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1071 points mtlynch | 2 comments | | HN request time: 0.425s | source
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rexreed ◴[] No.39402415[source]
Looks great. As a note I don't count credit card rewards as revenue, but rather I count it as an offset to expenses. In this way, rewards don't add to the top line, but rather improves the bottom line. Basically I consider it a way to discount my expenses, or as a negative expense. The reason is because those rewards are linked to expenses. If you spend more, you get more rewards. Spend less, you get less. You can't increase rewards (generally) without increasing expenses. So I see it as a way to discount or reduce expenses vs. increase the top line. Long story short, if you see your rewards increasing 10x that means you've increased expenses some factor of 10x which isn't so great. You could list rewards under the "Everything Else" line of expenses as a negative expense in red. The result will be the same on the bottom line but it won't be misleading the top line, which should be driven as high as you can.

Also those cloud expenses look significant. That looks like an 80% increase year-over-year which is substantial. Is there a way to shave off a significant amount by moving to a different method for architecture? Or will that break your system? I worry about rapidly growing cloud expenses especially when you're not that huge of a company.

Finally I'm curious about those dividend earnings! Living off them is great, especially as you were doing so in the lower-interest rate years. Can you share insights in the high yield dividends you're earning that are also low risk enough that the underlying investment value doesn't erode?

replies(2): >>39402568 #>>39402989 #
1. codegeek ◴[] No.39402568[source]
Agreed. You should not include rewards as revenue. That is incorrect and misleading. I get lot of credit card rewards for our business but it is definitely not revenue. If anything, some accountants will argue that it is actually an income for yourself if you redeem them.
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2. jjeaff ◴[] No.39403499[source]
Unless this has changed in the last few years, credit card rewards are non-taxable income. you can personally keep the rewards and not claim this as income. I'm pretty sure this is still the case because if it wasn't my cash back card would be sending me a 1099.