B (3:07)

I think so. I think that popped up and it was a great redemption. I think you were able to transfer Capital One to that.

A (3:12)

Yeah, it was genuinely unbelievable. So I got like the best flight of my entire life thanks to you finding this thing that I had no idea even existed. The community is certainly going to benefit from your expertise today. We're going to start on eventually getting down this line. Even though Travel rewards is, as you know, it's a pillar of the FI community, I really haven't done a ton of content on it in the last couple years. And that wasn't by any particular strategy. It was just more an omission. I'm going to have a woman named Devin from point me to first class. And, you know, you're going to come on for a bunch of times and I think we're going to reintroduce this to the FI community. So we are hopefully going to do a little case study towards the end. Let's start with. You came up with this really amazing outline for an episode. I think where we want to start is travel rewards for the FI community. So with Devin, we're going to do the. The intro again kind of Travel Rewards 101. But let's do travel rewards for the FI community. So I think your first starting point is rethinking cents per point.

B (4:16)

Yeah, absolutely. I've been happy to be a part of the FI community, and I try to think about what's going to be really useful for everyone in the FI community to know about travel rewards. This can be a very broad topic. There's lots of specific situations to individuals. There's lots of different ways to approach this. You know, lots of different goals that people might have. But when I tried to come up with a list of a few things that would be really useful for the FI community, I was really trying to think of what are some concepts and some shifts in mindset. Right. We talk about that all the time. We talk about financial independence, changing our mindset. And I think there are some concepts that I wouldn't say I'm necessarily one of the best in the world, but I like to think that I try to be helpful. Through my experience with doing this for myself and trying to help some friends and family with it, I've come to think about some things a little bit differently than I did when I started out in ways that have helped me to, in some ways demystify in other ways. Just sort of decomplicate some of this and. And not get too distracted by some of the complexity and some of the ways that you might see people post on social media or trying to make things look a certain way or look very super fancy, or there's things that might be great for some people who want to follow what the influencers are saying, but in the FI community, we tend to do things a little bit differently. Right. So had a few ideas of things that people could think about. So talk a little bit about that. Cents per point. For those who are new to this concept, cents per point, or sometimes it's abbreviated, cpp, is really just a way of measuring how much value did you get for redeeming your points and miles for travel. If you ask anybody how they calculated that and you really got granular with it, they actually won't always have the same answer. And I think their answer might not even be the most relevant way to look at it. And so I think there's a few different ways that are helpful to understand this. First, to set just kind of a baseline. You know, when you think about cents per point. Right. How many cents per point did I get redeeming these points for this flight, for example? They all share something in common, the basic math. So you take the price of the flight. You know, this could apply to hotel bookings, rental cars, anything. But whatever you're using travel rewards to book. You take the price of the flight, you subtract any taxes and fees, anything you're paying in cash, and then you divide that by the number of points redeemed. So if you had a flight that just to make up a round number was $1,005.60, minus $5.60 for taxes and fees, which is a common domestic airline Taxes and fees, price. You have a thousand dollars flight, right? Maybe this is a business class flight. And if you use 50,000 points for that resumption, $1,000 divided by 50,000 points is 0.022 cents. Right? So that's 2 cents per point. Now you might say, okay, isn't that how everyone would calculate cents per point? Yes, but let me ask you, the question is, well, where did you get that $1,005.60 price? That's where the different ways of looking at this and kind of a few variations of this come in. So, you know, I've kind of come up with some cutesy names for what I like to call these. In my mind, there are sort of three different major ways of calculating this and common variations. The first one I call the social posts cpp, the Instagram cpp. So this is really asking the question of how much would someone have had to pay full retail for that exact same flight that I just booked with points? So you're on the airline's website, you're on Google flights, you're looking at how much is the cash price of this exact flight, Switching back and forth between miles and money, maybe on the website, and I see what the dollar cost of what that flight is. And this is where all those really exciting high values that you see on TikTok and Instagram come from. You know, 8 cents, 10 cents per point, and you know, it's what you want to post to your feed for your followers to see. And of course, like share and subscribe. Right. I would also guess, you know, this is the most common way that people calculate it. It's definitely the simplest. I looked up the cash price, I looked up the points and I divided. But is this really the most useful or helpful one? And is it actionable? And unless you're a travel influencer using this to create content, I would say it's probably not actionable and you probably have better options. That's kind of version one, variation two, I call either the opportunity cost or the best equivalent cents per point. So this asks a different question, right? Instead of how much was the exact same flight, this asks what is the best price that you could have gotten to book something that you consider equivalent to this trip if you were paying in cash, as an example, maybe it's a different flight on the same day and you're flexible with your timing. Maybe it's the day before or after. Maybe it's on a different airline, you know, something that you consider close enough and basically the same experience. So you Know, real example for me, a couple summers ago, I booked four tickets for myself and my family to fly American Airlines flagship first class from JFK to Rome. As there was a great opening on a particular date for only 72,000 miles per ticket in first class. That was an awesome redemption. And when I booked them, the retail price of those tickets was $12,897 each. So.

A (9:02)

Each.

B (9:03)

Each one. Yeah. One per person. So, you know, of course, out of that 12,897, you gotta subtract that $5.60 in taxes and fees. But the cents per point came out to 17.9 cents per point. So score. Right. I just saved so much money. This is an amazing value. But of course, that's that social post cpp, even though, you know, it's true, there was not another date immediately nearby that had that 72,000 point award available. That same flight a day before, a couple days later. And we did have the flexibility for that particular trip of which day we left, that same flight was about a third of the cost in cash. It's about $4,392 for just taking the flight. Same exact flight, a different day. To us, that was totally equivalent. We could have gone another day. So. So the best equivalent was really only 6.1 cents per point. There was no way we would have ever paid that $12,897 when we could have taken the same flight another day. That worked for us for a third of that price. So still not too shabby at 6.1 cents. But, you know, I would argue it's a much more real or at least more useful way to calculate the amount of value I got from those points. You know, so when it comes to. For the FI community, that may be helpful to some people, right? It is more real. Right. We want to look at the truth of the things. We don't want to look at the way it's just sort of packaged up, you know, for the bulk of the FI community, it's probably going to be a bigger focus on being more intentional with our spending. And there's a third approach that probably makes even more sense, getting those two out of the way. Right. The social post and the best equivalent, the third approach is what I call the minimum viable or mvp minimum viable price. Okay. Or the money saving cents per point. And this asks a different question. This says, what is the cheapest price of any flight that I would have been willing to take to make this trip happen? If you're fine with economy, if you want a different Week, a different month. If you were fine with connecting instead of direct. When you think about it, minimum viable is totally subjective. It's really up to each individual person. I know people in this travel rewards hobby who, once they fly international, first or business class, would never dream of going back to flying economy on a long trip. Others would be much happier saving money on an economy flight or having more travel for the same price. That minimum viable criteria might also depend on the trip. I'm totally happy flying on a two hour domestic flight in a basic economy seat and I may not be happy flying 12 hours overseas in that same seat. Again, this is totally up to your own level of what's acceptable to you and you have that support. Great. For the five communities, it's all personal, right? It's what works for you. You could figure this out in a way that's really not too complicated. It's pretend points don't exist. We probably remember a world where we used to look for flights by just searching for available flights, seeing what the prices were in cash, and booking the cheapest flight that got us to where we wanted to go in the way that we wanted to get there. So if you simply do that, you look at your flight options and you say, you know, what would I be doing if I booked this in cash? If I looked at that example of our American first class flight, I would have been okay with a different business class flight from a different airport on a different airline. In this case it was a red eye with a four year old and we decided lie flat seats were important to us for this trip. We actually had already booked an Air France business class flight from a different airport on a different date which we ended up canceling when our trip plans changed. That had a cash price of $2,599 per ticket. Again, I recorded all this stuff when I was booking things. So this is a real example. So let's just say that flight was also available for my new date range. I didn't check that. That would have made my minimum viable cents per point 36. I would generally take 3.6 cents per point anytime. But again, it's definitely a different way to look at it. To sort of sum up this example right, my social post CPP that would have impressed my friends was 17.9 cents for the exact same ticket. But it becomes 6.1 when I consider what I really would have paid for equivalent enough flight. Or 3.6 when I consider what I would have paid for something that's totally good enough if I was Just shopping with cash, you know, what's the actionable takeaway here? Don't just look at how much the flight you're booking with points costs and use that social post CPP to make any decisions about whether to use points or cash for booking. That's just for impressing your friends. But you know, I would say about your goals, you know, think about your goals and what type of outcome you personally value the most. So again, this differs for different people, but there's different ways to look at it. If better travel, you know, upgraded cabins, basically a more premium experience and getting that biggest discount on that premium experience is your goal, then that best equivalent cents per point might be the right way to look at it. If saving money or being able to travel more on the same budget is your goal, then I would use that minimum viable sense per point. Again, this is not just sort of theoretical because sometimes if you simply just look at that social post cents per point and it seems high and implies you should definitely use points for this. But when you look at the cents per point you get by comparing to a real alternative, it might end up being below the level of a good deal to you. And you know, everyone has different thresholds for what that cents per point they're willing to redeem points for is. But you might just be better off using cash for that trip. So that's where cents per point really becomes useful is trying to decide, you know, am I going to book this with points or cash?

