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Helping you and your family save money on your vacations to Disney and beyond

Reselling isn’t for everyone – including me

Ever since the death of AMEX prepaids, reselling has become the new manufactured spending. People are calling it the future of MS, while others are lamenting that it’s going to burned before we know it like many other aspects of this game. So of course, being so hip to the things of today, we had to discuss reselling with Oren from Oren’s Money Saver on Episode 21 of the Saverocity Observation Deck podcast.

Oren will be back for Episode 24 as you may have heard from him and Trevor. We’ll be recording and it should drop on Tuesday or Wednesday. In the weeks between podcasts, I’ve been asking myself the question, is reselling for me? The answer to that question has been an emphatic no – and here are some reasons why.

I can conceive no possible scenario in which it is “easy”

My main issue with Matt’s post about reselling the other day is this – I don’t think reselling is cut out for lazy people like me. Redbird got killed because it was too easy – I mean you just had to go to customer service at Target and swipe your credit card for a few months there! Are people with dead Redbirds naturally going to look into reselling as the next best thing? I’m sure they are.

But I’m sure they will bail. As far as I can tell, reselling involves:

1 – finding a product below market price

2 – figuring out what earns you the most points off purchasing that (portals, type of card, etc.)

3 – purchasing that product

4 – listing that product on Ebay or FBA or some equivalent

5 – finding people to buy that product without getting undersold by competitors

6 – packaging the product to ship it out

7 – dealing with any returns/defects/hassles associated with the product

8 – figuring out all the taxes you owe Uncle Sam due to the sales of your product, including figuring out what you bought that is eligible to be a business expense and who knows what else taxes taxes taxes OR

9 – dealing with the IRS for tax evasion

I mean, I am a neophyte, but that seems to me like the bare minimum of work you have to do to make a profit (in both cash and points) from reselling. If you are reselling at a loss consistently you probably are doing it wrong. Absolutely zero of that seems easy to me nor is it in the least way appealing. I’m not sure why the masses moving from Redbird would think this is a viable “easy” replacement either.

Reselling seems a lot riskier to me

OK, so Tahsir had to talk to the cops and buying money orders looks shady, but in general the majority (but not all) of risk in manufactured spending is all tied up in your float. And if you have $3000 tied up in some credit union because they’re mad at you or you lose a $500 gift card that is going to be a big punch in the face (don’t lose gift cards).

Reselling still feels way riskier to me than that. Let’s say I get $3000 tied up in some account that’s under review. I might have to wait, which sucks, or might have to fight for it, which sucks even more. But I don’t have 200 Furbys sitting in my living room and witnessing steam wife come out of my ears because of it! The physical space it takes to resell makes it feel riskier to me.

Even more so, reselling is subject to market fluctuations. Gift card and money order risk is mostly limited to my organization system and how many red flags I’ve raised for the banks. But reselling involves an understanding of the products you are buying – the supply and demand of them, who your competitors are, and probably a bunch of other things I can’t think of. There’s always a risk I can only sell my $3000 worth of Furbys for $2800. I can always redeem $3000 of money orders for $3000 – provided I don’t lose them.

Points are a means to an end for me – but in reselling points are a byproduct

I’m on record – we are lucky enough to have two stable jobs we enjoy (which is important here I think) and the ability to travel whether miles and points existed or not. To be a good reseller, you should be making money – straight cash, homey. The miles and points you generate are a byproduct of all the purchases you make, but you should be making money from the sales, or at least breaking even. That’s after taxes, fees, shipping costs, etc. etc.

You know what makes money? Jobs. And as Matt alluded to in his post, reselling is essentially a job. I don’t want a second job. This blog is a hobby – I don’t expect to make money from it (not even beer money like PF Digest!) and I just do it because I enjoy writing, helping out here and there, and documenting my travels. If only my mom read this my world would not end – though I am pretty sure she doesn’t.

So in some senses, for reselling to work for me, I’d have to be gaining something out of the very act of reselling itself. I mean if I’m going to take on a second job, it better be a job I love. Except I already have a job I love so I don’t really need a second one of those.

Which brings me back to my end: my end is to travel more comfortably with my family and spend more time with my family. Adding a second “job” in reselling would end up working counter to that goal in my personal situation. I need hobbies to stay sane, but I also need balance – a second job wouldn’t help with that.

Final Thoughts

I’ve outlined why reselling isn’t for me, but maybe it is for you. For me, there are too many barriers to entry, too many risks. I’m sure that makes the old guard of resellers happy to hear. I’m also sure they’re willing to welcome in newcomers who are willing to put in the work.

