Travel Rewards Deep Dive With Noah

Hello and welcome to Chooseifi. Today on the show we have my good friend Noah who is actually here with me in Richmond, Virginia. He happens to be one of the worldclass experts on travel rewards. He's absolutely incredible when it comes to redemptions, but he also thinks through travel rewards through a FI lens. And I think that's a lot of what we dive into today. How to really think through what your points are worth, how to consider, and when to spend them. And then we also talk about a lot of a lot about travel rewards tools that are modern-day tools you can use to help redeem these points, which is ultimately what we all want from them, right? We call this a pillar of FI travel rewards. And I personally think you can get one to two nearly free vacations a year. At its essence, you need to know how to redeem these points. And what's fun is as a crowdsource community, we're going to have people like Noah help us along the way actually learn how to redeem and use very specific instances. So this is but the first touch point with Noah and I think you're really going to enjoy this episode and I know you're going to enjoy what's to come in the future as we all work together to figure this out and to really win with that. Welcome to Choose Fi. Noah, welcome to Choose. I'm so happy to have you here. — Thanks Brad. really glad to be here. I've been listening to the podcast for a long time and happy to be able to see how I can help the community. — You have helped me personally with some trips. I still don't know. I don't even remember what we did when I got the Qatar Q Suite from DC to Doha. I think we used Glue points or something crazy like that. — 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. — 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 and yeah, the community is certainly going to benefit from your expertise. So, 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. You came up with this really amazing outline for an episode. And I think where we want to start is travel rewards for the Fi community. I think your first starting point is rethinking cents per point. — Brad, really happy to be here and talk about, you know, was trying to think of what really would be useful for everyone in the fly community to know about travel rewards. You know, this could be a very broad topic. There's lots of specific situations to individuals. There's lots of different ways to approach this. Uh, you know, lots of different goals that people might have, but you know, 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. Uh we talk about financial independence, changing our mindset. And I think there are some concepts that, you know, through my experience with, you know, I I wouldn't say I'm necessarily one of the best in the world, but I like to think that uh, you know, I try to be helpful. Um, through my experience with sort of doing this for myself and trying to, you know, help some friends and family with it. um that I I've come to think about some things a little bit differently than I did when I started out and that in ways that have helped me to, you know, in some ways demystify, but in other ways just sort of decomplicate some of this and not get too distracted by uh you know, some of the complexity and some of the ways that you might see people post on social media or you know trying to make things look a certain way or look very uh you know uh super fancy or you know 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, um so basically I had a few ideas of things that people could think about. So talk a little bit about that sense per point, right? So for those who are new to this concept, right? Cents per point uh or sometimes this abbreviated CPP is really just uh you know a way of measuring how much value did you get for redeeming your points and miles for travel, right? Um, so, uh, you know, if you, uh, if you ask anybody how they calculated that, uh, and you really got gran granular with it, there 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. So, first to set just kind of a baseline, you know, when you think about, you know, 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, right? The basic math. So, you take the price of the flight, you know, this could apply to hotel bookings, you know, rental cars, anything, but you know, whatever you're using, uh, travel rewards to book, you take the price of the flight, you subtract any taxes and fees, anything you're paying in cash, uh, and then you divide that by the number of points redeemed, right? So, if you had a flight that just to make up a round number was $1,000 and, you know, $1,0560 minus $5. 60 60 cents for taxes and fees, which is a common domestic airline taxes and fees price, you have a $1,000 flight, right? Maybe this is a business class flight. Uh, and if you use 50,000 points for that redemption, $1,000 divided by 50,000 points is 002 cents

right? So that's two cents per point. Now, you might say, okay, isn't that how everyone would calculate cents per point? You know, uh, yes, but let me ask you the question is, well, where did you get that $1,560 price? And you know 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. But in you know my mind there are sort of three different major ways of calculating this and common variations. So the first one I call the social post CPP the Instagram CPP. Right? This asks 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. Right? So, you're on the airlines website. You're on Google Flights. You're, you know, looking at how much, you know, is the cash price of this exact flight. You know, switching back and forth between miles and money, maybe on the website, you know, and I see what the dollar cost of what that flight is, right? And this is where all those really exciting high values that you see on Tik Tok and Instagram come from, you know, eight cents, 10 cents per point. Um, and you know, it's what you want to post to your feed for your followers to see. And, you know, of course, like, share, and subscribe, right? Um, but I would also guess, you know, this is the most common way that people calculate it. It's definitely the simplest, right? I looked up the cash price. points and I divided. But is this really the most useful or helpful one, right? Is and is it actionable? You know, 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. So, uh, you know, that's kind of version one, right? Um, so variation two I call either the opportunity cost or the, you know, 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. So as an example, maybe it's a different flight on the same day. You're flexible with your timing. Maybe it's the day before or after. Maybe it's on a different airline. uh but you know something that you consider close enough and basically of the same experience. So you know real example for me a couple summers ago uh I booked four tickets for myself and my family uh 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 each — each one. Yeah. One per person. So you know, of course out of that 12,897, you got to subtract that $5. 60 in taxes and fees. But, you know, dividing that 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, right? But of course, that's that social post CPP, you know? So even though you know it's true there was not another date immediately nearby with that had that 72,000 point award available that same flight on you know 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 you was about $4,392 um for just taking the flight you know same exact flight a different day um so you know to us that wasn't totally equivalent we could have gone in another day um so the best equivalent was really only 6. 1 1 cents per point, right? You know, there was no way we would have ever paid that $12,897 when we could have taken the same flight, you know, another day that worked for us for, you know, 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 So, you know, uh I think, you know, when it comes to for the FI community, that may be helpful to some people, right? Um it is more real, right? We want to look at the truth of the things. We don't want to look at kind of the way it's just sort of packaged up. Um, but I would say, you know, for the bulk of the FI community, it's probably uh going to be, you know, a bigger focus on being more intentional with our spending. And there's a third approach that probably makes even more sense. So, you know, getting those two out of the way, right? The social posts are the best equivalent. The third approach is what I kind of call the minimum viable or, you know, MVP, minimum viable price, — okay? — Or the money savings as 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? " Right? [snorts] If you're fine with economy, if you want a different week, a different month, if you were fine with connecting instead of direct, right? You know, when you think about it, minimum viable is totally subjective. It's really up to each individual person. You know, I know people in this, you know, travel rewards uh hobby who once they fly international first or business class would never dream of going back to flying economy uh you know on a long trip. You know, others would be much happier saving money on an economy flight or you know

