You can only save so much, but you can earn even more

Yesterday, Dan, the infamous writer of Points with a Crew posed the question: “Can you fly First Class Too Much?” My answer was pretty simple:

Of course my comment was tongue in cheek. Of course, I prefer the pointy end of the plane, everybody knows that about me! But, I happened to see more comments on twitter, like this:

and I felt like maybe this was a chance to share what has been a rather central point to my life.

There’s a limit to how much you can cut back, but no limit to how much you can earnRamit Sethi

I can’t tell you when I first read this statement, but it was years ago. Maybe even a decade ago. It rocked my world. It should rock your world too!

I wrote about how how Miles and Points can influence your financial planning strategy, because they can, and should influence your strategy. But the logic is still the same. You can only save so much, and really, when it comes to miles and points, you just shouldn’t. You never know when your favorite airline is going to go ahead and devalue their program, and unlike saving greenbacks or gold, miles more often lose value, than gain value.

All that said, I totally get why folks like Dan would normally be saving his miles. He’s got a crew! like, most folks have a kid or two, he has six, I think… he’s got like a basketball starting line-up, with one back-up, plus him and his wife! A few more, and he could take over entire business class cabins (and he should!). Or he could just go for the gold and go for the starting line-up of a football team. I hear the Baltimore Ravens may be looking for some new prospects (bad local joke, had too!). But eventually, that crew of his will be eligible to apply for credit cards of their own right, and contribute points to the family trips.

That aside. My point is this: focus less on saving miles, and rather focus on your earning power. I get that not everyone wants in the post-RedBird world wants to go buying Money Orders–and in fact, some shouldn’t! But, I would at least hope that folks would acknowledge, your earning potential is significantly higher than your saving potential. Saving is important. I’m not advocating that you go out and burn all 250k AAdvantage miles on a trip to Hong Kong, like a FTer did (and shame on me for not having a link). But, at a certain point, you can only travel so much, why not spend the miles, and travel comfortably, so you can hit the ground running in your destination, and when you come back, you don’t come back exhausted, but rather, you come back with amazing stories, not just of your flights (like me), but of an amazing weekend, week, month, away from work, that was restful, relaxing, and exciting!

14 thoughts on “You can only save so much, but you can earn even more

  1. Thanks for the shoutout and I do actually agree with a lot of what you say here. I’m coming to realize that I have more miles and points than I have realistic time to use them, which is a good indicator that it’s time to be spending more!

    Now if only I could find 8 award seats in First Class…. 🙂

  2. …but that’s only part of the story; the other part is that there are more factors under your direct control with savings than there are with your earnings and more often, the actions that lead to savings are far less of a time suck than the actions required to increase your earnings.

    As your high school math teacher used to tell you – you gotta work both sides of the equation.

    • @Mar – no disagreement, you have to be conscious of both sides of the equation. But the statement that actions that lead to savings are far less of a time suck is not globally true. Think of extreme couponing – that takes a ton of time, probably for not nearly the kind’ve hourly wage you make in your regular job. Now, skipping your morning Latte can actually save you time, unless you need caffeine to be efficient. Ultimately, its a very personal decision, but I’d still argue that you have fewer limits on increasing earning, in comparison on savings. If you spend, lets say, $60k a year, you are inherently limited to $60k of savings, maximum (albeit unlikely). Whereas, if you figure out some awesome side gig, and can get an hourly rate high enough, then you might be able to earn significantly more than that $60k you could in theory save. But the concept of a time suck, is really based on efficiency. I know folks that will drive an extra mile or two to Costco and wait in line to save a nickle a gallon. If you have a 20 gallon tank, you save $1. Was that worth driving the extra mile and spending the time to wait in line?

  3. Good post, thank you.

    Motto: “Earn & Burn” and “Churn & Burn” certainly apply here. You may as well do it if you can. If you start running low on miles switch to coach, but otherwise, if you have those miles — use them.

    I would add that people should really strive for: “Churn & Burn & Save”. You generate so many miles and points that even burning them at high rate you still see increases in your balances, so you start getting real income by transferring miles/points into hard cash or GCs, tax free, and really increase your personal savings rate.



    • @Pedro – that’s a great point. It goes back to the idea that you can always earn more. If you’re capping out on miles/points based on how much you can use, you should definitely shift to cashback, or convert to cashback, as, I understand, can be done with Thank You Points, for example.

  4. To earn more miles, you usually have to do more spending,one way or another, or seek out more lucrative bonus/portal options. Not everyone has access to easy MS, and those who are frugal and don’t have a business with high spending can’t significantly increase spending without MS.

    I’m not a fan of these vague inspirational quotes about how striving higher will get you there. That’s all nice and well, except if everyone reached higher, we’d all be at the same place. It’s a zero sum game. Some exploit loopholes and opportunities not available to others….who in theory would be willing to take advantage. Miles/points, like finance, is a zero sum game. We do well because countless idiots waste money on interest payments.

    • @Rick – I disagree with the idea that this is a zero sum game. Points and Miles seem to be minted every single day, does each have a cost, yes? Same thing with the US Dollar, since it is no longer backed by gold, for example. Does generating more miles require spending? yes, but I would argue it is not a 1 to 1 ratio. Further, all MS is local. Even folks in what is called the “wasteland” of NY, such as Miles Professor and Chasing the Points, have proved that one can do significant MS.

      As far as your comment of “if we all reached higher, we’d all be in the same place.” You are right, but we all won’t. I’d love to see a world of over-achievers. We’d do amazing things.

    • @PointsForLater – you are right. That goes back to my “Big Win” argument, which I’ve borrowed (hopefully without any copywrite issues) from Ramit Sethi. Once new folks to the miles and points game get that first big win (which may be an economy trip, or in another cabin), I would argue that their potential is significantly less limited. I’d go so far as to argue, that someone new to the game would be in a much better position than you or I in the nearterm, because they are not hamstrung by lifetime limits, 18 month churn rules, or 5-24 unofficial rules.

  5. Pingback: The Weekend Entrepreneur - Tagging Miles

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