For those of you who are willing to do the work, we’re taking questions for the next Reselling based podcast with Oren and Trevor. Head on over to Oren’s post and drop us a line – we’ll do our best to get to as many possible (or maybe plan to record a third!)

How much would I pay for an Ultimate Reward point?

Free-quent Flyer kicked off an interesting discussion on Twitter the other day:

 

It’s something that we brought up on Episode 23 of the Saverocity Observation Deck last week. As Matt explained on the podcast, his answer wasn’t to troll (well, mostly); he was saying that if you need a certain amount to complete a redemption then the amount you are willing to pay goes way up. I agree with Matt, but I’ve been thinking about something else he said on the podcast all week.

I said that I would probably speculatively buy UR points at anything less than 1 cent per point as long as it didn’t require me changing out of my pajamas. Matt countered with this point (paraphrased) – “if you’re getting enough value out of it, shouldn’t you be willing to pay more than one cent per point? One cent is just the absolute minimum you can get in return.”

His reason for this is what he calls the “double pivot” – aka the two places where you can use miles and points to save money on travel. The first pivot is in the acquisition of miles and points, which I admittedly am not that great at. The second pivot is maximizing the value out of the miles and points you earn, which I have a much better eye for.

So I’ve been spending the last week mulling over how much would I pay for an Ultimate Reward point? This is especially apropos considering the news that Chase is going all DEFCON 2 about credit card stuff – if I’m not gonna be able to bank Hyatt free nights or United miles via credit card bonuses, how much am I willing to pay for them?

Here are the things I have been thinking about – written both so I can clarify my own thinking and also to hopefully spur others to come up with their own evaluations as well!

Factor 1 – What are my travel goals?

I’m on record saying that my goal isn’t to “fly for free.” My family would set aside money to travel every year even if we were paying cash. For me, the goal is to use miles and points to either

a) save money

b) make travel more comfortable

c) both

I am not against spending money. But if I can save a little money or use the same amount of money to fly in business class, I’m all for it. This affects how much I am willing to pay per point because I can think of the money I pay for UR points as paid upgrades on economy tickets if I’d like (in the case of airlines) or think of it as subsidizing more expensive hotel rooms (Hyatt).

Factor 2 – What am I really going to use the points for?

All of the valuations out there take into account all of the transfer partners, but my personal reality is that I only really use two of them regularly: United and Hyatt. So when figuring out how much I’d be willing to pay for these points all that matters is how much value I can get at United and Hyatt.

Would I redeem for Korean or Singapore? I wish, but with a family of four I’m probably not gonna get four first class tickets on either of those airlines (well, maybe Korean). Though if that were my goal (and I was confident in the availability), that would skyrocket the price I’d be willing to pay…to a certain extent.

Factor 3 – How much would I be willing to pay for travel out of pocket in the first place?

Dia recently wrote a post about how she’s stalking Gwen Stefani or something like that. She makes a great point which is she would never pay $2500/night for a room in the first place. (I think later on Twitter she confirmed that her price point would be $300/night max or something? Don’t quote me on that).

When I first got into this game, I used to be suckered into that kind of thinking – “aw snap I got a $10K first class Lufthansa ticket for free baybee!” But that’s not really the case, and it’s even less the case when you are looking to spend money for points outside of credit card bonuses (which, again, bye bye Chase). So the question is, how much would I really be willing to spend?

For a hotel room for 4, maybe $300/night now max? For roundtrip tickets to Europe in the summer during school vacation, $1200? For roundtrip tickets to Asia over Christmas, $1800? Those are obviously moving targets, but those are targets that matter when I’m thinking about how much I’ll spend on points, because that brings up:

Factor 4 – How much value can I redeem the points for?

My valuations of how much UR points are worth are variable to my own tastes, needs, and current opinions. So the question for me is how much can I personally redeem the points for at this particular point in time.

As Matt says, if you’re good at finding saver award space, you might be able to redeem for a much better value. But that value for me has to be in line with how much I’m willing to pay for the travel in cash.

As an example, we’re going to Aruba where the going rate for the Hyatt is $500/night when we are there. That’s a bit steep for us, but using cash and points, we are paying $150 out of pocket and 12,500 Ultimate Rewards points. (As an aside, when booking hotels, you might want to check FQF’s imputed redemption values first but that’s a whole other ball of wax). Ignoring points we would have earned paying $500 cash for simplicity (though we would not have stayed at that hotel at that rate), I’m getting a value of about 2.8 cents per point. So if I got those points for anything less than that I’m winning, right?