having more travel for the same price. And you know that minimum viable criteria might also depend on the trip, right? I'm totally happy flying uh on a two-hour domestic flight in, you know, in a basic economy seat and I may not be happy flying, you know, 12 hours overseas, you know, in that same seat. So, again, this is totally up to, you know, your own level of what's acceptable to you. Again, that's what's great for the five communities. It's all personal, right? It's what works for you. Um, so you could figure this out in a way that's really not too complicated. It's pretend points don't exist. You know, we 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, right? Um so if you simply do that, you look at your flight options and you say, "Yeah, what would I be doing if I booked this in cash, you know, if I looked at that example of our American X-Class, 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 redeye with a four-year-old. And you know, we were we decided lie flat seats were important to us for this trip. Um, but we actually had already booked an Air France business class flight from a different airport on a different date, which we ended up cancelling 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, you know, for example, that flight was also available for my new date range. I didn't check that but that would have made my minimum viable cents per point 3. 6. So I would generally take 3. 6 cents per point any time but again it's definitely a different way to look at it. And you know 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. So, you know, what's the actionable takeaway here, right? You I'd say 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. Um, 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 you know better travel with you know upgraded cabins uh you know 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 cents per point. Um, and you know, again, this is not just sort of theoretical because sometimes if you simply just look at that social post sense per point, uh, and it seems high and implies you should definitely use points for this. Uh, but when you look at the sense 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 sense 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 sensor point really becomes useful is trying to decide, you know, am I going to book this with points or cash? — Yeah, I love that. That's at the end of the day that is the whole point of the last 10 minutes, right? Is it's about making decisions like you said because it really you have a store of points and now for you it's 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 and this is what's fun about it, but it I think a lot of people can get bogged down in the minutia and I that's why I love the minimum viable because I think for me that's really like I know you called opportunity cost the middle one, but I think of minimum viable as the opportunity cost. It's like that is literally what I would have spent in cash. And 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 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 businesser first on a flight that you would have taken economy and been a sardine in a flight for like you said 12 or 14 hours like 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 two to $5,000 on a flight when we can get the equivalent economy flight for $1,000. It's just I I don't want to paint a broad brush, but I think that's probably directionally accurate. And

yeah, I mean, I think again there's just so many layers to this, right? So, like I want to get across to people that there is a cost to the points and know I'd love for you to talk about this when when I'm done here real quick is like I think people get bogged down in oh this is all free travel quote unquote free travel and sometimes that means they're basically fabricating trips that they otherwise wouldn't have taken or maybe didn't want to take. That might be a bit of a stretch but or just wasting points on business or first when at the end of the day you said what are your goals right like that's another thing we need to discuss. So 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 one to two close to free trips with my family this year using rewards points. I think you and I both know that's very doable. But if 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, uh, so again, there there's a lot here, but I'd love for you to talk about that the cash and really like 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 I guess 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? — Yeah. Yeah, absolutely. I mean, totally agree. This is something where people can, you know, think of it as, well, I have all these points, so I might as well use them, right? Uh, 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 uh for my parents. And he said, "Well, shouldn't I just use my Chase points because they're just sitting there, you know, and you know, I should probably just use those, right? " And you know, 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 one cent 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, you know, it is definitely something that, you know, again, this stuff can get overwhelming when you look at all the complexity. Um, but this is another, you know, concept that I think is very helpful, right? So, you know, 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, right, you just said, well, I've been, you know, I might just have a points balance. I might not think of it as I'm paying for these points. Um, but, you know, in reality, you most certainly did. So, you know, this is one of the ways that I think about it. Let's say, you know, you have, you know, you earn 100,000 points through, you know, spending on your credit card over a certain period of time. uh well, you know, you actually paid basically 2% for those points because you could have easily earned 2% cash back if you had been using a cashback card. So, you can kind of cons, you know, calculate maybe a more realistic way of looking at this is, you know, what percentage of the cost of my travel did I actually pay? You know, what percentage off did I get? Um so, you know, as an example, if I earn, you know, two built points per dollar, right? The built card has come out with some new cards recently. Uh I happen to have that built palladium card. Uh not an ad for them, but I like the card, but he gets two points per dollar and everything. And they often have transfer bonuses that might be 100% transfer bonus. So in a situation where maybe I got those built points at two points per dollar and I got 100% transfer bonus. Those points actually cost me uh half a cent each because I earned four points, but I gave up earning 2% back on another card. Right? Whereas, if I earn one American Airlines points per dollar on a city, American Airlines card, those points actually cost me two cents each. Um, so, you know, I could have earned 2%, but I was using a card that earned one point. So, I was basically paying two cents. So, where that kind of 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 is that sort of threshold? Um, on the one hand, I tend to look at it as if I'm not getting at least one cent per point when I'm redeeming points, then there's a pretty good chance that I'm not uh getting value out of these. And in a lot of cases, you can literally just redeem them directly for that. So, you know, city points, uh, Chase points, in a lot of cases, you can actually just cash them out at 1 cent per point. Um, so, you know, there are other ways to redeem points. You can redeem them on Amazon. You can, you know, for maybe 6 cents. Again, this really depends, you know, again, everyone should sort of look up the particular points that you have and ways to redeem them. But, um, generally speaking, if you're not getting at least one cent 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 doesn't have to

