I asked this question last night on twitter, and got a couple of responses, and I’d like to dive into it further in this post. Let’s say you are starting out today with zero miles and want to cover 5 years of travel like a rockstar.. how much do you need to MS to achieve it?
There’s a ton of blogs out there who promote this lifestyle, and push a credit card or 7 on you to achieve it. I believe that this can be a solution for a trip, perhaps two, but can it sustain the lifestyle that they are selling you? As I think on the topic more I believe it is a double edged sword. If you don’t MS you cannot sustain this for an indefinite period, but if you MS too much, you are wasting your time and effort.
The concept is drawn from recent thoughts on retirement. I feel that many people don’t really know their their retirement ‘number’. The corollary here is that many aren’t saving enough towards it (not MSing enough) and some might even continue working when it is no longer necessary (MSing too much). Where is that sweet spot?
It’s Subjective
This is a great ‘out’ from such thoughts, but there is no way that I travel the same way as you do, nor the same way I would have 2 years ago. Everyone has their own needs. But it doesn’t mean that you cannot ballpark them.
Five years is too long
I’m not confident that we will have award travel as we currently know it five years from now. However, the real goal here is sustainable point generation to meet our needs.
OK – so how much do you need?
https://twitter.com/WandrMe/status/587752862693904385
Remember, Seth has his own, subjective travel needs, but let’s dive into these numbers and see what they could yield. Note, that another person suggested similar numbers:
@saverocity $70K per year incl signup bonuses per person. w/out bonuses $250K per year.
— JB (@and_right_now) April 13, 2015
What will $50K buy you?
An average min spend seems to be around $3,000, sometimes it goes to $5K, or even $10K for Business cards, but the majority hover at $3K I’d argue that we might well see bonuses along the following averages:
- Cash Like 40K
- Transferable 60K
- Airline Points 50K
- Gutted Hotel Points 70K
- Soon to be gutted hotel points 30K
I’m not going to do the fancy chart bollocks here. But if you consider the above, for ‘cash like’ I would say things like the Arrival or the Cap One Venture card. They seem to offer around 40K pts for a ‘cash like’ value. The transferables are Ultimate Rewards and Membership rewards, and if you look at the 50-150K bonuses on offer an average of 60K seems reasonable. Airline points seem to range between 40-60K, with a spike to 100K for the Executive card.
Hotel points are cheap because they have gutted the programs so much – you can easily get big signup bonuses on programs like Marriott and Hilton because you need a ton of points for a night, other programs, like SPG have not devalued, so the bonus is lower…
As you can see, I’m just ballparking here.
How many points can $50K yield?
Again, its all about timing, but if we use $3K min spend goals, $50K in spend will yield 16.67 signup bonus, plus 50K base points. If we pushed the number up a little to include a mix of personal and business cards then perhaps we could say 12.25 signup bonuses (using an average signup bonus price of $4000 spend).
That’s a lot of points right there. but is it enough? That comes down to your ability to travel.
Problems from lack of churnability
Churning cards allows you to sign up for the same bonus many times over. Kenny, from Miles4More apparently churned the AA Executive card 42 times, only surpassed and Phil from MilesAbound who churned it 109 times. However, not all cards will allow such tactics. This can mean that people run out of cards to apply for.
At some point, you need to find the ‘next best card’ in order to fill your 16.67 from $50K capability. Sooner or later, you might find yourself with nothing else to apply for than the Walmart card that comes with a 2 litre bottle of Coke as a bonus….
This is why people want to know the answer to:
How long before I can apply for the same card and get the bonus again?
This ties into the thoughts of Seth and Jon-Bentley from twitter – year one you can make it pretty easily, but year 2 you have applied for the good cards are now need to supplement the ‘dregs’ with more MS. I don’t know about you, but I find this stuff fascinating! Because that $250K doesn’t need to be ‘pure ms’ it could be a couple of sign up bonuses, and then some MS? Or could it be 16.67 signup bonuses that are inferior, topped up with MS?
Could it be that we are just totally forgetting about a slew of cards that mean we don’t even need to up the MS spend?
Getting into a groove
I’ve been travelling for free now for about 6 years, but in that time I have been very blinkered by the manner in which I redeem points. I’ve only redeemed points for flights using AAdvantage, MileagePlus, Avios, and just recently JetBlue. That means that I have never churned the Alaska card (huge value) nor have I redeemed Membership Rewards for ANA (pretty damn good even after a devaluation). I’ve also never actively earned a Thank You Point. Personally I find that I’m limited by my capacity to learn the new programs, especially as travel isn’t that important to me.
Where I’d like to go with this concept
I’d like to really drill down into how much you actually need to MS. The replies above are good, but I wonder if they are limited by lack of vision regarding ‘other ways’ to travel, in the same way that my own approach has been blinkered to what I know best. I’d also like to dive into ‘other cards’ more to see how that works. EG in year 1 you might apply for a certain program, like United and fuel it with a UA card, and a mix of UR cards. Then in year 2 you focus on a new chain, and circle back to UA once you are ‘allowed’ to get new signup bonuses again.
I really think that by exploring this further we might be able to tighten up our game, and waste less time on MS. I’d like to take it further, and once we set targets of ‘I need $50K’ or ‘I need $250K’ we could build out easy packages to achieve this. $50K might sound like a lot, but a single Serve card can yield almost double that.
If I’m doing the math right, that’s ~880k miles/points in year one. Hate to say it, but I’ve had trips where I’ve been burning 400k+ for 2 people. … So, that amounts to like, 3 trips in the first year, give or take… can probably maximize it to more.