A (14:13)

Yeah, I love that. At the end of the day, that is the whole point of the last 10 minutes, right? It's about making decisions because really you have a store of points and now for you it happens to be millions of points. For me and most regular people it's a couple hundred thousand points if we're lucky, right? And that is a finite resource in us. So we have to make decisions. And I think it's so multi layered and this is what's fun about it. I think a lot of people can get bogged down in the minutia. That's why I love the, the minimum viable because I think for me I think of minimum viable as the, the opportunity cost. That is literally what I would have spent in cash. Now that doesn't mean it, it's purely, like you just said there at the end, it doesn't mean that it's purely economic because sometimes if you can get, let's say a business or a first class flight and, and it's only points that you're giving up, quote unquote only because of course you and I know there's a cash value to these points and we're going to talk about that, of course, but that's worth it to upgrade to the business or first on a flight that you would have taken economy and been a sardine in a flight for 14 hours. Okay, that's an instance where points add a value that most of us, especially most of us in the fight community are not going to spend 2 to $5,000 on a flight when we can get the equivalent economy flight for a thousand dollars. It's just I don't want to paint a broad brush, but I think that's probably directionally accurate. Again, there's just so many layers to this I want to get across to people that there is a cost to the points. I think people get bogged down in, oh, this is all free travel, quote unquote, free travel. Sometimes that means they're basically fabricating trips that they otherwise wouldn't have taken or maybe didn't want to take. And that might be a bit of a. Or just wasting points on business or first, when at the end of the day you said what are your goals? That's another thing we need to discuss. The cash price and what are your goals? I think are two essential ones. Because if your goals are just, hey, I'm a middle class family, I'd love to take 1 to 2 close to free trips with my family this year using rewards points, I think you and I both know that's very doable. But then again, if they just all of a sudden see, hey, I've got a first class option and it's only 200,000 points one way and they blow their entire store of points. Well, that probably wasn't the greatest decision. If your goal is, hey, I want to get one to two free trips for my family. So again, there's a lot here I'd love for you to talk about that the cash. What can people use these points for otherwise? Like how do you think about minimum cost per point that you would take on a redemption? Do you even think in terms of that? And maybe if not you, who has a lot of points then the family and friends that you speak with normally, like, how do you counsel them to think through that?

B (17:12)

Yeah, totally agree. This is something where people can think of it as well, I have all these points so I might as well use them and, you know, not think about them as having any value because they've already been earned. They're already sitting there. I was just on vacation with My family and I was helping my dad get a flight and he said, well, shouldn't I just use my chase points? Because they're just sitting there and I should probably just use those. I basically explained to him, you know, with this particular flight, we were looking at that he could have done better by simply cashing out those chase points for $0.01 each, which would have taken him one click and then buying the flight then, rather than just using the points to get that flight. So again, this stuff can get overwhelming when you look at all the complexity. But this is another concept I think is very helpful. Right. What we were just talking about with cents per point, that is a way of looking at what value did I get for my points. On the other hand, you could look at, well, what did I pay for those points? And Brad, you just said, well, I might just have a points balance. I might not think of it as I'm paying for these points. In reality, you most certainly did. This is one of the ways that I think about it. Let's say you earn 100,000 points spending on your credit card over a certain period of time. You actually paid basically 2% for those points because you could have easily earned 2% cash back if you had been using a cash back card. So you can calculate maybe a more realistic way of looking at this is what percentage of the cost of my travel did I actually pay? What percentage off did I get? As an example, if I earn two built points per dollar, the built card has come out with some new cars recently. I happen to have that built palladium card. Not an ad for them, but I like the card, but it gets 2 points per dollar and everything. And they often have transfer bonuses that might be 100% transfer bonus in this situation where maybe I got those built points at 2 points per dollar and I got 100% transfer bonus, those points actually cost me half a cent each because I earned four points. But I gave up earning 2% back on another card. Whereas if I earn one American Airlines points per dollar on a city American Airlines card, those points actually cost me 2 cents each. I could have earned 2%, but I was using a card that earned 1 point. So I was basically paying 2 cents. Where that gets to your question of, like, how do I think about, you know, what is that sort of minimum I should be redeeming for? Right? What, what is that sort of threshold? On the one hand, I tend to look at it as if I'm not getting at least $0.01 per point when I'm redeeming. Points. There's a pretty good chance that I'm not getting value out of these. And in a lot of cases you can literally just redeem them directly for that. City points, Chase points. In a lot of cases, you can actually just cash them out at $0.01 per point. There are other ways to redeem points. You can redeem them on Amazon for maybe.06 cents. Again, this really depends, you know, again, everyone should sort of look up the particular points that you have and what ways to redeem them. But if you're not getting at least $0.01 per point, then you probably could have simply earned cash for those or you probably could cash them out with, you know, one of the mechanisms that it doesn't have to jump through a lot of hoops that those points programs offer. You know, with airline points, it might be a little bit different. If you sort of figure out how much you're paying, in other words, giving up for the points, then you can actually multiply that by how many points you redeem and compare that to the cash prices. People might be surprised to see they're actually at times paying more than a hundred percent of the price for that flight by using points versus using cash back.

A (20:31)

That, to me is going to be one of the essential takeaways of this episode is what are you paying? And it's a reorienting question, what are you paying? Because I don't think we think about that, that you could get 2% cash back. You basically alluded to the fact that that's probably fairly easy to do. Maybe we can give, you know, again, we're not giving recommendations for specific cards, but I know back in the day, and this might still be the case, there was a Fidelity rewards card that gave 2%. I don't know if that's still the case, But I think 2% is fairly easy to come by in terms of cash back. Is that roughly accurate now?