jump through a lot of hoops that the those points programs offer. You know, with airline points might be a little bit different. Um but um you know 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 uh and then that you know people might be surprised to see they're actually at times paying more than 100% of the price for that flight by using points versus using cash back. — So — yeah that is such an interesting question. And I think that to me is going to be one of the essential takeaways of this episode is what are you paying, right? And it's a reorienting question. What are you paying? Because I don't think we think about that you could get 2% cash back and like 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 uh that gave 2%. I don't know if that's still the case, but uh but yeah, I think 2% is fairly easy to come by in terms of cash back. Is that roughly accurate now? — Absolutely. I think that Fidelity card is still out there. You know, even that the city double cash card, which you know markets itself with the name as a cashback card, but also really earns city thank you points. But with that card, you can cash those out at 1 cent and you earn two points per dollar and everything. So that city 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 uh you know if you think about it as if I'm in the FI community right again everyone's going to have different levels of interest in how much they want to spend time on how much they enjoy juggling different cards for different categories or if they want something really simple maybe they just want you know one card right the Capital One Venture card or Venture X or a City Double Cash card or you know that built an Ammex Blue Business Plus if they have a business card which earns two points per dollar on up to $50,000 a year spend. You know it's probably a common setup for the FI community. It's a great set it and forget it approach, right? I know I'm earning 2x or 2% on everything. You know, I'm not spending as much time, you know, doing what I have fun doing of trying to kind of tweak and optimize every little thing, right? But, you know, I just want to know that I'm getting kind of a good autopilot approach. Uh, you know, that could be something that someone does, right? They get one of those cards and then they notice, okay, I've got 100,000 points in my account and I find a great award booking and, you know, it's a first class flight to my dream destination on a premier airline and it would have cost, you know, $5,000 even if I had found the cheapest available, you know, premium experience, right? Um, 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 five cents per point. Woohoo. Uh what I would say is they actually spent $1,000 on that flight, right? That two, you know, they could have earned instead of 2x or if they had that city double cash, they could have simply cashed them out. You know, that 100,000 points could have been $1,000 in cash. So they didn't get a free flight. They spent $1,000 on a $5,000 flight. That's still a pretty good discount, right? 80% off. But maybe that was uh actually the social post cents per point. Maybe that was the uh you know uh the price of the flight itself. Maybe there was a totally acceptable economy flight that they could have taken to their destination for $900. So, are they going to use $100,000 points to fly in first class? Are they going to use $900 to fly economy? When you think about it that way, you know, you're actually paying $1,000 for a trip I could have gotten for $900. So, again, that maybe that economy flight in points is only 50,000. Maybe you're getting a real 1. 8 cents per point on that. You know, $900 flight, you're paying 50,000 points. Um, but again, you know, 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, you know, they're not just free. They're not just sitting there, you know, with totally worthless value unless I use them for the most expensive thing I can use them for. You know, they do have value. Um, and, you know, 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, right? Because you can always just, you know, if I always use my American Airlines card, Hyatt Hilton card, uh, well, you know, I might be getting 1x and, I could have gotten 2% cash back. So, I'm really paying two cents per point for all of those miles. Do I want to pay two cents per point for, you know, for an airline mile? Generally, I wouldn't want to pay that. Um, so that's another way to kind of get out of uh that you know, well, points don't have value, but in reality, uh, you know, you just have to look at it a little bit differently. — Yeah. No, I like this. And this is why we spent the first 10 or 15 minutes of the episode talking about those the three different sense per point because that might have seemed a little dense for people, but that is the bedrock for this the entire way to think through redeeming these. And yeah, so we're saying it it's interesting, right? Because there's the what are you paying which is okay what could I have

gotten and if we're saying most likely it's 2% cash back. Now we're not talking about signup bonuses because that actually changes the game entirely but 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, right? So in theory in a perfect world that's more than 2%. Now, there's 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. So, 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, right? So, you have the points. I think a lot of people don't really look at their options like you said, even worst case, and I say that kind of dripping with sarcasm because it's still pretty great, is like you trade it in for 1 cent per point. And now that does for all the travel rewards people out there. They're recoiling in horror. But like but 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 can transfer them to United. " And I 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 payable or any of that other stuff. Just literally what was the cash price because I could have booked this through the Chase portal or I 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 a an entire skill set Noah on like how people need to think through this. So can you add any additional flavor to like that particular we're just using Chase as an example. There are plenty of transferable points, but just a little flavor to that. — Yeah, absolutely. And I, 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, on that one hand, right, generally, I look at as I don't really want to redeem for less than 1 cent because I'm pretty sure I'm losing value. On the other hand, I don't want to sit there and wait for that three, four, fivecent redemption. You know, I don't want to be stuck holding on to these points, right? You know, you know how much points are worth if you never use them? $0. Uh, so, you know, I also don't want to be uh just sort of racking up points with no purpose and then looking at travel and paying cash for that travel because I'm not getting a you know, as high of a sense per point as I as I'm hoping to get. Um, so, uh, if I look at it as, you know, okay, if I am in some sort of a range, right, if I'm getting generally more than two cents per point, um, in sort of my experience with booking travel, uh, I it's pretty much a good idea to book it, right? And to not use cash. If I'm getting less than one cent per point, then uh 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. Um and you know, if I'm somewhere in between 1. 