As an aside, you might also consider BOFA Alaska Air cards – $89 cost for 25k miles (unless you get one that has the statement credit after $1k spend, in which you just about break even). Those would provide ~25x (assuming $1k spend).
Well then, how many trips can you take in a year? Are you solo or sharing the cost of the room? Maybe it’s enough, maybe it’s not…
Well, with the wife, I figure 2 pax traveling 1 room cost… But, I suppose going with that logic, she’d generate her own $50k worth of MSing/points, which would allow for sufficient trips throughout the year.
I would need either 63.9M or 91.3M hotel points (SPG and IHG respectively) for top tier stays for everyday for five years, I also require 54.9M mileage plus miles for about 183 roundtrip flights in the five years, if I stay at each location for 10 days. Lastly I need $155,125 in cash awards for daily expenses of $85 for 5 years. Multiply all figures by two if I can take my wife.
I think that comes out to around 40B spend.
Not too bad. Probably want to get one of those redbirds or something.
Depends how you define fancy travel and depends how much of it you’re willing to supplement with cash. This summer we’re spending 525K AA/BA/US for 4 people to fly a month mostly 1st class to Asia (Japan, Vietnam, HK). Hotel in suites is cash+points= 100K plus $1100.
Assuming 1 cent MS value/point, that’s $6,625 or approx 650K.
so less than $50K MS?
I MS very rarely, and we have more points from signup bonuses than we have realistic real life time to travel. Now, we certainly aren’t traveling “fancy pants” and we’re certainly not doing it non-stop, but it’s been a fun ride so far!
I don’t always travel fancy pants, but I think that a part of that is that I need to tighten up my game a little. Though I still struggle with things like 3x for a 4hr flight.. see that with BA and Delta (sometimes) so I’ll grind it out with the unwashed when needed.
I have a family of 6 and we do around 2 trips a year that average around 250k for airlines and then another 60k in hotel points. So maybe around 600k a year in points and I give away around 200k to friends and family for trips. We have around 2.7million points saved up now. I’ve been doing this decently for around 6 years now with a few years doing 1 million points a year. This was my first year to do a lot of MS which is a little time consuming but kind of fun. I averaged around 20k a week for 6 months while in America this past fall. Most are sign up bonuses for my wife and I. We live and work over in china so our MS opportunities are limited. I am able to do around 20k a month from here with NWBuxx and 2 target cards I have my brother in law add money to for me.
$20K a month is solid spend, it seems like small fry to what you can hear out there, but it takes care of pretty much any App-O-Rama and adds some extra on the side.
At this point in our lives, two trips a year is all that Husband can do, with his workload. And not more than a week to 10 days/trip.
I believe in earn and burn, and haven’t done tons of MS–we’re about 1/2 and 1/2 on sign up bonuses, right now.
Throw in wanting 50K to 100K/year for offspring to visit us (so they can buy one ticket each, rather than two), and we need about 300K miles/year + 100K A+ for the hotel rooms and other travel costs. I prefer boutique hotels and B and Bs to hotels, so A+ works best for us.
Yeah, family situation matters a lot, I’m actually happy with a bank of 3 seats in coach for many flights now… but for longer hauls we will have to see. I try to keep balances lean and MS no more than I need to.
I keep thinking we will run out of signup bonuses worth taking, and it keeps not happening. Earning enough miles and points for a pair of trips (airfare only) that cost half a million miles each for 4, as well as 8 or 10 weekend trips a year, is easy now. Cashback is our hotel points and its demise is highly exaggerated.
The first year is the easiest because everything is wide open, but it’s also the hardest because you’re likely just learning to MS.
Yeah, and there are so many bonuses that I haven’t even touched yet! The future is bright, even with devaluations.
Matt, Loved the reference “or 7” 🙂
14 years, 70 countries later we still make it on card sign ups and MS to meet the minimum spend. We are averaging 3 card signups each every 90 days so 12 cards per person per year. With over 240 card sign ups in our past, your readers can be assured there are still plenty of new or repeat sign up opportunities out there to fulfill their travel dreams
I agree you can do a lot on just signups- but even if I app o Rama like that I need a little MS to meet spend.
We only travel twice internationally and maybe once within US, per year. For my family of four I find that I can collect enough points and miles with 2 redbirds and 12 or so new credit cards per adult (2) per year. I still have more than enough now to last me 2 or so years but I continue MS for the fun and to keep accounts topped. This is manageable and it fits well enough with my full time job and family duties.
So many variables here.
Some people work full time, so their ability to travel is more limited than someone who is semi-retired or retired.
Some people like international travel while others prefer to stay in the U.S. and visit National Parks, etc.
Then, of course, comes the definition of “fancy pants” travel. Personally, I don’t need to stay in a 5* property to either feel good about myself or to have an enjoyable vacation (If I want to taste Dom or Krug, I’ll buy a bottle).
More modest travel yields more trips, theoretically, for a given number of points accumulated.
Frankly, I find it unfortunate that so many of the CC-pushing blogs concentrate so much on “aspirational” travel, as opposed to more modest travel and learning and experiencing more of the history and culture of the travel destination.
Indeed – it is very subjective… but that was where I was going with this post – how much can you actually travel (realistically speaking) based on schedule demands.
One thing I somewhat disagree with is aspirational travel becoming bad just because of the pimps- its still perfectly OK to fly in the front of the plane and still enjoy the culture and history of the destination (though I would guess most do not do this).