It’s easy to think that, but in my personal case, that would be wrong. Remember, I said that I only wanted to pay $300 for a hotel room. Since I confirmed a Diamond Suite upgrade, let’s bump that up to $350 (if they offered me a suite twice the size for $50/night I’d probably take it). If I paid, say, 2 cents per Ultimate Reward point, I’m a loser in this scenario. 12,500 points would have cost me $250 putting my total cost for the room at $400 – above the threshold I’d be willing to pay in cash.

While that might seem simple to some, it’s something I find it’s easy for me to forget in the “excitement” of a deal.

Factor 5 – What are the odds I’ll be able to redeem these points at a price I’m happy with?

Having points is great, having points that you are having trouble redeeming is not. For hotels, while cash and points is preferred, you can always book a room completely on points at the Hyatt if there is a room available (hence the necessity of the imputed redemption value table). For airlines, saver award space isn’t necessarily easy to find. While I’m generally confident in my ability to find some, the reality is it’s not totally in my control.

So even if I think points are worth buying at, say, 1.5 cents per point, I think if there is difficulty to redeem them that has to take some of the shine off. Even Hyatt takes away some value just because the hotel doesn’t have as large of a footprint around the globe.

Putting it all together

Bringing it back to the beginning – I think I’m still only comfortable buying at around 1 cent per point. Then if I’m “buying” a business class ticket to Asia it’s costing me $1600, which is what I’m okay with but not thrilled about. If I’m redeeming for Hyatt, I’m usually winning, and if I’m redeeming for coach I’m probably winning again. But the lack of a large Hyatt footprint and the difficulty in finding four saver awards severely diminishes that. If I’m booking standard awards in the future then I probably need to get my Ultimate Rewards points at less than 1 cent per point.

Gun to my head, I probably am comfortable paying a little more than 1 cent per point, but the 1 cent value is easy because I can do all of the math in my head. So while I was convinced sticking to 1 cent per point was wrong on the podcast, I think a week of reflection has made me come back to that price point. I’m sure Matt will point out why I’m mistaken about that soon enough. 🙂

Final Thoughts

I’m sure a lot of you out there have factored in all these things when evaluating the price point you are willing to manufacture points at. Like I said, manufacturing isn’t my forte. Still, I found this a useful exercise, and one that I can revisit regularly (with all currencies) to make sure I’m not fooling myself. I’d love to hear how everyone else thinks about/calculates these things, so tell me why I’m dumb!

Your Guide to Starting and Following Twitter Beef

I’ll be the first to admit I’m not the best at Twitter. We can’t all be as hilarious as Matt and George:

That right there is classic Twitter banter – hilarious! Of course Matt has the advantage of having a cool accent, but we can’t all be born winners.

Anyway, if you were on Twitter last Wednesday, you know that all hell broke loose. Some people were discussing the best ways to get sent to jail while other people were discussing um…interesting stuff involving fingers. I was enjoying the show, but was thinking I need a review of all these new-fangled ways to attack people on Twitter. So, here are some good ways to start Twitter beefs and some ways to follow fights so you can sit courtside at all the action!

If you want to start beef…

There are some surefire methods of starting a Twitter fight. The most common is to just mention someone and say that they suck:

Kanye isn’t wavy! Shots fired! Now this wasn’t a direct mention but Kanye’s tweet was quoted so it works just fine. Also, you can see the bonus points here for misspelling a word – that lets people know you really DGAF, which adds to your street cred, which makes your words all the more liable to start something.

Another way you can start beef is via subtweet. When you subtweet someone, you make it obvious you are talking about them without actually mentioning them. It’s the equivalent of talking dirty behind their back. If they follow you, they’ll see it and know you’re “coming at their neck”, if they don’t, someone will still let them know.

Here’s a classic subtweet via Jim Harbaugh:

If you’re not familiar, he got fired and then they fired his replacement (who did a pretty bad job) a year later. This tweet came immediately after that news broke. This subtweet gets bonus points because Harbaugh is dropping Biblical references on Twitter – wow.

A third, way more clever way of starting beef is to send a tweet out that was meant to just be a DM. Something like, “Shoot, that guy is just the gosh darn worstest” <deletes tweet ten seconds later>. That’s even dirtier than subtweeting and will ramp your fights up to 11 instantly.

A fourth way to get a fight going is via trolling. When you troll, you take an unpopular stance for the sole purpose of stirring the pot. Like, “Hey, ______ shouldn’t have the right to vote!” In fact, most trolls don’t even necessarily believe what they are saying. They are just being a something that rhymes with…dick.