5 cents, pay per point, then it sort of comes down to where are my point balances of what do I intend to use these for? Right? Like I said, point points are worth zero dollars if you never use them. But 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 uh for what I'm trying to do. There's a concept that I call the points balance thermocline. And if you remember back in middle school science class, what is a thermocline, right? It's thermocline in the ocean is the point in the water where there's this transition between, you know, warmer water above and cooler water below. And it's a sudden temperature drop. And when it comes to value of your points, the actual value per point has a thermocline, too. Uh, you know, so your points are not all worth 1 cent. two cents. They're the amount that they're worth depends on how many points you have, uh, and what you might be doing with them. So, you know, these are specific to each type of currency, you know, 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, you know, uh sort of spending uh you know, level? Um if you and if you think about those things, you can sort of 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. Um, you know, we talked we'll talk about flights just to keep this simpler, but let's pretend that all they have is, you know, American Express membership rewards and let's say they have some limitations on travel dates around school. You know, 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. um they want, you know, 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? Roundtrip international flights for 100,000 points per person each way. um 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 uh not going to have any value uh you know when they're — right so worst case scenario it's 800,000 in this case — 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 router 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, you know, cents per point would be for those trips. And maybe it's around three cents per point. So, kind of hold that thought. So, let's talk about how many points they have. So, let's say they have 800,000 American 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 three cents per point, right? That's that sort of minimum viable number that they had just come up with for this trip that they want to do. So they have 800,000 points, three cents per point. They have $24,000 worth of points. Wow. Right. Simple enough so far. — Yep. But what if they have 8 million American Express membership rewards? Right. Are they worth three cents per point? Do they have $240,000 worth of travel in their Ammex account? you know, uh that's what most apps that keep track of your points balance is like award wallet, which is a great app I use and love, but you know, uh they would tell you basically, you know, 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? So, let's say they do one redemption per year. Let's say they have very little spend. They've, you know, maybe they've just found Chuzifi. They're they've binged the first hundred episodes. They've cut their uh their budget, you know, without depriving themselves. But uh you know say last month they uh started their own home farm and started raising chickens and they grow all their own produce and you know 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 you know maybe 50,000 points per year even with their 2x cards, right? So it would take them 16 years to earn enough points for one trip. So maybe they'll actually use all eight million of those points on their family trips for the next 10 years. Well, congrats. They do have, you know, 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, you know, a signup bonus here and there. They buy everything using their rackutin uh account for shopping rewards and they get MX membership rewards that way, too. And let's say they earn a million MX 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. So, maybe cashing them out. So, if they have, you know, the right American Express cards and an American Express checking account, they can cash them out somewhere between 08 and 1. 1 cents. So, really, you know, what a lot of people might have a hard time with is that incremental value of getting more points is really only, you know, 08 to 1. 1 cents per point. So that's that thermocline, right? When if they get above that 800,000 level, you know, their points below that might be worth three cents per point on that ideal vacation and their points above that might only be worth approximately 1 cent per point. Um, so uh you know what is what do I do with all that, right? Cool concept. You know, back to middle school. Uh, well, the simplest thing that any someone could do with that is to come up with a ballpark of how many points they would need for one trip, you know, 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 Hiatt points, right? Then when you're deciding what cards to use or if you are going to sign up for a card, what kind of, you know, points you want to accumulate, you can think about are you above or below that thermocline, right? 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. may be getting a Chase card because there are partners, you know, that Chase will transfer to or ways you can use those points that you can't with MX if you want to book, you know, Hyatt, for example. Uh you're not going to be able to do that with MX points. Maybe AMX has your flights covered and you're ready to start looking at hotels. Um, so you know, whether it's with where to put your everyday spend or whe you know what card to get for a signup bonus, looking at the value of your points, really only having that high value up until how many you're really going to use within a year. That's 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? — Okay, that all makes sense. I like that the thermocline. That's a good idea because yeah, this is important. like you said in essence we just we don't want to hoard points right like 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 a in our real lives with our money we want to live below our means right 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 It's for you to take a step back, you the listener, back and say, "What can I realistically earn? What am I going to earn in a normal year? 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 no is 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, like if they're just sitting there, they're not worth anything. And not to mention, also know you and I 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 sub-optimal strategy to put it mildly. " — Yeah. And like you know you mentioned somebody might b at the idea of redeeming points for 1 cent, right? But if you have more points than you could possibly know what to do 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. You know, I I've used points and redeemed them for 1 cent before when I had too many points and I didn't have a plan to use them. On the other hand, I've, you know, held on to points when I know that I've got something coming up that's going to be more valuable. So again, it's the goal is to, you know, keep people from getting stuck, keep people from having their points sit around unused. Um, 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 some of those will be helpful. — Well, actually, that is the perfect segue to the next question which I was going to ask, which is like a really let's get granular. So, a lot of people want to know, okay, how do I think through this, but then what do I actually do? So, 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. — [clears throat] — I I don't think that's neither of us would say that's the ideal scenario by any means, but 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. " So maybe is that the right strategy? But so I guess I would throw that kind of specific example to you, but uh how would somebody like that think through? But then more broadly, how should the rest of us think through the various point currencies and where we should really focus our our energy? — Yeah. It'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 MX card because we fly Delta all the time. " Another friend who told me, "You'd be so proud of me. I got the American Express Platinum card and I put all of my spend on it and I just saved a lot of money on my Amazon order. So, you know, I cringed a little bit at that story, but um you know there's I think this again sort of misconception that you know what it the travel that I tend to do that's those are the points that I need to earn. 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 check 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 uh kind of bucketing these things into the categories of transferable points and you know really non-transferable points, right? 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, you know, your national car rental free nights, you know, those are sort of with contained within that program. And then you have the transferable points like American Express membership rewards. Chase Ultimate Rewards. Uh you know, City thank you points, Capital One Miles. Uh so you know, Built has a currency. There's currencies like Rove, which is a shopping extension, but it works as a transferable uh currency as well. You can transfer to different airline and hotel partners. For most