B (21:05)

Absolutely. I think that Fidelity card still out there, even the Citi Double Cash card, which markets itself with the name as a, as a cashback card, but also really earns Citi thank you points. But with that card you can cash Those out at $0.01 and you earn two points per dollar and everything. So that Citi Double Cash card is also a 2% cash back card. If you want it to be. There's a few of those out there. And if you think about it as okay, if I'm in the FI community. Right. You know, again, everyone's going to have different levels of interest in how much they want to Spend time on how much they enjoy sort of juggling different cards for different categories or if they want something really simple, maybe they just want one card, right? The Capital One Venture card or Venture X or a Citi Double Cash card or that built card or you know, an amex blue business plus if they have a business card which earns 2 points per dollar on up to $50,000 a year spending, you know, it's probably a common setup for the FI community. It's, it's a great set it and forget it approach. I know I'm earning 2x or 2% on everything. You know, I'm not spending as much time doing what I have fun doing of trying to tweak and optimize every little thing. I just want to know that I'm getting kind of a good autopilot approach. That could be something that someone does, right? They get one of those cars and then they notice, okay, I've got a hundred thousand points in my account and I find a great award booking. It's a first class flight to my dream destination on a premier airline and it would have cost $5,000 even if I'd found the cheapest available premium experience. So you might think, okay, I just got a free flight, you know, I wasn't going to use the points for anything else and I didn't spend anything extra to earn them. Right. I got over 5 cents per point. Woohoo. What I would say is they actually spent a thousand dollars on that flight. They could have earned instead of 2x. Or if they had that city double cash, they could have simply cashed them out. That a hundred thousand points could have been a thousand dollars in cash. So they didn't get a free flight, they spent a thousand dollars on a $5,000 flight. That's still a pretty good discount, 80% off. But maybe that was actually the social post sense per point. Maybe that was the price of the flight itself. And maybe there was a totally acceptable economy flight that they could have taken to their destination for $900. Are they going to use a hundred thousand points to fly in first class? Are they going to use $900 to fly economy? When you think about it that way, you're actually paying $1,000 for a trip I could have gotten for $900. Again, that maybe that economy flight and points is only 50,000. Maybe you're getting a real one. Eight cents per point on that, you know, $900 flight, you're paying 50,000 points. Just knowing that points actually cost you something helps me to at least look at these options in a more practical way because they're not just free, they're not just sitting there with totally worthless value unless I use them for the most expensive thing I can use them for. It really does help avoid another trap, which is earning 1x on airline or hotel points just because it's your favorite airline or hotel. If I always use my American Airlines card, I always use my Hyatt card, I always use my Hilton card, well, I might be getting 1x and I could have gotten 2% cash back. So I'm really paying 2 cents per point for all of those miles. Do I want to pay 2 cents per point for an airline mile? Generally, I wouldn't want to pay that. That's another way to kind of get out of that, you know. Well, points don't have value, but in reality you just have to look at it a little bit differently.

A (24:14)

Yeah, and this is why we spent the first 10 or 15 minutes of the episode talking about the three different cents per point because that might have seemed a little, a little dense for people, but that is the bedrock for the entire way to think through redeeming these. It's interesting, right, because there's the what are you paying? Which is, okay, what could I have gotten? If we're saying Most likely it's 2% cash back. Now we're not talking about sign up bonuses because that actually changes the game entirely. We're just talking on your actual spend here. Okay, I could have gotten 2% cash back and then not for nothing, but that 2% you could have invested in the market. It's not just sitting there. I think there's another way to think about this though, and you alluded to this, which is when people are actually going to redeem the points. Okay, you've already made the decision, you have the points. So now let's say in this case we're talking about Chase Ultimate Rewards points. You have the points. I think a lot of people don't really look at their options like, like you said, even worst case. And I say that kind of dripping with sarcasm because it's still pretty great. It's like you trade it in for $0.01 per point. Now for all the travel rewards people out there, they're recoiling in harb and I'm not advocating to do that, but what I'm saying is sometimes you go and you say, oh, I can transfer these points to Hyatt, or maybe even worse, I could transfer them to United and okay, here's my flight. It's 50,000 points and they just book it and they don't say like, oh, what actually was the cash price? Not even like the equivalent or the minimum viable or any of that other stuff. Just literally what was the cash price? Because I could have booked this through the Chase portal or it could have just booked it on united.com and cashed out those points. And maybe I come to the good on that. So I think it's more of like an entire skill set, Noah, how people need to think through this. Can you add any additional flavor to that particular. We're just using Chase as an example. There are plenty of transferable points, but just a little flavor to that.

B (26:11)

Yeah, absolutely. As you mentioned, some of this can get a bit dense, but my goal is to help us avoid some of the analysis paralysis that I can certainly get into. Right. So generally I look at it as I don't really want to redeem for less than $0.01 because I'm pretty sure I'm losing value. On the other hand, I don't want to sit there and wait for that 3, 4, 5 cent redemption. I don't want to be stuck holding onto these points, right. You know, you know how much points are worth if you never use them? $0. I also don't want to be just sort of racking up points with no, no purpose and then looking at travel and paying cash for that travel because I'm not getting a as high of a cents per point as I, as I'm hoping to get. If I look at it as, okay, I'm in some sort of a range, right. If I'm getting generally more than 2 cents per point, in sort of my experience with booking travel, it's pretty much a good idea to book it, right. And to not use cash. If I'm getting less than $0.01 per point, then it's generally not a good idea unless I have so many points that I'm just really never going to use them. But again, there's usually ways that I can get at least one cent by just sort of redeeming those for cash. If I'm somewhere in between, you know, 1.5 cents maybe per point, then it sort of comes down to where are my point balances? What do I intend to use these for? Points are worth $0 if you never use them. If you don't have enough points for important redemption that you're planning for your family for some amazing trip, it's coming up in the next six months, then you know, I probably don't want to redeem those Points for one and a half cents. If I'm not going to have enough points for what I'm trying to do, there's a concept that I call the points balance. Thermocline, if you like that name. Right, So I don't. If you remember back in middle school science class, what is a thermocline? Right? It's the thermocline in the ocean is the point in the water where there's this transition between warmer water above and cooler water below. And it's a sudden temperature drop. And when it comes to the value of your points, the actual value per point has a thermocline too. You know, your points are not all worth $0.01. Your points are not all worth $0.02. The amount that they're worth depends on how many points you have and what you might be doing with them. These are specific to each type of currency, but basically they depend on three things. One, how many points could you reasonably use on one trip? One great redemption for whatever the size of your travel party is. Second thing is, how many points do you already have in that currency? And the third is, well, how many of these trips per year or how you know, approximately how long would it take you to accumulate that many points? What is your sort of points per year spending level? And if you think about those things, you can give a real example, right? Say a family of four who at most plans one awesome trip per year with an international flight and some nice hotels are all inclusives, right? A kind of good sort of general example. We'll talk about flights just to keep this simpler, but let's pretend that all they have is American Express membership rewards. And let's say they have some limitations on travel dates around school. They need four award tickets for each flight, so that can be a little bit tricky. They need to book well ahead of their trip. They want the experience of business class. But you know, they're willing to follow the best deals to kind of let their destination reveal itself. So they've got a few flexible factors going for them. So they figure, all right, the most they would need to spend would be around 100,000 points per person per ticket, right? So 100 times four people each way times two, so you've got 800,000 points. So that would be like the biggest, best trip that they could think of, right? Round trip international flights for 100,000 points per person each way. You know, they hope to get some better deals, maybe 45, 60,000 points, but you know, they'd go up to 100,000 for a great trip if that's really what they need. Right. These points are not going to have any value when they're right.

A (29:40)

So worst case scenario, it's 800,000 in this case.