But if you really want to get into beef on Twitter, do you know what the most important thing is? Make sure that you TAKE! EVERYTHING! PERSONALLY! Twitter is an amazing place for extended discourse and discussion on complicated and nuanced topics, but it gets even better when you are TAKING! IT! PERSONALLY! (old TWoP reference). It’s the best way to blow things out of proportion.

If you want to follow along…

Let’s say you’re not super confrontational, but you just want to get your popcorn ready. The best way to do that is to create a new column in Tweetdeck following whatever user all the beef is centering around. That way you’ll see all their mentions and everything they say without having to navigate through all the other random stuff going on on Twitter.

tweetdeck

I used Kenny as an example here because you can give him his own column and learn a ton of stuff – though who knows maybe he will start beef sometime soon!

One suggest I have for you fighters out there, if you can spare the characters, give your beef some sort of hashtag. That way we can follow along way more easily! Like #KK or #wavy or #jail.

BTW, you know your beef has hit it big when you start trending. That’s big time.

One serious note…

So I was listening to sports radio today, and the subject of Cam Newton’s dancing came up. For those who don’t know, he’s a NFL quarterback who does some fairly elaborate dances when he scores a touchdown – this rubs some people the wrong way. The host was basically saying, “I don’t like when Aaron Rodgers does the discount double check, and I don’t like when Cam dances. It’s not because he’s black.” Oh yeah, Cam’s black, btw.

Anyway, I take the host at his word that his annoyance is not racially motivated. However, the internet is an ugly place, and just because this host’s annoyance isn’t racially motivated doesn’t mean that some of the people who share the same opinion aren’t racially motivated to feel that way, at least in some part.

So I personally try to be careful not to give fuel to people who will just use it to hate further, even if I think my opinion is as objective as possible. Bigots thrive on people agreeing with them, whether they agree for the same reasons or not. Dat internet…sigh.

Final Thoughts

So…who’s starting the next Twitter fight? It could be you!

 

 

 

Deep Thoughts on Expensive Ice Skating

If you’ve been following my adventures on Twitter or Instagram you’ll know that we schlepped two kids around NYC for the past 30 hours or so. It was a pretty ridiculous trip in every sense of the word, but one of the most ridiculous things I saw was the “VIP Igloo” at the skating rink at Rockefeller.

It feels as if every Christmas movie set in NYC has some obligatory skating at Rockefeller scene. If you are a plebe, you can line up and pay $32 during peak times (plus $12 for skate rentals) to skate. However, if you are rolling in it, you can drop $125 for the VIP Igloo. In addition to getting to cut the line, you get free hot chocolate and skate rentals! Score.

Not cheap!
Not cheap!

Now, when I first saw that price I thought I could never see myself paying that much money (honestly, I can barely see myself paying $44). But then I thought to myself, wait, what if I just MSed that $125. That’s just $6250 on something like the FIDO Amex (RIP btw), so if I wanted to make that $125 I could do it in pretty short order.

That’s when it struck me – why exactly am I considering my “funny money” any different than the money I make in real life at my real job? I mean, if I really wanted to drop $125 to drink free hot chocolate, I could do that on my current salary (BALLIN’). So why, if I theoretically wanted this experience, would I feel better about paying that $125 through MSed money? I can’t really think of a good reason why it should make a difference to me, but it would, just as I’d feel better buying a first class ticket with MSed cash than my “normal” cash.

rockskating

So after I gave up my dream of doing triple lutzes under the tree, I thought to myself that I should be careful not to miss the forest for the, um, trees. There are multiple factors involved in this ice skating business.

Why pay $125? To save time.

What would MSing that $125 do? Result in usage of extra time.

It would be a case of the means to achieve a goal interfering with the actual goal.

There are plenty of other cases when this can happen. You try to maximize miles and points in order to spend time traveling with family, but you sacrifice time with family at home in order to do so. You want to book a premium cabin in order to relax, but you take two extra connections to make that happen. You plan the most amazing Disney trip ever for your toddler only to find she is completely burned out and overtired by Day 2. OK the last one might not be a great example but it is a legitimate fear I have for an upcoming trip!

So as my time gets more and more limited, one thing I’ll be asking myself as we turn the page to 2016 is: “Am I keeping consistent with my goals and my means of achieving them?”

Saverocity Observation Deck 2015 Award Nominees – Part 1

To celebrate a year of podcasting at the Saverocity Observation Deck, we decided to close out 2015 with a bit of fun. Joe Cortez, Trevor, and I convened for over 90 minutes to deliberate the first ever annual Saverocity Observation Deck end of year awards.

If you’ve been listening, you probably know that we don’t take ourselves too seriously, and while we took our award deliberations seriously, the award categories were not necessarily serious in and of themselves. Or whatever.