people, it generally is a good idea to start with a transferable program, you know. So why would you do that? You know, is it going to take me extra work? Is it have to jump through some hoops? uh possibly. But uh and for you know for most programs if you mostly fly American Airlines, well the city thank you points can be transferred with some of the right credit cards to American Airlines. So you're probably better off earning two city thank you points per dollar on a no annual fee city double cash card if you're able to pair that with a city strata premier card that allows you to transfer 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 and 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, you hear about, right, like to talk about, having points in a flexible transferable currency like a Chase or an MX allows me to accumulate points and be able to use them for a lot of different things. there are, you know, 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 uh for possible trips in the future, uh, you know, American, you know, Express or Chase are a great place to start. City is Capital One's a great place to start. Um, and you know, again, 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? Um, 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. That might not even be the best use of American Express points, but at least it's better to have, you know, 100,000 American Express membership awards that can be transferred to Delta than it is to have 100,000 Delta miles that might not be what you want to use when you go to, you know, you find that that ideal trip that's going to be perfect for your vacation. And it, you know, 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, uh, you could have transferred those from American Express or you could transfer them to Delta. So again, it's that flexibility and for somebody who's just getting started and just, you know, exploring how do I use travel rewards, being in a situation where you have these options, uh, is both probably the most valuable, but I think also the most interesting because it allows you to learn and sort of, you know, experiment with this, right? We love experimenting and Allen and Katie, you know, worked with them for events and they talk about these many experiments and, you know, to me that's another great way to look at this is I don't have to solve this whole thing. 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, City or or Capital One all have a lot of uses for their points. Can be pretty flexible, pretty easy to work with. Um, and just to get started, right, it's about, you know, coming up with something, trying something small, and maybe just starting with one. And again, I would say 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 sort of expand to having two or more. — Yeah, I think it's always better to have options both in life of course money and travel rewards. So 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 MX membership rewards, which transfer to Delta among many other airlines. So, all things equal, you'd rather have the membership rewards points in that scenario. So, uh, a couple of addendums to this. So, questions. 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 how do you think about again your family member comes to you and says hey look I I'm thinking about getting started with this and you advise them let's say pick one of those four. So, Chase Ultimate Rewards, MX Membership Rewards, City Thank You, Capital One. At what point do they move on to the next or does it vary depending on which they picked? — 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 again, that's where, you know, it becomes a little bit personal, but uh 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? Um, are you not even trying to travel much? You just heard about all this and you're really just trying to save some money.

If you get an understanding of what is my you and this doesn't have to be my forever situation, right? When I got started using travel rewards, we just wanted to save money on our annual travel budget. I was not expecting to have these first class flights, but these things evolve as we go. So don't think you have to solve your entire future as you're getting started and think about you know what kind of travel do I want to do right uh and if you are just trying to save money flying around occasionally in the US to visit family then think about what is the typical price of an economy award flight uh on the airline that 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 uh given some uh 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. Uh you know, we actually helped them book some flights to go see the eclipse this summer. We looked at we need four people. Here's sort of the approximate price of a business class flight that they were trying to take. uh and you know multiply that by how many travelers. And if you think about you enough doesn't have to mean enough forever, right? Enough could just mean enough to be able to redeem one trip, right? So, you know, 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? " You know, 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 airlines website or call them to find out, you know, now there's tools like points. Yeah. an 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 you know 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 you know accumulating points in that particular currency until you have about that many points um is a good way to start in my experience, so much of this stuff just comes from again these many experiments, but it comes from trying it out. So, you know, the best way is really just, you know, to pick something maybe smaller or shorter term and just try it. You know, once you've booked your first award flight or you've had your first trip, uh there's a lot more, you know, you can look at, all right, what do I want to do differently the next time? — 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. So this is going to be an interesting example of both of those. So Capital One we said is one of these four currencies. Obviously there are more they're built you mentioned etc. But the four main bank currencies I'm on Capital 1's website right now and these are their transfer partners for airlines. Aero Mexico, Air Canada, Aviana, British Airways, Cath Pacific, Etihad, Fin Air, uh, Air France, KLM, Flying Blue, Quantis, 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? Like, what do I do with these things? So like I think 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 like when they look at a list like that and they're like what are these guys talking about? Like what I know United, I know Delta, I know American, maybe Southwest and JetBlue and I have some Frontier flights out of my airport. Like what am I going to do with Avianka Life Miles? British Airways Miles, I don't I don't understand what they're going on about. So, I'd love to give you a couple minutes to respond to that because I think that's while it sounds kind of like this straw man, I think that's a question that a lot of people have. — Absolutely. And I remember that exact same experience of trying to get started with this. I had some Chase points I had started with, you know, 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? Portugal, right? Is that the trip that I'm going to take? And you know, as you mentioned there, there's, you know, 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 has partnerships with many different airlines that are not part of their alliance but in general there's three major alliances. Star Alliance, Sky Team, and One World. They all have, you know, major US carriers involved, right? Uh