B (29:43)

Yep. So now we know that answer to question number one for them. Right. 800,000 points is the number they could reasonably use on one great redemption for their family. And that's again, flying international round your business on the most expensive flights they might want to take. So let's say they've also been looking at cash prices and they kind of know what their minimum viable cents per point would be for those trips. And maybe it's around $0.03 per point. Let's talk about how many points they have. So let's say they have 800,000American Express membership Rewards or less. Well, how much are their points worth? Well, they're going to need all those points, maybe more for their trip this year that they're trying to book. So their points are worth about 3 cents per point. Right. That's that sort of minimum viable number that they just come up with for this trip that they want to do. So they've 800,000 points, 3 cents per point. They have $24,000 worth of points. Wow. Right, simple enough so far. Yep. What if they have 8 million American Express Membership Rewards? Are they worth $0.03 per point? Do they have $240,000 worth of travel in their Amex account? That's what most apps that keep track of your points balances, like a Word Wallet, which is a great app I use and love. They would tell you whatever your cents per point are, that's how much all your points are worth. But then that brings us to that third question, right? How many redemptions per year? How long would it take them to earn these back? Let's say they do one redemption per year. Let's say they have very little spend. Maybe they've just found choose a five. They've binged the first hundred episodes, they've cut their budget without depriving themselves. But say last month they started their own home farm and started raising chickens and they grow all their own produce. And you get the picture there. Their annual spend credit cards has gone way down, Right. Maybe they don't want to sign up for a lot more cards. They hardly expect that they can earn more than maybe 50,000 points per year even with their 2x cards. So it would take them 16 years to earn enough points for one trip. Maybe they'll actually use all 8 million of those points on their family trips for the next 10 years. Well, congrats. You do have 240,000 worth of travel saved in the bank. On the other hand, what if they run their own business and they have a lot of monthly expenses on their credit cards and they like to get a signup bonus here and there. They buy everything using their Rakuten account for shopping rewards and they get Amex membership rewards that way too. And let's say they earn a million Amex membership rewards per year. Well, if they only use 800,000 of them a year, then their balance will just keep growing and they'll never need those points. So how much are those points worth? I would say that they're worth only what you could otherwise do with them, maybe cashing them out. So if they have the right American Express cards and an American Express checking account, they can cash them out somewhere between.08 and 1.1 cents. What a lot of people might have a hard time with is that that incremental value of getting more points is really only 0.8 to 1.1 cents per point. So that's that thermocline, right? When if they get above that 800,000 level, the other points below that might be worth 3 cents per point on that, that ideal vacation and their points above that might only be worth approximately $0.01 per point. What do I do with all that? Right? Cool concepts. Yeah. Back to middle school science. Well, the simplest thing that someone could do with that is to come up with a ballpark of how many points they would need for one trip for one year worth of trips maybe. And just do this for each type of points you care about. If there's a big difference, you know, you might need a different number of Hilton points or a different number of Hyatt points. Then when you're deciding what cards to use or if you are going to sign up for a card, what kind of points you want to accumulate, you can think about are you above or below that thermocline. So if you have enough points for the trips that you want, then earning more points in that program might not be as valuable to you as starting to earn points in the Chase Ultimate Rewards program. Maybe getting a Chase card because Chase will transfer to are ways you can use those points that you can't with Amex. If you want to book Hyatt, for example, you're not going to be able to do that with Amex points. Maybe Amex has your flights covered and you're ready to start looking at hotels. Whether it's with where to put your everyday spend or what card to get for a signup bonus. Looking at basically the value of your points. Really only having that high value up until how many are you really going to use within a year is a good way to sort of break down that challenge of saying, okay, I just don't know where I should be getting points or do I have enough? How do I have enough? You know, how many do I have to keep on hand?

A (33:49)

I like that. The thermocline. That's a good idea, because this is important. In essence. We don't want to hoard points and there is a different value to points that are just sitting there. And in this case, we're all savers, right, Noah? So, I mean, in our real lives, with our money, we want to live below our means. We want to continually save and put money into index funds or real estate or whatever it is. But in this case, you're saying, all right, look, if you know for certain, and again, this is for you to take a step back, you, the listener, to take a step back and say, what can I realistically earn? What am I going to earn in a normal year? Am I going to open up a credit card or two and get a signup bonus or two? Am I going to have regular spending? If you're earning X number of hundreds of thousands of points a year and you know for certain, within reason, nobody knows for certain, but within reason, that you're only going to spend X minus 100,000 points, well, then you're going to continually have a balance that is going to, in perpetuity, continue increasing. And Noah's saying, all right, that's probably not the most optimal because that balance, like the points that are sitting there, unless you redeem them again for cash or gift cards or something else, if they're just sitting there, they're not worth anything. And not to mention also know you now you know that points devalue as well in terms of redemptions and such. So sitting on hundreds of thousands or millions of points forever is probably a suboptimal strategy, to put it mildly.

B (35:12)

Yeah, you mentioned somebody might balk at the idea of redeeming points for one century. But if you have more points than you could possibly know what to do with with your situation, redeeming points for 1 cent or booking that flight that gets you a 1.3 cent redemption might not be such a bad idea. I've used points and redeemed them for one cent before when I had too many points and I didn't have a plan to use them on the Other hand, I've held onto points when I know that I've got something coming up that's going to be more valuable. So again, the goal is to keep people from getting stuck, keep people from having their points sit around unused and just look at, you know, where am I at with that points balance? Do I have enough for what I need or do I not? And if I have enough for what I need, maybe accumulating more of those same points is not the best way. Maybe getting cash back or maybe looking at a different type of points and starting to get get some of those will be helpful.

A (36:01)

Let's get granular. A lot of people want to know, okay, how do I think through this? But then what do I actually do? The types of point currencies you should earn. I think this is a really good starting spot for most people with travel rewards. You gave the example before about, hey, American Airlines is my favorite airline, so all I do is earn American points. Neither of us would say that's the ideal scenario by any means. Can you give people a sense? Because frankly, there might be somebody out there who's saying, hey guys, the only flights from my airport are actually American. Is that the right strategy? How would somebody like that thing through? But then more broadly, how should the rest of us think through the various point currencies and where we should really focus our energy?

B (36:43)

Yeah, that's definitely a question that I think a lot of people struggle with. I had a friend tell me a while back, they live in the Atlanta area and they said, yeah, well, we just put everything on our Delta AMEX card because we fly Delta all the time. You know, another friend who told me, you know, you'd be so proud of me, I got the American Express Platinum card and I put all of my spend on it. I just saved a lot of money on my Amazon order. So I cringed a little bit at that story. But there's, I think, this misconception that the travel that I tend to do, those are the points that I need to earn. And you know, there's also a difference between maybe it benefits me to have the Delta credit card or have the American Airlines credit card because of the perks I get with free checked bags or priority boarding. That's the airline that I fly the most. That doesn't necessarily mean that that's where I should be earning all the points. What most people would usually look at is kind of bucketing these things into the categories of transferable points and non transferable points. So American Airlines points, not transferable, right? Marriott points. Theoretically, you can actually transfer Marriott to different ways, but most people would use them within Marriott, right? So hotel points, airline points, your national car rental free nights, you know, those are sort of contained within that program. And then you have the transferable points like American Express Membership Rewards, Chase Ultimate Rewards, City thank you points, Capital One miles built as a currency. There's currencies like Rove, which is a shopping extension, but it works as a transferable currency as well that you can transfer to different airline hotel partners. So for most people, it generally is a good idea to start with a transferable program. So why would you do that? You know, is it going to take me extra work? Is it? I may have to jump through some hoops, possibly. But for most programs, if you mostly fly American Airlines, well, the Citi thank you points can be transferred with some of the right credit cards to American Airlines. So you're probably better off earning two Citi thank you points per dollar on a no annual fee Citi Double cash card. If you're able to pair that with a Citi Strata Premier card that allows you to transfer one to one to American Airlines and you are earning one American Airlines mile on all of your spend with the American Airlines card. In my case, I do fly American Airlines a lot of. I like to have a stash of American Airlines miles that I can make bookings with. But for other situations and if it's not something that, you know, I'm just getting started and I'm not sure what to do, that sort of optionality we always talk about, you know, having points in a flexible transferable currency like a Chase or an Amex allows me to accumulate points and be able to use them for a lot of different things. There are over a dozen airlines that you can transfer Chase points or American Express points to. And so if you're thinking of, I'm not sure exactly what I want to use these for, but I want to be able to start, you know, having these for possible trips in the future. American Express or Chase are a great place to start. Citi is a great place to start. Capital One's a great place to start. There's a little bit more work involved in figuring out, okay, how do I transfer these to where I want to transfer them to. But again, you can work backwards if you mostly fly Delta, and if you really want to accumulate Delta points, well, you might be better off accumulating American Express membership awards that you can transfer to Delta. And that might not even be the best use of American Express points, but at Least it's better to have a hundred thousand American Express membership awards that can be transferred to Delta than it is to have a hundred thousand Delta miles that might not be what you want to use. When you find that ideal trip that's going to be perfect for your vacation and it's an Air France business class flight, well, maybe you can book that through Delta if they have award availability. But if this, if it's Air France miles that you need to book that trip, you could have transferred those from American Express or you could transfer them to Delta. So and it's that, that flexibility. And for somebody who's just getting started and exploring how do I use travel rewards, being in a situation where you have these options is probably the most valuable, but I think also the most interesting because it allows you to learn and experiment with this. We love experimenting. Alan and Katie worked with them for events and they talk about these mini experiments. To me, that's another great way to look at this is I don't have to solve this whole thing. I don't have to get too complex with it. If I'm just getting started, I can pick really any one of those. I would say American Express, Chase, Citi or Capital One all have a lot of uses for their points, can be pretty flexible, pretty easy to work with and just to get started, right. It's, it's about coming up with something, trying something small and maybe just starting with one. Don't try to start with all of them because if you have 10,000 points in each currency, you're really not going to be able to do much with it. It's a good idea to start with one till you get enough points that you could actually book something and make some use for them before you expand to having two or more.

