What’s the “Point”? Saving Money vs. Living the Life

I collect about 2M points per year through natural business spend. (I can boost this by 15-25% through churning).

At $0.01/pt this represents a conservative minimum $20-25k annual bonus if used to "save money" and book Y fares or statment credits. (although I will use points for Y in high season, or when I can get more than 0.02cpm).

Meanwhile taking 5-10 long-haul flights in F and J while staying in aspirational hotels with my wife, family, or friends, represents an annual bonus of approximately $200k per year at a $0.10/pt valuation. Then think, marginal income tax would be 50% in that bracket, so now that $200k in travel would actually value closer to $300k in pre-tax income.

How’s that for opportunity cost? 😉

Great post as always! Theoretically we all would love to travel using all of these principals but in my (and assumingly all) travel experiences we situational travel. As mentioned mortgages, savings, affording life seemingly always gets in the way for everyone and this is why we off set the travel with points. I don’t think my experience are opportunistic travel but rather situational. As a teacher travel at peaks times all the time requires proactive planning and resources to see value, redeem value and “save” money in the process. I will always and have always redeemed 25k aeroplan miles for a RT to Florida at Christmas over forking out $1200-$1500 in cash value. On the opposite end of this spectrum I have also spent $321 for a oneway ticket to LHR from YYZ to connect elsewhere over the 30k AP miles for the same flight. For me travel is part of life experience and I want that for my children and my value will ultimately be different then others due to situational travel for many different reasons.

In my opinion, I spend money on credit cards and I spend money on travel no matter what, so why not make the most of it!

When I was younger and had a mortgage, my priority was to save money (in absolute dollars). Even though the mortgage is now paid off, most of our spare income now goes towards our children’s RESPs and to a lesser extend RRSPs and TFSAs. However, points and miles allows me go on dream vacations that I would never actually do if I were paying cash. Do points and miles actually save money? I would argue that once the credit card fees and hassle of keeping track of all the credit cards is taken into account, the savings is marginal compared to paying cash and travelling in economy, which is the only travel I would consider paying for out of pocket. However, with points and miles I can now send my parents in business class for less than the price of an economy ticket. Helping those you love, who have worked hard all their lives makes it totally worth the effort. And this year I’ll get to enjoy business class with them. 🙂

Excellent post, Ricky! I really enjoy your reflective posts and you are hands down the best Canadian blogger. I have been thinking about the utility of this game for an average collector, not someone who can build a business from this.
1) What is the value of these rewards? Let’s use your 2 player mode example, "543,000 MR points, 72,000 MR Select points, and 251,000 Marriott points. The cost? A not-at-all-insignificant $3,246 in annual fees and $59,500 in minimum spending." I would venture that most couples won’t be able to meet this yearly without MS. Nevertheless, let’s assume 3 mRTW, 5 nights at top hotels. Let’s value it at $25,000 for the above, so the net gain is around $22K/year. However, would you exchange $22K for all your points, $20K, 15K? I think most people would, so the real value is much less.
2) Time vs savings. It’s not easy to book mRTW for an average collector. you have to be flexible with travel, be able to get time off, etc. And does this really fit in with your personal travel plan? Are you travelling more to get "good value."?
3) Perception vs reality. It feels great to sit in a first class lounge, eat nice meals on plane and sleep flat. On the other hand, it’s still a small space, uncomfortable bed and less than Michelin star meal.
4) I think this is the big one, opportunity cost. How much time does this hobby take? Just to know the basics, it take many hours reading blogs, reddit, etc. What about the actual travel time? What if this time is invested in further education, career advancement, etc? Would that pay off much more than perceived value from points redemption?

This is off topic, but something I wondered about. Most travellers extol the value of travelling as a way to meet new people, learn new culture and gain different perspectives. However, I don’t think it’s true. You could go Alabama and if you only stay in the capital city, you won’t know it’s a conservative territory. My feeling is that your experience will be skewed depends on who you meet (and keep in mind, most people in the city has to work, study and won’t have time to entertain a stranger). I would think you could gain much more by reading on the topics, and save much more time!. Not to say travelling is not important or fun, but I don’t think one should use this for gaining knowledge/perspective etc.

Just my thoughts, curious to see what other think.

I’m kinda at a cross roads in my Miles and Points journey – I’m “rich in miles and points” but “time poor” in actually using them.

Also, I’m somewhat caught up in the whole value aspect of my miles and points in the sense that I want to save them if the value is poor in hopes that I’ll be able to have a much better opportunity to use them in the future. Opportunity costs are knocking… use 75K now for a NA flight for 3 at the cost of not being able to have enough points for a mini-rtw for 2 in the future.