you know, 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 or international partners really. And so when you looked at that Capital One list, you notice that Capital One actually doesn't transfer to any of those commonly known US airlines. Doesn't transfer to United American, to Delta, to Southwest, to JetBlue. Um, but it transfers to all of these partners. And so, you know, the again best way to sort of experience what this is like is to go on one of these, you know, 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. Um, so you might be looking at, you know, I'm trying to fly from Atlanta to uh, you know, I'm giving Atlanta because as a Delta example, I'm trying to fly from Atlanta to, you know, XYZ. I search in one of these tools and I see, oh, it looks like I can actually book this flight with Air France KM 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 found to experience that is again to sort of come up with a test, you know, try 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, you know, are actually showing up, right? So you might be flying Delta but booking it through Air France Kale and Flying Blue. Or you might be flying Delta and booking it through Virgin Atlantic, Virgin Red Miles. Um, and so again, there's often multiple ways to book. Um I think again that the sort of secret sauce here is you don't have to learn all this up front. Um as you go in and you look at it you can simply you know search for hey which airlines are in this alliance or who partners with this airline. But you know oftentimes you can just search for one of these point search tools and say what am I seeing? That was how I know that um I don't often have a use for you know quantis miles right like you know 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, right? So, I think that's a great way to again sort of break down some of that trepidation and, you know, not being able to to dive in is to say, you know, you kind of will you kind of learn it as you go. It doesn't have to be uh you know, something that stops you from moving forward, — right? Okay. I like that. And I guess as an add-on to that about alliance partners, I guess the question is what flights are available? So if you go on Delta and you see a whole bunch of Delta flights and they're a wildly varying prices in terms of points, but sometimes you see some of their reward partners show up and sometimes you don't. And then I guess looked at another way, sometimes you go on an alliance partners 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 this kind of a second question, but it does tie in is like — does is there a back of the envelope for like how much flights should cost? I know there 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. But like 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. Like is that supposed to cost me 200,000 points one way? 50 or 100? I have no idea. So I know it sounds like two questions, but I think they are kind of tied together. — Yeah, absolutely. Delta would probably want you to think it's supposed to cost 300,000 points one way. — I set you up with the Delta, of course. — Yes. There are some general sort of ranges that you know people will talk about and that you know I tend to see is you know a business class flight you know or let's an economy class flight to Europe from the US should probably be a good deal in the range of 30 40,000 points you know uh 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 um but you can't just look at the points because you have to look at the taxes and fees so you if you start to search for flights to London you 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, you know, you do have to again sort of doing the math, right? Uh you can if you want to just roughly approximate in my head again, points values might differ, but I just sort of approximate about one cent 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, you know, but if it's 80,000 points and only $5. 60 in taxes and fees, you know, booking through American, booking through United, a lot of times they don't have these extra taxes and fees, uh, you know, that's maybe worth $800. So, you know, with that caveat of making sure you don't ignore the taxes and fees, you know, generally economy flights, you know, 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. Um 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 uh for a good price. If you're a family of four or five or more, uh you may end up, you know, only being able to get a much more limited set of options. And those might be with airlines like Air France. KM 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. Um or you might end up, you know, not being able to find anything if you have those limitations. And it there's some pretty general ways of looking at it, right? Uh if you're a solo traveler, there's a lot more options than if you're a larger group. Uh 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, you know, directly across the, you know, the Atlantic or, you know, I'm willing to go to anywhere in, you know, a warm climate for this vacation, then you start to get more of these options. So um if you know uh if you sort of think about it that way you know the more flexibility that you have the more you might be able to find yourself in one of these you know 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 100 120,000 range and you know that I'm okay with it does depend u but those are some sort of rough ranges of what — yeah that's great that's really great and yeah so as far as I do want to talk about the taxes and fees real quick, but that the other question I I kind of the cardinal sin of podcasting is asking two questions at the same time. So, uh what flights are generally available from partners on the other partners site? — Yes. So, uh this also has gotten more complicated over time, but there are in my experience sort of two ways that this tends to become uh 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 reward level. So American Airlines is a great example where their points prices tend to fluctuate on a daily basis you know based on the demand. They're dynamically priced. uh 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, you know, they basically become flagged as a saver reward. 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 you know it might be very difficult to find uh you know certain United flights on one of their partners Air Canada um at certain times and other times there might be tons of availability to book through Air Canada for United flights. Um, and similar with, you know, Virgin and Delta, that's when where I'll often see, uh, you know, 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 year reward 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. So, it can be tough to predict. Um, I would say 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? Um, you know, just take a look at what's available now. again, look through these award search tools and see what you find. Um, and if you're not finding it, but you're finding it maybe on other dates or you're finding it, you know, 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. — Yeah. And that aspect of it being dynamic. So like I'm picturing it just it they're popping in and out once it gets below that saver threshold. Okay. Then it'll appear on the partners' website. So this is something that yeah, if you set up alerts or if you check back, of course, that's the much more manual version, but uh but yeah, that's important. So yeah, 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, uh, 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, right? But when you're talking international travel, uh, often you will see, and you use London very specifically as an example, I know. Uh but if you're going to almost any country, there are going to be unavoidable taxes and fees that country charges. There's it's not like the your points currency or your airline is trying to screw you in some way. These are just these are unavoidable taxes and fees owed to that government. So there is simply nothing you can do about that. But you will also see that they vary widely depending on the country. So uh that's another thing to consider again flexibility. If you have a multi-ity trip, a multi-country trip, all right, are you really gonna change your whole trip around over $20? Probably not. But if 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 taxes and fees to the tune of hundreds of dollars. And yeah, if you're in business or first, I've seen it really significant. But then there are also things no and we're not going to dive into like every bit of minutia but like there are fuel sir charges that you see British Airways when you use British Airways miles or American miles uh 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. So 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. So we're trying to give you a tool set of how to think through this. We're not going to dive into everything, of course, but this is 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? — Yeah, some of this is just the unavoidable taxes and fees that country imposes, but some of it are those extra search charges. And so you know 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 partner you know airline websites like American United Delta etc there they don't have these fuel search charges. So if you want to see okay you know yes flying from the US to Rome might only cost $5. 