It’s interesting to hear other people talk about their points and miles woes… a discerning eye can learn a lot about the volume earned, and sophistication of the earner from the way in which things trouble people.
While some people seek to compartmentalize their points and miles life, I like to incorporate it as much as possible. It’s just another feather in the hat, and each component, such as knowing when to earn, or how to burn, has an integrated priority with other aspects of my life. The only constant here is hours in a day.
The economic cycle follows a pattern of peaks and troughs, creating phases of expansion and contraction (recession). If we were to apply that to our own points earning patterns, we could elect to focus and decide upon whether we should focus on expanding or contracting our earning.
It may seem un-American to focus on contraction, but these times are vital in any long term growth strategy. Expansion (in my interpretation) focuses on inefficiency, leveraging any assets possible to increase gross output. In business, you see people leverage debt to hire too many workers to push out more product. But when output hits a certain level, you realize that you need to increase efficiency in order to evolve.
Seeing people at different points on the cycle.
Earlier I referenced how you could see where people were based on how they react to ideas. Some months ago I put forth the notion that ‘fees do not matter‘ when it comes to earning. This was met with disagreement:
Fees can’t be ignored. Not when MSing. Signup bonuses are about the only time they don’t really matter. But signup bonuses are a fraction of my MS and getting smaller as banks clamp down on churning.
So who was right, me, who says they don’t matter, or Paul, who disagreed with me? We’re both right of course – and it is simply that we were at different phases on the cycle. He was in contraction (efficiency) and I was in expansion (volume) phases. Note that doesn’t tell us who is earning more in relation to one another.
It’s time to evolve.. again
If you are currently spending $10K a month on MS, where is the best bang for your buck in 2016? Is it to step to $20K, or to reduce your costs by 20% in order to create a better ROI on the $10K? How can you do either?
Spending time to increase efficiency
This is a tricky one.. the worst thing you could do is spend hours a day trying to improve efficiency… by its nature you need things that offer value in perpetuity. This is a big issue for the ever expanding ‘Hobbiest’ as they race about for the next transactional deal, and ignore things that don’t offer recurring returns. Remember though, that time is money, and the only constant is how many hours there are in a day. If you truly cannot make earning more efficient, can you specialize, and outsource the remainder of the workload?
Applying the same to Burning?
Burning, along with Earning, takes some effort. And while some people tell me they enjoy earning miles, the Burning side of the equation should be more enjoyable. If you can’t find a way to expand (or contract) earning, can you improve the burning side?
One thing I encourage is using award booking services, rather than many hours struggling yourself, but beyond that, what about rethinking the entire process?
When I hear people talk (or moreoften brag) about redeeming miles, it is for a fancy flight or hotel. If we were to focus on either, perhaps the flight, what can be done to make it better? Let’s pick a fancy one like Cathay Pacific First Class. Frankly, the flight is likely OK, and outside of our control, but what is not?
Getting to the airport
How many people book a first class ticket, but then take a crappy bus to the airport in order to save a few bucks? Take that a step further, and consider those who wake up at 2am to make that journey, wait around in a station in the dark of night to catch their connection, and finally get to the airport cold and cranky?
Quid pro quo
Quid pro quo means ‘this for that’. You exchange something (time, money, etc) for something (reward/profit etc). But if you exchanged many hours, or even days, in order to fly on Cathay First Class, but the fun only starts when you get to the lounge, you’ve reduced the hours of good times in relation to the hours of bad times.
However, if you decided in 2016 that you’d approach a trip differently, and start each one with comfort, you can double the time of the event offering value to you, in a positive ratio. For example:
65K points to fly Cathay – taking 14hrs of work over 16 days to earn in exchange for a 12hr flight with 1hr of lounge time = 14:13hr ratio of time.
- 65K points to fly Cathay same hours to earn
- 12K for a SPG hotel at the airport maybe 4hrs more
- $150 car and driver to airport hotel, perhaps another 4hrs
Total earn hours increase to 20, but you get an increase in value that you aren’t driving to the airport, sleep better, and can enjoy from a day earlier on the trip. 20:20hr ratio of ‘good times’.
This might be an interesting strategy to explore in 2016 – how you can remember that each earn hour requires a burn hour ratio, and selling yourself too short, by getting the early flight that makes you cranky, vs getting a hotel, or spending more on a flight that is at a more reasonable hour could be ways to really improve your return on investment.
For what its worth… my 2016 is earn cycle. I’m planning to re-evaluate all my balances and increase earning in order to keep up with my new demands of three seats rather than two, and not getting to the airport cranky.