A (41:12)

Yeah, I think it's always better to have options, both in life, of course, money and travel rewards. If you have the ability to have more options rather than fewer options, you would always take to have more. So I think your examples were perfect there, right? It's like, hey, I can open up a Delta card, which is very specifically just for Delta and I guess you could book on their partners, but you're booking it through Delta's website. Or I can have amex membership rewards which transfer to Delta among many other airlines. All things equal, you'd rather have the membership rewards points in that scenario. A couple of addendums to this. You said when you have enough points in a currency. Now I know that's very subjective, of course, and we can go back to the prior part of the conversation of what's your goal and how many can you reasonably expect to spend? Of course. So I suspect that might be part of your answer. But your family member comes to you and says, I'm thinking about getting started with this and you advise them, let's say pick one of those four. Chase Ultimate Rewards, Amex, Membership Rewards, Citi, thank you, Capital One. At what point do they move on to the next? Or does it vary depending on which they picked?

B (42:22)

It does vary a little bit, but it also really varies on what their goals are and how they're trying to use these points. Right. And that's where it becomes a little bit personal. But I would generally say think about your goals, right. Are you trying to just save money on the travel you already do? Are you trying to travel more? Are you trying to have more premium experiences when you travel? Are you not even trying to travel much? But you just heard about all this and you're really just trying to save some money, you know, if you get an understanding of what, what is my, and this doesn't have to be my forever situation. Right. I got started using travel rewards. We just wanted to save money on, on our annual travel budget. You know, I was not expecting to have these first class flights, but these things evolve as we go. So don't, don't think you have to solve your, your entire future as you're getting started. Think about what kind of travel do I want to do, right? And if you are just trying to save money flying around occasionally in the US to visit family, then, you know, think about what is the typical price of an economy award flight on the airline that you know, maybe is your home airport, maybe it's 20, 30, 40,000 points at most. Maybe you can do better than that to just save money on the travel that you need. Or if you're, I have a couple friends that I've given some help to that we've sort of planned some trips together and we look at, okay, they have a family of four, they're trying to go to Europe, a friend who's trying to do that, we actually helped them book some flights to go see the eclipse this summer. We looked at four people. Here's the approximate price of a business class flight that they were trying to take. You know, multiply that by how many travelers. And if you think about, you know, enough doesn't have to mean enough forever, right? Enough could just mean enough to be able to redeem one trip. If you have less than you need to redeem one trip Then you're not going to be able to do much with those points. And it's probably a good idea to keep accumulating them in that one currency until you have enough for that one trip. And I'd say for someone just getting started, you don't have to do all the complexity of how many trips a year do I want to take and how long are these points going to last? You could just say, yeah, what is one trip I'm just going to go on? There's some great tools. Back in the day, none of these tools existed, Right. You had to know how to look up on every airline's website or call them to find out. You know, now there's tools like points. Yeah. And award tool that have all these great free tools that you can simply explore and get a sense of. All right, if I want to go from approximately where I am to approximately where I want to go and approximately these dates, I'm just going to browse around and get a sense of how many points do these flights seem to be, and then I'll multiply that by how many people I want to travel with and I'll just say, for one trip, that's how many points that I think I'm going to need. And then I would say accumulating points in that particular currency until you have about that many points is a good way to start. In my experience. So much of this stuff just comes from these mini experiments, but it comes from trying it out. The best way is really just to pick something maybe smaller or shorter term, and just try it. Once you've booked your first award flight or you've had your first trip, there's a lot more, you know, you can look at as, all right, what do I want to do differently the next time?

A (45:20)

Okay, I like that. I want to get into, like, a very specific example because I think this actually speaks to some people's trepidation, but also the value of alliance partners. This is going to be an interesting example of both of those. Capital One, we said, is one of these four currencies. Obviously there are more. They're built, you mentioned, et cetera. But the four main bank currencies. I'm on Capital One's website right now, and these are their transfer partners for airlines. And now this is an interesting list. Aeromexico, Air Canada, Avianca, British Airways, Cathay Pacific, Etihad, Finnair, Air France, KLM Flying Blue, Qantas, Qatar, Singapore, Tap, I think Portugal, Turkish and Virgin Red. You go down that, Noah, and a lot of people are like, what in the heck am I looking at? What do I do with these things? This is an opportunity for you to explain alliances and the intersection of these transfer partners, but also maybe to allay some people's fears about when they look at a list like that and they're like, what are these guys talking about? I know United, I know Delta, I know American, maybe Southwest and JetBlue. And I have some Frontier flights out of my. Out of my airport. What am I going to do with Avianca Life Miles? Like, what am I going to do with British Airways Miles? I don't understand what they're going on about. I think that's a question that a lot of people have.

B (46:45)

Absolutely. And I remember that exact same experience of trying to get started with this. I had some chase points I'd started with. I had some capital one miles, and I looked at these lists of airline partners and I thought, when am I ever going to be flying to Singapore? When am I ever going to be flying to Portugal? Is that the trip that I'm going to take? That does not necessarily mean that that's where I'm flying. Right. So these airlines generally are in one of three alliances. There are some exceptions that partner with different airlines, like Alaska Airlines, as partnerships with many different airlines that are not part of their alliance. But in general, there's three major alliances. Star Alliance, SkyTeam, and We're One World. They all have major US carriers involved. One world is American Airlines, Alaska Star alliance, you've got United Sky Team, you have Delta, you know, and then they have a collection of these international transfer partners and international partners. Really, when you look to that Capital One list, you notice Capital One actually doesn't transfer to any of those commonly known US Airlines, doesn't transfer United, American to Delta to Southwest to JetBlue, but transfers to all of these partners. The best way to sort of experience what this is like is to go on one of these free search tools and say, hey, I just want to go from here to there. And it'll show you what kinds of currencies are available to book. So you might be looking at trying to fly from Atlanta to. I'm giving Atlanta because as a Delta example, I'm trying to fly from Atlanta to, you know, xyz and I search in one of these tools and I see, oh, it looks like I can actually booked this flight with Air France KLM flying blue miles. Huh? I didn't know that. Oh, okay. Well, that's because they're in Sky Team and they're a partner of Delta. Oh, and I can transfer my capital one miles to them. The best way that I've found to experience that is whether it's a real trip or not. Just pretend you're planning a trip, go in and search one of these tools and you start to get a feel for which types of currencies are actually showing up. Right? So you might be flying Delta, but booking it through Air France KM flying Delta. Or you might be flying Delta and booking it through Virgin Atlantic. Virgin Red miles. And so again, there's often multiple ways to book. The sort of secret sauce here is you don't have to learn all this up front. As you go in and you look at it, you can simply search for, hey, which airlines are in this alliance? Or who partners with this airline? Oftentimes you can just search for one of these point search tools and say, what am I seeing? Right? That was how I know that I don't often have a use for points. Qantas miles. It wasn't that I had to know everything about them. It was that I didn't really see that as an available option very often when I went to search for flights. So I think that's a great way to break down some of that trepidation and not being able to dive in is to say, you know, you kind of learn it as you go and you know, it doesn't have to be something that stops you from moving forward. Right.