60 60 cents in taxes and fees, but from Rome back to JFK on American Airlines might cost, you know, $50 or, you know, might be denominated in euros, but, you know, you can get a sense of, you know, 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, you know, $800 or, you know, on the other hand, you know, Air France KM, 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, you know, points plus cash type of model where you're paying really a combination of both. And again, that can still be the best value. Um, but, you know, 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 you know, 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, you know, minimal taxes and fees, right? Yeah. So, all just part of the tool set, how to think through this. That's what this episode's all about. So, I jotted down seven items that I want to do a rapid fire round, which I almost never do, but there are a million little things that we can talk about. You said something about the Rakutin portal. What is this like an extra way to get points? Yes. So, uh, so Rakutin is probably one of the most prevalent. You know, anytime you are shopping online, uh, you can usually earn some extra cash back or some extra points if you simply click through a link. Racketin is a great example of this. They have a browser extension. There's other ones, you know, top cash back is a good one for just earning cash back. U, but rain has the benefit of not only can you earn cash back, you can elect to earn MX membership rewards. U, 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 racketin toolbar, and when you go to any website, you know, you're shopping on Home Depot, you're shopping on, you know, Walmart, you're shopping on any number of retailers, Best Buy, it'll, you know, be a little thing. You'll pop up and says you can earn two, three, 4x Racketin points on this purchase. On the other hand, you can start by looking for the Racketin website. You can go to their site and browse merchants and see what kinds of rewards are available. So, if you're making any purchases on especially larger, you know, retailers, very small ones may not have this, but if you're purchasing anything on a larger website, uh, 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 the, you know, cash back you can get. With Rakitin, if you're earning membership rewards, those might be worth more than one cent. So, you might be better off earning, you know, 2x Racketin membership [clears throat]

rewards on that purchase versus 2% cash back on that purchase through the link. — Okay. That's great. That's super helpful. 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 a tool. I know I still use I just Google the airport name or the city name and then airport wiki. So like Rome airport wiki and then on every Wikipedia page for that airport, there's airlines and destinations and then it gives uh a pretty comprehensive list. Now it's Wikipedia. Is it 100% accurate? No. It's probably 98 or 99 plus%. Uh that's how I've always done it. That's the low tech way. Is there a site that you use? — Yeah, so I tend to do it mostly using flightconnections. com. Um 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 uh from that airport and yeah you may not necessarily need to fly direct but it's a great way 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 uh has generally the most flights out of American Airlines or you know or Delta um a small number from JetBlue a couple from Southwest you know United has a decent amount too but you know again from Richmond the direct flights there's only maybe five or six destinations um but it gives me an idea of all right where could I go direct and even more when I'm starting to think about you know uh let's say I want to do a big international trip right well which major cities does my if I'm in a smaller airport which major cities you know can I fly to direct so if I'm starting to see oh all of the great domestic all the international flights that I'm seeing are out of JFK or all the they're all out of you know Los Angeles or San Francisco or whatever I'm looking for uh I can use flight connections to say all right where 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 and I just want to get a sense of you know how could I get to the northern coast of Spain uh well 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 could go from home or where I could go, you know, get to and from somewhere that I'm trying to get to. — Okay. Love it. You mentioned something about transfer bonuses. We were talking about the different transferable currencies. So, these normally, this is not every single transfer bonus, transfer partner, excuse me, but most of them are onetoone transfers. So, you transfer a,000 Ultimate Rewards points to United and you get a,000 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 a transfer bonus look like for someone to even look out for? — Yeah. So, these 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, right? Um and some of them are much less common and it really maybe once or twice a year there might be a 20 30% bonus. So an example, right? You know, maybe Chase uh has a 30% transfer bonus to Marriott. That's something that happens often. Or, you know, American Express might have a, you know, 25% transfer bonus to you K Air France Kine 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 miles over, you get that much more. Right? If it was one before, that's 20% bonus. Now you're getting 1. 2. In some cases, it is not 1 one maybe it's 1 to8. Maybe the transfer bonus brings it up to one to one or in other cases maybe it's one to two certain hotel programs like uh you know Capital One and City that have some transfer partners where you can sometimes transfer one to two to those programs. Um but uh in general uh you know there are some good websites you can sort of Google you know history of uh 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 uh or maybe you know this almost never happens and I should just go ahead and book. Um, you know, built is a program that has made this uh much more fun, exciting, and complicated because the way that the built transfer bonuses work is uh they're not predictable. They happen for one day only on the first of the month, but they can be of pretty outsized value. So, you know, 75 100 more than 100% transfer bonus to some of these airline programs. Um, you know, I've used them before. I've transferred 100% transfer bonus to Alaska Airlines and I've done a you know I think it was a 75 time percent transfer bonus to Virgin Atlantic. These tend to be a

