Nov 19, 2017 – Updated to add cost of acquiring points.
This article is for my non-travel addict friends who see my pictures on social media and think I either won the lottery and/or quit my job. In fact, I haven’t accomplished either. While it might seem mysterious how I manage to travel “so much”, I want to give you the secret sauce in this post.
There are basically 3 components to my travel: Earning, Burning, and Going.
Earning and Burning
Earning is about getting the currencies that fund my travel. It could just be my paycheck, but the fun for me is to earn loyalty program miles & points and use (burn) them for special experiences. For example, I apply for a Citi AAdvantage card with a sign up bonus anywhere between 50,000 – 100,000 miles; for years I used 67,500 of those miles for a First Class seat on Cathay Pacific or Japan Airlines between US and SE Asia. The First Class experience (more than the seat) is incredibly luxurious and expensive, rarely pricing below $5,000 each way. While that particular redemption rate has increased significantly, flat bed business class redemptions are still viable and my go-to option these days.
Cathay Pacific First Class Suite. Credit: http://pointsfromthepacific.boardingarea.com
How about our unforgettable over-water bungalow in Bora Bora…
Hilton Bora Bora Nui
One of the best uses of points is for these aspirational experiences – priced out of reach for most, were it not for points. The key to earning points is credit card rewards, and some cards can be churned – gotten again with the sign up bonus. Rules differ by bank. Read sites like Doctor of Credit and Frequent Miler to master the basics.
Efficiently redeeming points for travel is confusing, intimidating, and frustrating for most people. But once you get the hang of it, it can lead to incredible experiences and cost saving. I haven’t analyzed my annual travel-related expenses in depth, but I’m fairly confident it’s around $4,000: $1,000 to acquire the points used for travel, and $3,000 travel expenses – including airfare, hotel, car rental, tour, and admission for all trips (I don’t count food because it’s about the same as my everyday cost). Not bad for 75,000-100,000 miles of flying and ~50 days exploring the world.
Now that you know how I fund my travel, let me tell you about the actual travel.
Going
With a good amount of miles and points, most of the world is at your fingertips. Wanna do a wildlife safari in South Africa? 70,000 Alaska Airlines miles gets you First Class on Cathay Pacific from US to South Africa. How about a week appreciating the food and history of Italy? 55,000 Air Canada miles for business class. Machu Picchu and Galapagos Islands? 30,000 AA miles in business class. With a little strategy and discipline, earning all of the above points for two travelers, round trips, in a year, is not hard – for now.
Which is to say, earning and burning aren’t an issue for me (for now). The most precious resource is time.
Glacier hike – Torres del Paine
Ideally I’d like to travel 100 days or more a year, but I work full time. If I add all my paid and unpaid time off, company holidays, and associated weekends, I have about 50 days total. I use most of that time for my travel passion. My realistic goal is 3 intercontinental trips a year, plus a few domestic trips. I wrote about some of my strategies for maximizing limited vacation time.
So really, I’m only gone about ~15% of the year 🙂
What about your credit score?
I get this question a lot. Many people assume because I got a bunch of credit cards, it has negatively impacted my credit score. The opposite is true. My credit score is considerably higher now than it was before I started the hobby, and it’s because of how credit scores are calculated. The number of credit inquiries and new accounts is a low impact factor in the calculation, while debt to credit ratio is a high factor. More cards generally means higher total credit line, which makes your ratio more favorable for the credit score calculation.
In a nutshell
Friends – this blog will be my creative outlet. I will chronicle my journeys here. I’ll share my thoughts & tips related to travel. Join me in this new adventure – subscribe to the blog and be notified of new posts. If there’s anything you’re curious about, let me know and I’ll write about it or get back to you.
One suggestion – if you want more tips on affordable family travel, check out the other great resources on Saverocity such as The Deal Mommy and As the Joe Flies. I’ll tell you how I enjoyed South America on my own; they’ll tell you how they did it with their family of 3/4/5!
Any questions?
The 67,500 AA miles redemption for Cathay first class to Asia is long gone. While it’s a great illustration of what once was a good deal, maybe mentioning the 110,000 current price with one seat per flight available in advance would be both fairer and more realistic for people new to the “hobby”.
Agreed. Updated post to be clearer on this.
Good post. Your link “subscribe to the blog” isn’t hyperlinked.
“I haven’t analyzed my annual travel expense, but I would guess it’s around $3,000 – including airfare, hotel, car rental, tour, and admission for all trips…Not bad for 75,000-100,000 miles of flying and ~50 days exploring the world.”
I find this odd you don’t have a better grasp of your annual travel expense other than a guess. Does your number include credit card annual fees, award booking/cancellation fees, manufactured spending costs etc.? It would seem a more concrete number of your costs would help newbies in your audience better gauge if adopting “travel hacking” is worth the effort.
“70,000 Alaska Airlines miles gets you First Class on Cathay Pacific from US to South Africa…55,000 Air Canada miles for business class…Machu Picchu and Galapagos Islands? 30,000 AA miles in business class. With a little strategy and discipline, earning all of the above points for two travelers, round trips, in a year, is not hard – for now.”
Earning 280K Alaska miles for two people roundtrip to South Africa isn’t hard for now? Please define “not hard” that still stays within your $3000 per year travel expenses.
For that matter how does a couple get the 220K Air Canada miles needed to fly round-trip to Italy that isn’t hard? I suppose if both got an offer for a 100K Plat or both got personal and business 100K offers or some combination thereof. But that’s potentially $2200 in annual fees right there for one intercontinental trip. Or maybe your secret sauce is churning the Aeroplan card to keep your costs less than 3K?
The 120K AA miles to South America for two is really the only realistic example I see here, But that’s sustainable maybe into year two and certainly not going to get anyone 6 intercontinental trips.
Or do you have some other tricks you intend to share that would paint a picture of how your audience could realistically emulate your 3 intercontinental trips per year?
“Does your number include credit card annual fees, award booking/cancellation fees, manufactured spending costs etc.?”
It didn’t include cost of acquiring the points. Updated post to include it.
“Earning 280K Alaska miles for two people roundtrip to South Africa isn’t hard for now?”
Two player mode, each person needs 140,000 miles. Get AS personal and business cards, churn business card (not subject to 2/3/4 rule), get 2 SPG cards. Meet minimum spend on each.
I admit this one is a bit of a stretch.
“For that matter how does a couple get the 220K Air Canada miles needed to fly round-trip to Italy that isn’t hard?”
Two player mode, each person needs 110,000 miles. Get 2-3 MR-earning Amex cards (there are so many). Meet minimum spend on each.
“But that’s potentially $2200 in annual fees right there for one intercontinental trip. ”
You need to subtract the value of the airline credits from the annual fees.
I wasn’t saying I can earn the exact same currencies each year, but I can earn similar currencies that fund 3 intercontinental trips a year, year after year. When I said “not hard”, I meant for me, not necessarily for a new reader.