A (49:26)

As an add on to that about alliance partners, what flights are available? If you go on Delta and you see a whole bunch of Delta flights and they're wildly varying prices in terms of points, sometimes you see some of their award partners show up and sometimes you don't. And then I guess looked at another way, sometimes you go on an alliance partner site and you might see some Delta flights, you might not. Is there any rhyme or reason to how those are available, when they're available? And really like kind of a second question, but it does tie in is like, is there a back of the envelope for like, how much flights should cost? I know back in the day there used to be award charts for every airline. I think they've kind of been phased out a little bit, at least in terms of public. For the person who's listening to this, who's never done it before, like, I'm going to Europe and I want to fly business class. Is that supposed to cost me 200,000 points one way? Is that supposed to cost me 50 or 100? I no idea. So I know it sounds like two questions, but I think they are tied together.

B (50:28)

Yeah, absolutely. I mean, Delta would probably want you to think that's supposed to cost 300,000 points one way.

A (50:34)

I set you up at the Delta, of course.

B (50:35)

Yes. There are some general sort of ranges that people will talk about and that I tend to see is, you know, an economy class flight to Europe and the US should probably be a good deal in the range of 30, 40,000 points, maybe 50,000. A good business class deal could be anywhere from 50 to 80,000, 100,000 points maybe for some first class flights. But you can't just look at the points because you have to look at the taxes and fees. So if you start to search for flights to London, you know, or flights from London to the us, you know, London to jfk, and you see, oh my, there's an amazing deal where it's only, you know, 40,000 points, business class one way, but that might have $900 in taxes and fees. So if you want to just roughly approximate. In my head, point values might differ, but I just sort of approximate about $0.01 per point when I'm just doing some quick mental calculations. So if I see this is 40,000 points and it's $600 in taxes and fees, that's about $1,000, right? If it's 80,000 points and only $5.60 in taxes and fees, booking through American, booking through United, a lot of times they don't have these, these extra taxes and fees, you know, that's maybe worth $800. So that caveat of making sure you don't ignore the taxes and fees, generally economy flights, US to Europe might be in that 30, 40,000 range. Business class might be 60, 70, 80,000. Those are sort of good deals. You can generally find 100, 120,000 for those kind of business class flights, depending on the program. But you know, it also really depends on your travel situation. If you're a single solo traveler looking to get a great deal, you will often find one seat available in business class for a good price. If you're a family of four or five or more, you may end up only being able to get a much more limited set of options. And those might be with airlines like Air France. KLM Flying Blue is a great program that often has five, six, seven, eight seats available, but they might be at that 120,000 point level. So you also have to realize that you can't just sort of sit around waiting for the perfect deal to come around or you might end up not being able to find Anything. If you have those limitations, there's some pretty general ways of looking at it, right? If you're a solo traveler, there's a lot more options than if you're a larger group. If you have to fly on specific dates, you're going to have a lot fewer options. And if you're very flexible with your dates, if you have to go to a very specific location or from a very specific starting point, or if you're flexible to say, you know what, I'm willing to take a short flight up to New York to fly directly across the Atlantic, or, you know, I'm willing to go to anywhere in a warm climate for this vacation, then you start to get more of these options. So if you sort of think about it that way, the more flexibility that you have, the more you might be able to find yourself in one of these 60, 70, 80,000 point business class flights. But if you are looking for business class flights with less flexibility, you might be in that 120,000 range. And that I'm okay with. But those are some sort of rough ranges of what.

A (53:24)

Yeah, that's great. And I do want to talk about the taxes and fees real quick. But the other question I kind of the cardinal sin of podcasting is asking two questions at the same time. So what flights are generally available from partners on the other partner's site?

B (53:40)

This also has gotten more complicated over time, but in my experience, sort of two ways that this tends to become available, right? One is when the points price for a given flight on the part on the airline itself dips into what's known as like a saver award level. So American Airlines is a great example where their points prices tend to fluctuate on a daily basis based on the demand they're dynamically priced. If those points prices for a flight get below a certain level for that flight, you know, for a short domestic economy flight, maybe that's 10, 12,000 points, they basically become flagged as a saver award. And oftentimes that's when they become available to book with partners. In other cases, it's just the airline decides when they're releasing points to partners and sometimes to which partners. So it might be very difficult to find certain United flights on one of their partners, Air Canada at certain times. And other times there might be tons of availability to book through Air Canada for United flights similar with Virgin and Delta, that's one where I'll often see a very specific date within a few days that I'm looking through that has a Virgin Atlantic Award redemption available. On a domestic Delta flight. And it won't be available any of the other dates. But I might set up an alert, one of these tools like points here, award tool, which I've done recently for this exact situation where I looking over a range of a few dates and I set up an alert and I every couple weeks I get an email that says, you know, there's an 11,000 point Virgin Atlantic award available for one of these flights. It can be tough to predict when someone's going into this. Just trying to think, how do I know if I'm going to be able to find one of these partner awards? Just take a look at what's available now. Again, look through these award search tools and see what you find. And if you're not finding it, but you're finding it maybe on other dates or you're finding it in a situation that doesn't exactly work, setting up one of these alerts can be a good idea so that you can find out when these things happen because they do tend to change a lot. And that does make it a little bit challenging to predict when these partners are going to have access to those flights.

A (55:36)

Yeah. And that aspect of it being dynamic, they're popping in and out. Once it gets below that saver threshold. Okay. Then it'll appear on the partner's website. This is something that if you set up alerts or if you check back, of course that's the much more manual version. But flexibility is always essential when it comes to travel rewards. I think to me that's the number one rule is any layer of flexibility you can add in is going to make your life dramatically better and make this dramatically easier. So I wanted to just quickly talk about taxes and fees you've mentioned a number of times. $5.60. So when a domestic us one way you use points, but then there's always this $5.60. We call it almost free travel because really, who's going to quibble over $11.20 for a round trip? But when you're talking international travel, often you will see and you use London very specifically as an example. I know if you're going to almost any country, they're going to be unavoidable taxes and fees that that country charges. It's not like your points currency or your airline is trying to screw you in some way. These are just unavoidable taxes and fees owed to that government. There is simply nothing you can do about that. But you will also see that they vary widely depending on the country. That's Another thing to consider again, flexibility. If you have a multi city trip, a multi country trip. All right, Are you really going to change your whole trip around over $20? Probably not. But what if it's $200? What if it's $400? What if it's like you said, London is the perfect example because they charge massive, massive taxes and fees. So to the tune of hundreds of dollars. And yeah, if you're in business or first I've seen it really, really significant. But then there are also things like fuel surcharges that you see British Airways, when you use British Airways miles or American miles, sometimes you see these extra fees which are just kind of junk fees. I know back in the day they used to be super prevalent. But yeah, flying into and out of London might not be the greatest idea. Or maybe one way it's less and one way it's more. Again, it's just like we're trying to give you a tool set of how to think through this. It's really important to know, like, okay, look, if I can fly into and out of Dublin or fly into Rome and out of Paris and it's going to save me 600 bucks as opposed to flying into and out of London and I'm a five person and I have flexibility, why wouldn't you do that?

