out by not investing and sitting on my hands (and cash), however modest the balance might be.

I'm sure upromise loves me though. I let them keep my money, with no interest paid to me.