little bit hard to take advantage of if you're not someone who's doing this you know 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, you know, are about to book something or you're trying to just, you know, explore, um, 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. Uh, and otherwise, it's just, uh, you know, kind of fun to see sort of what's out there. — Nice. Okay. I like it. So, yeah, I said I had a whole list here. We're gonna punt on talking about hotels and status and perks for the next time we record, but where I want to finish up. It might tie into my own trip, interestingly. So, tools to find availability. Now, you've mentioned a couple times a couple of different sites, but and you also mentioned setting alerts. Are there free tools that you generally point people to? So, websites to find availability and then are there paid ones that you suggest? And how does that setting alerts go in terms of free versus paid? — Yeah, absolutely. And we do live in an age that's really very different than just a few years ago where, you know, there are a lot more tools and more are sort of coming out on a regular basis. Um, two that I mentioned that I use often that have great free options are pointsy. com and awardtool. com. They're very similar. They work like you're probably used to with Google flights or, you know, Kayak or any of those sort of, you know, regular uh cash price search engines where, you know, you put in where you want to go, where you where you're flying to, where you're flying from, what dates, you know, sometimes with the free tools, you can maybe put in a range of a few dates or maybe you have an option to put in a couple of different airport combinations. Um, and then you can often set, you know, uh, a handful of free alerts. So, you know, what I tend to do is if I'm starting to plan a trip or even if I just booked something that's refundable, uh, I might just go ahead and set up an alert on points. com for 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. Um, or if I'm planning a trip, I might say, you know, uh, I'm trying to kind of go from here to there. I know which city I'm going from, to. I know that these are the sort of 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 uh you know points prices appear that look like they might be a good deal. Um 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, right? Uh it would be uh pretty impractical to try to set up all these alerts for those types of because they're really specific to starting any destination and the dates. So there's another tool that I use much more for that which is seats. Um, I do use the paid version of that. I think it's about $10 a month. Um, there's some good functionality with the free version, too, but 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. Um, but seeds. io has some functionality that allows you to really look at broad combinations. U, you know, I want to look at all major US cities to all major European cities in business class for at least three people within, you know, this date range plus or minus 28 days. and see what kinds of flights are available. The downside of that is that they uh they don't have every route, right? 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, you know, JFK to Zurich, uh well, then I might go and search for what about one-stop flights that connect from Richmond or from DC. So sometimes this is a little bit of, you know, 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 that's 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. Um, it does it for all the US airlines. I think it's started to do it for some of the international ones, but u, you know, especially if you're just looking for a United American Delta flight. Um, points path is it's a great extension that, uh, 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. — Okay, wonderful. So, yeah, I heard at least four. So award tool points yeah seats arrow and this points path extension. So okay that's wonderful. That's absolutely great. So yeah I mean I think that gives people a real good background on how to think through this and then really like at the end of the day again there's a little bit of nervousness and you know this you see this even when I ask you

questions like no am I thinking about this right? Am I doing it exactly right? But again, I think everybody should just take a deep breath. Like at the end of the day, like you're doing great. You've got a lot of points. You now have a concept of cents per point. You 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 when and so my points are worth 20 cents per point when you would have only spent $700 on a on an economy flight. " So, I think like again, it's just we're building up this mental tool set of how to approach this. — 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 cancelellable and refundable bookings. — So if you are thinking about this as you know I've got all these points I want I don't want to make a mistake. You know there uh most of the bookings that I make these days are cancelceled refundable right? What does that mean? Right? So 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. If you book an award flight, you can cancel it most of the time up until takeoff uh and simply get your points back. Uh there are benefits with hotels too where often the points cancellation window might be one day before or two days before check-in. The cash cancellation might be three weeks before. That was on an all-inclusive we'd looked at. Um and in some cases, you can even cancel and rebook for less. uh 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 and so you know 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 you know if you have points in both you might end up booking both I've had actually a situation where one of the you know I had a flight on United and a flight in American and the United flight got delayed and I was able to cancel that and take the American flight. So, the point of this is that, you know, cancelable and refundable bookings really do help with that mental stress of that trying to find that optimal redemption. Um, I think Brad, you talked about, I remember when you were trying to book uh a Singapore flight uh to JFK that you were stressing about it for weeks and you kept logging into the website over and over again, right? Um, 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, you know, the ma the magic of the internet will tell you if that if you get a better deal later. Um, so, you know, I 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, you know, I don't know enough about this. I'm not ready to book. uh if it's a refundable canceable flight, just book it and you know you can cancel it if you don't want to take the trip or you know if something comes up um or if the price gets better you can usually rebook. Um so you know 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 cancelellable or refundable. um maybe go in and set an alert and see, you know, for something better than the price that you booked. Or if you've been thinking about booking something and you're you're holding off uh and you can find, you know, a cancel refundable award ticket, just go ahead and book it if you have the points already. Uh 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, you know, again, with a lot of this, it's just getting into it, giving it a try, and that, you know, those cancel 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. 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, frankly. And I think I'm excited that you are willing to help. You you've been such a part of the FI community for so long. I know you want to give back in some way. So I think what we're going to try to do going forward is really field questions from the community. And I think what would be ideal is like very specific almost case studies like hey I live at in this city. I'm planning on going here. I have these points. I have this flexibility. and then 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. If you're listening to this, go to choos. com/feedback. We have a leave a travel rewards question and I'm going to route the best of these to Noah and we're going to

really just go through them little by little and we're going to build this whole backlog of these videos and audios that you can listen to and watch and actually see Noah go through it. And I think it's really going to help again 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 no a huge thank you in advance. — Well thanks Brad. I this is my hobby. I do this for fun. So uh happy to see if I can do it in a way that helps people out as well. — Nice. Well I love it. Thank you everybody for listening and send those questions in. You can always hit reply to my newsletter choos. com/newsletter or subscribe and send the questions in. 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. Thanks for being part of the Cheese community and listening to the