B (58:02)

Some of this is just the unavoidable taxes and fees that that country imposes, but some of it are those extra surcharges. If you want to get a sense of how do I kind of know the difference? Generally, if you search on one of the domestic airline websites like American, United, Delta, et cetera, they don't have these fuel surcharges. So if you want to see, okay, flying from the US to Rome might only cost $5.60 in taxes and fees, but from Rome back to JFK on American Airlines might cost $50 or might be denominated in Euros, but you can get a sense of, okay, that's approximately what the government tax and fees are charging me. And then if you see, well, oh well, Virgin Atlantic seems to be charging me 800. Or on the other hand, Air France KLM, which is really a great program, especially for family travel, they do often have seats available. They tend to have a little bit lower prices, but they have higher taxes and fees than just what the government is charging. So you can think of it as almost like a points plus cash type of model where you're paying really a combination of both. And again, that can still be the best value. But oftentimes when you're searching and you're looking, if you just are looking at the points prices, you have to make sure you take that extra step to notice like what are the taxes and fees on this? And I'm not going to book a 40,000 point flight that has $600 in taxes and fees over a 50,000 point flight with minimal taxes and fees.

A (59:19)

Yep. So all just part of the toolset. How to think through this. That's what this episode's all about. No, I jotted down seven items that I want to do a rapid fire round, which I almost never do. But you said something about the Rakuten portal. Is this like an extra way to get points?

B (59:35)

Yes. So Rakuten is probably one of the most prevalent. Anytime you are shopping online, you can usually earn some extra cash back or some extra points if you simply click through a link. Rakuten is a great example of this. They have a browser extension. There's other ones. Top Cash Back is a good one for just earning cash back. But Rakuten has the benefit of not only can you earn cash back, you can elect to earn Amex membership rewards. You can actually now earn built points too, which is another great option if you're interested in those points. But when you're shopping, you can simply have the toolbar up the Rakuten toolbar. And when you go to any website, you're shopping on Home Depot, you're shopping on Walmart, you're shopping on any number of retailers, Best Buy, it'll be a little thing. It'll pop up and says you can earn 2.3, 4x Rakuten points on this purchase. On the other hand, you can start by looking for the Rakuten website. You can go to their site and browse merchants and see what kinds of rewards are available. So it's basically if you're making any purchases on especially larger retailers, very small ones may not have this. But if you're purchasing anything on a larger website and you're not clicking through at least some link to get to that purchase, you're probably giving up at least some of the cash back you can get with Rakuten. If you're earning membership rewards, those might be worth more than $0.01. So you might be better off earning 2x Rakuten Membership Rewards on that purchase versus 2% cash back on that purchase through the link. That's great.

A (60:54)

Next one is how to look up what flights are either out of your airport or the airport that you're going to. You mentioned tool. I know I still Use I just Google the airport name or the city name and then airport Wiki, like Rome airport Wiki. And then on every Wikipedia page for that airport, there's airlines and destinations and then it gives a pretty comprehensive list. Now it's Wikipedia. Is it a hundred percent accurate? No, but it's probably 98 or 99 plus percent. That's how I've always done it. That's the low tech way. Is there a site that you use?

B (61:26)

I tend to do it mostly using flightconnections.com mostly because it's a little bit more of a visual way of looking at it. They have a paid version which I don't subscribe to. That makes it much easier. But even with the free version, you can filter a little bit. You can click on a particular airline and see just a map of where, you know, where from my home airport or from an airport nearby that I like to fly out of. Where are all the direct flights from that airport? And you may not necessarily need to fly direct, but it's a great way to, to get a sense of where things fly. And that's, you know, flight connections is how I know that our home airport of Richmond, Virginia has generally the most flights out of American Airlines or Delta, a small number from JetBlue, a couple from Southwest. United has a decent amount too. But you know, again, from Richmond, the direct flights, there's only maybe five or six destinations. But it gives me an idea of, all right, where could I go direct? And even more when I'm starting to think about, let's say I want to do a big international trip, well, which major cities does my. If I'm in a smaller airport, which major cities can I fly to direct? So if I'm starting to see, oh, all of the great international flights that I'm seeing are out of JFK or all the. They're all out of Los Angeles or San Francisco or whatever I'm looking for, I can use flight connections to say, how do I get to one of those cities? Right? What are those direct flights that'll take me there? So that's the starting point that I usually use. Or if I'm planning a trip that's not necessarily from my home airport, I just want to get a sense of, you know, how could I get to the northern coast of Spain? You know, I can click on an airport in the northern coast of Spain and see that it flies to these six or seven other European airports. And then maybe I want to look for a flight to one of those airports because I'll be able to get to where I'm going. So it's a great browsing tool for just learning a little bit about where I can go from home or where I could get to and from somewhere that I'm trying to get.

A (63:06)

You mentioned something about transfer bonuses. We were talking about the different transferable currencies. So these normally this is not every single transfer partner. Most of them are one to one transfer. So you transfer a thousand ultimate rewards points to United and you get a thousand United mileage plus miles. In some cases not exactly one to one, but vast majority. But now sometimes there are transfer bonuses. Are these things that happen on any kind of regular cadence, are they random? And what would it transfer bonus look like for someone to even look out for?

B (63:37)

Yeah, there can be a lot of great value in these. Some of them are a little bit more predictable. I think there's somewhere between a 20% give or take transfer bonus to Virgin Atlantic miles on at least some bank program almost every month. And some of them are much less common. And really maybe once or twice a year there might be a 20, 30% bonus. So an example, right, maybe Chase has a 30% transfer bonus to Marriott. That's something that happens often. Or you know, American Express might have a 25% transfer bonus to Air France K Flying Blue, right? So basically what it means is that for whatever period of time that they're designating this bonus, if you transfer your your miles over, you get that much more. If it was 1 to 1 before, that's 20% bonus. Now you're getting 1.2. In some cases it is not 1 to 1. Maybe it's 1 to 0.8 and maybe the transfer bonus brings it up to 11 to 1. Or in other cases maybe it's 1 to 2. Certain hotel programs like Capital One and Citi that have some transfer partners where you can sometimes transfer one to two to those programs. There are some good websites you can sort of Google, you know, history of bank transfer bonuses to airlines or hotels. And there are some good articles out there that'll give you a little bit more of a history. So you can see, oh is this program that I'm considering booking through one that seems to have a transfer bonus that comes up every month. And maybe I wait a little bit if I'm not in a rush to book, or maybe this almost never happens and I should just go ahead and book. BILT is a program that has made this much more fun, exciting and complicated because the way that the BILT transfer bonuses work is they're not predictable. They happen for one day only on the first of the month, but they can be of pretty outsized value. 75, 100, 100 more than 100% transfer bonus to some of these airline programs. I've used them before. I've transferred 100% transfer bonus to Alaska Airlines. I think it was a 75 time percent transfer bonus to Virgin Atlantic. So these tend to be a little bit hard to take advantage of if you're not someone who's doing this as a sort of regular hobby on a regular basis. Because that one particular day you may not have a redemption in mind. But if you are about to book something or you're trying to just explore looking up what are the current point transfer bonuses and if one of them happens to fit exactly what you're trying to use, then you're going to get some extra value out of that. Otherwise it's just fun to see sort of what's out there.

A (65:50)

Okay, we're going to punt on talking about hotels and status and perks for the next time we record, but where I want to finish up. Tools to find availability. Now you've mentioned a couple times, a couple of different sites and you also mentioned setting alerts. So those are kind of two separate, but they are tied together. Are there free tools that you generally point people to so websites to find availability and then are there paid ones that, that you suggest and how does that setting alerts go in terms of free versus paid?