Anyway, Trevor and I thought it’d be fun to just let you all the nominees before we release the podcast, so here you go. I’ll take the first three categories while Trevor will follow up with the final two over at Tagging Miles. Vote in the polls for your favorites and then stay tuned for the awards podcast which will go live before the end of 2015!

Category 1 – Most Impactful Airline Seat Release/Announcement

Etihad Apartments and Residence

Obviously a big to do was made about this new product this year. Heck, The Points Guy hit the freaking front page of Reddit because of it, which I’m sure is going to be great for the game. On top of the Residence, the first class Apartments themselves are a pretty big deal (Trevor seemed to like them okay), and Etihad took a slight step ahead of Emirates in the escalating first class arms race.

10 abreast 77W/11 abreast A380 in economy

As airlines continue to work on increasing their bottom line, news came out this year that airlines would begin cramming more and more seats into economy. Qatar Airways announced they would be going 10 across in some 77Ws (other airlines have already done this) while Airbus itself said that they could fit 11 across in A380s by 2017. So while first class might be getting fancier for the 1% (plus travel hackers!), the back of the bus is starting to look really crowded.

The increase in premium economy offerings

Singapore, American, and Lufthansa all announced new premium economy seating this year. So while economy is getting super crowded, we wondered whether airlines are creating this “middle class” to up their profits. Well, obviously it’s to up their profits, but we debated whether this was going to have a huge impact on the market.

Category 2 – PF Digest’s Post of the Year

Chase Sapphire Preferred and a Cat

I wanted to put the full title name in the heading, but it’s too long. But for the record, PF Digest’s article “We taped a Chase Sapphire Preferred to a string and dangled it in front of a cat. You won’t believe what happens next.” was part of his very popular Chase Sapphire Preferred week. Out of all the brilliant posts PF Digest had this year, this might have been one of the best.

Credit Cards that don’t exist (but should)

Is this post satire? Is it not? With PF Digest, you never know, and therein lies the genius. In Credit Cards that don’t exist (but should), PF Digest takes a look at…credit cards that don’t exist (but should). Also, I would seriously get a McDonald’s card.

Password Instructions

If you are having trouble thinking of a robust password for all your credit card accounts, take a look at Password Instructions. PF Digest once again takes his scalpel-like satire next level with a list of instructions guaranteed to help you come up with an un-hackable password. Password.

Chase Sapphire Preferred vs. Hello Kitty Card

In “Chase Sapphire Preferred vs. the Hello Kitty Visa Platinum Reward Card: Which is better?“, PF Digest once again asks the tough questions. We all know that credit card applications are at a premium, so make sure you read this before you decide which of these two cards to apply for. I know which one my 3 year old daughter chose!

Want to Get Rich Quick?: Start a Blog!

Finally, in a post near and dear to my heart, PF Digest kills the best deal going: making tons of money by turning into a blogger. In “Want to Get Rich Quick?: Start a Blog!“, he lays out everything you need to become truly successful. I know Miles Per Day read that post, because he was hobnobbing with none other than Finn and Rey on one of his most recent flights. I’m seriously jealous about that one.

Category 3 – Most overhyped/overexposed/overwritten about “news” in the blogosphere

First Friday

Did you know that every first Friday in 2015 you could earn 3X points if you used your Chase Sapphire Preferred? I certainly didn’t but it’s a good thing the blogosphere was there to help me out. They were also super helpful in assisting when you just weren’t sure which Friday was the first Friday. Thanks everyone!

Citibank 50K AA Cards

I was under the impression that you could get a 50K bonus on the AA cards for pretty much the entire year. However, according to the blogosphere, the bonus was only available in very specific time frames. I’m not totally sure what the disconnect was! I guess that’s one of those mysteries that will never be solved…

The Life and Death of Redbird

Redbird? Redbird. Redbird redbird redbird? Redbird! Cardinal. I mean, redbird.

Club Carlson Card Devaluation

Why is it when something devalues it gets written about ad nauseum? Granted, Club Carlson’s free night was a great deal, but once it died, there wasn’t much to write about anymore. Also, I suddenly started hearing a lot less about the Club Carlson credit card, except for from one or two notable sources. Curious.

Every buy miles post ever

Is there a time and place for some people to buy miles? Yes. Does that time and place occur often enough to justify what feels like 10 “buy miles” posts on average per week across the blogosphere. H to the no. For a less salty take, see Free-quent Flyer’s post on buying miles yesterday.

Final Thoughts

We had a lot of fun recording this podcast, hope you all enjoy it as well. It’ll be up soon! In the meanwhile, vote on your award winners and let us know what nominees we missed!