B (66:21)

Yeah, we do live in an age that's really very different than just a few years ago where there are a lot more tools and more sort of coming out on a regular basis. Two that I mentioned that I use often that have great free options are points yeah.com and awardtool.com they're very similar. They work like you're probably used to with Google Flights or Kayak or any of those sort of regular cash price search engines where, you know, you put in where you want to go, where you're flying to, where you're flying from. What dates? Sometimes with the free tools you can maybe put in a range of a few dates or maybe the option to put in a couple of different airport combinations and then you can often set a handful of free alerts. What I tend to do is if I'm starting to plan a trip or even if I just booked something that's refundable, I might just go ahead and set up an alert on pointsea.com the day that I'm planning to fly and set the points level for that alert, just below the points price that I just booked it for. And if I get notified that the price dropped, then I might be able to go in and rebook that. Or if I'm planning a trip, I might say I'm trying to go from here to there. I know which city I'm going from, which city I'm going to. I know that these are the two or three days that I can fly. Then I can sort of put in that search and save an alert and get notified when points prices appear that look like they might be a good deal. On the other hand, if I'm just trying to explore and I say, you know, I want to go to Europe at the summer, it would be pretty impractical to try to set up all these alerts for those types of because they're really specific to starting at any destination and the dates. So there's another tool that I use much more for that, which is Seats Arrow. I do use the paid version of that. I think it's about $10 a month. There's some good functionality with the free version. Usually you can only look within, I think a few months ahead on that version. And the paid version you can look up to a year out. But Seeds Aero has some functionality that allows you to really look at broad combinations. I want to look at all major US Cities to all major European cities in business class for at least three people within this date range, plus or minus 28 days and see what kinds of flights are available. The downside of that is that they don't have every route. They have almost nothing from Richmond, Virginia. Right. They don't really have the smaller airports, they're just kind of the bigger routes. But it still gives a really good way of understanding what's out there. If there's a an amazing deal on a direct flight from JFK to Zurich, well then I might go and search for what about one stop flights that connect from Richmond or from D.C. so sometimes this is a little bit of triangulating around. You know, an alert might be exactly what I'm looking for or it might just help point me to my next search to dig in. But those are some great tools. There's also an extension called Points Path that I've used a little bit and has been really getting built out that also has a very useful free version. And what Points Path does is it just when you're on Google flights and you're searching for flights, it'll basically insert the points prices right next to the cash prices. It does it for all the US Airlines. I think it started to do it for some of the international ones. You know, especially if you're just looking for a United American Delta flight points path is a great extension that will basically just go right into your workflow of Google flights and it'll tell you, hey, you know, instead of paying this price for cash, you could, you know, book it for these amount of points. So that's a good sort of hybrid approach if you're just trying to see, you know, without kind of going somewhere else. But that's a great tool as well.

A (69:38)

Wonderful. So award tool points. Yeah. Seats arrow and this points path extension. Okay, that's absolutely great. So that gives people a real good background on, on how to think through this. And then again there's a little bit of nervousness and you know, this, you see this even, even when I ask you questions like no, am I thinking about this right? Am I doing it exactly right? Like at the end of the day you're, you're doing great. You've got a lot of points. You now have a concept of cents per point. You have a concept of what your options are to redeem. And I think that really is the important thing. And also don't fabricate travel. Don't fabricate like, oh, I'm taking a $20,000 first class flight, so my points are worth 20 cents per point when you would have only spent $700 on a, on an economy flight. We're building up this mental tool set of how to approach this.

B (70:28)

There's one other thing that I think is just an extremely useful mental tool that I'd like to just briefly talk about because I think it'll help people get out of this being stuck situation too. And that is why you should love cancelable and refundable bookings. So if you are thinking about this as I've got all these points, I don't want to make a mistake. Most of the bookings that I make these days are cancellable or refundable. What does that mean? I'm talking mostly about award bookings. And there are cash prices that are refundable too. They usually cost a little bit more. But pretty much all the major US Airlines for no fee, United, American, Delta, you book an award flight, you can cancel it most of the time up until takeoff and simply get your points back. There are benefits with hotels too, where often points cancellation window might be one day before, two days before check in. The cash cancellation might be three weeks before. That was on an all inclusive. We'd looked at. And in some cases you can even cancel and rebook for less. You know, American Airlines prices change all the time. And there have been many situations where I've booked a flight and then it's dropped in price and I've canceled it and rebooked it and saved a lot of points. You can also sometimes book multiple options for a trip. Maybe there's a United flight that day and an American flight, you know, later that day. And if you have points in both, you might end up booking both. I've had actually a situation where I had a flight on United and a flight in American and then the United flight got delayed and I was able to cancel that and take the American flight. The point of this is that cancelable and refundable bookings really do help with that mental stress of that trying to find that optimal redemption. I think, Brad, you talked about, I remember when you were trying to book a Singapore flight to JFK that you were stressing about it for weeks and you kept logging into the website over and over again. If you book a refundable flight, you can just book the flight. Don't worry about finding the best deal. Book what it is now and set an alert and then move on. And the magic of the Internet will tell you if you get a better deal later. I've done that before. In some cases, I've been willing to pay more points to make it refundable. Air Canada, you can usually pay an extra 15,000 points to make it a refundable business class flight. To me, this is definitely just a way to avoid this. Again, I don't know enough about this. I'm not ready to book. If it's a refundable, cancelable flight, just book it. You can cancel it if you don't want to take the trip or if something comes up, or if the price gets better, you can usually rebook. So the sort of takeaway from that too is if you're listening to this and you have a trip planned, or you have a flight booked and it's cancellable or refundable, maybe go in and set an alert for something better than the price that you booked. Or if you've been thinking about booking something and you're holding off and you can find a cancel refundable award ticket, just go ahead and book it if you have the points already. Maybe don't transfer in a lot of points to a program that you don't already have just to book something that you're not quite sure if that's what you want, but with a lot of this, it's just getting into it, giving it a try. And those cancelable refundable bookings to me really do help me to get unstuck and just to go experiment and sort of see what I can do. I love that.

A (73:23)

That is absolutely brilliant. No, this has been amazing. Thank you so very much for coming on. I really appreciate it and I think everybody can tell how into this you are and how excited you are and what a great teacher you are. I'm excited that you are willing to help. You've been such a part of the FI community for so long. I know you want to, you want to give back in some way. So I think what we're going to try to do going forward is field questions from the community. I think what would be ideal is like very specific, almost case studies. Hey, I live in this city. I'm planning on going here. I have these points, I have this flexibility. We can just record a 5, 10, 15 minute segment for the podcast or I know we're building out a lot of travel rewards content specifically around this, around redemptions because this is where people get hung up and this is what you are so good at. So if you're listening to this, go to choose a comm slash feedback. We have a leave a travel rewards question. I'm going to route the best of these to Noah and we're going to really just go through them and we're going to build this, this whole backlog of these videos and audios that you can listen to and watch and actually see Noah go through it. I think it's really going to help with that tool set of man, this sounds so difficult. I could never do this to. Oh, look, these are the tools. This is exactly how Noah, who is world class at this and this is how he does it and I think that's really going to help people. So, Noah, a huge thank you in advance.

B (74:53)

Well, thanks, Brad. This is my hobby. I do this for fun. So happy to see if I can do it in a way that helps people out as well. Nice.

A (75:01)

Thank you everybody for listening and send those questions in. You can always hit reply to my newsletter, choose a Vet.com newsletter or subscribe. Subscribe and send the questions in. Go to that slash feedback page and we're going to really build something really special because frankly, this is a pillar of FI and it's just been too long since we've really dove into it. So until next time, thanks for being part of the choose of a community and listening to the podcast.