Introduction
If you haven’t watched the movie “The Gambler,” then I suggest you watch it. If you haven’t already, there’s a scene in it that you MUST WATCH. It’s the concept of “Fuck you money.” Go watch the 1 minute clip. It’s essentially the concept of how much money you need to tell everyone to go “f off.” In the movie, John Goodman says it’s $2.5M in the bank. You’ve paid off your house. You invest some of it; save some for taxes. Essentially having enough money to live comfortably. While I haven’t thought much about what my threshold is for FU money, I think it’s safe to say around $10M is plenty right? I mean, you’re not flying private with that money, but you can do whatever you want.
Translate that to this game
I have been thinking about this number for all the miles and points I’ve collected. Now it’s not like you can quit your job because you have so many miles and points, but at what point do you have enough to where you don’t even care if you earned anymore? Right now, I’m sitting on around 1M AA miles and about 700K United miles. I haven’t redeemed either currency in over a couple of years now (due to other currencies being more valuable.) So at this point, I have no desire to earn any more AA or United. I don’t even bother with the Citi AA ‘extra 1K miles for every 1K of spend every month’ anymore. I don’t even bother with the credit card signup anymore. That’s how much I abhor these miles. The incremental benefit of an AA mile to me right now is less than a Skymile. So in my mind, I have enough FU AA and United miles.
Every person’s threshold is different though. Since I have no kids and make only 2-3 big trips a year, let’s assume 300K AA per trip for the wife and I, then I have about 3 years’ worth of travel saved up. If I do redeem 300K, I still wouldn’t want to accumulate more. Maybe if it drops below 300K, then I’d feel the need to get another Citi AA card signup offer to build it back up.
SPG Moments
Remember when Dan spent over 1M SPG points to throw out the Word Series pitch? That was an insane amount of SPG points. I don’t know how many SPG points Dan has, but I’m sure he had enough SPG FU points to do that. Pretty sure he still has that many now. I know a fellow reader who just moved 1M AMEX MR points to go to Nekker this year (he did it weeks before the Virgin bonus.) He had enough FU MR points.
While every person’s FU points threshold is different, I think it’s safe to say that if you’re bidding on SPG moments or overpaying for experiences, then you have some FU points. If you have a finite amount of points and have no way of obtaining more, then you want to squeeze the most value out of your points. I know a reader who would never redeem his SPG for hotel stays because he gets more value out of airfare transfers. But that’s also because he’s newer to the game and doesn’t have FU points yet. For me these days, I’ve stopped caring about maximum value; I now look at how much the MS cost is.
How an MS’er should think about value
Let’s take the Meridien Bangkok hotel for example. When you look at the below screenshot, I’m sure at least 90% of people would pay the cash vs using the points since that’s a horrible redemption rate of 1.1c per SPG (call it 1.4c after taxes.) If you have a finite amount of SPG because you don’t MS, then it would make sense to pay cash. However, if you’re an MS’er, you could look at it like – well 10,000 SPG * .8cpp = $80 per night. That’s cheaper than the cash rate of $140. Easy decision. Of course now the opportunity cost people will say, “Yes but you should have MS’ed on a 2% card and kept the change.” That is a valid argument, but my counterargument to that is I’ve actually maxed out all of my 2+% cashback cards. My order of MS now is cashback card -> SPG -> Merrill, and I try not to dip into Merrill at all. I usually hit SPG and just cycle that until I get more cashback bandwidth. While even Merrill is better than the 1.4c redemption below, it’s the flexibility of SPG that warrants me not touching Merrill.
Conclusion
Wrapping up, so how many miles is enough FU miles? I think for my travel needs, having at least 500K in every currency would constitute as FU miles and points. At that threshold, I’ll drop points on an SPG moment or a subpar redemption. So what’s your threshold?
You’re so right about FU points. I don’t care about how many points it takes, I just want availability on the route I want, in the seat I want, when I want. Just used 390K UA for r/t Standard F SFO-AKL, because was best seat available, with nonstop flight. My time is more valuable than saving points. Last thing I’ll do is add a stop/take a longer flight if all it means is more points. Still have 8 figure balance despite using several million a year.
0.8cpp for SPG? – way too expensive for my blood. Most I’m willing to spend is 0.45cpp.
Just remember. Points/miles are worth exactly zero until you spend them.
Yes, but I’d rather have 1M sitting there vs being short 100K for a last minute JAL F award ticket.
well 10,000 SPG * .8cpp = $80 per night.
^how did you get 0.8cpp MS cost?
10000 spend with vgc costs well over $100 + MO cost
thanks
To me 3 key variables are: how old are you, how large is your family, and for how long do you presume to be able to MS near current volume and cost?
I’m 30 and have a family of 3, possibly 4 someday. I believe MS as we know it will die within 3 years.
Even 1 big trip is gonna cost 500k points. So for example 3 million points would only be 6 years of travel if you did nothing else. My wife’s family lives in Asia, so multiple annual premium cabin award tickets are essentially mandatory for me.
Therefore, my FU threshold would be in the 10s of millions. Gotta think long term.
Pretty much agree with your number. But I think it has to do with what “FU” means to any given person – cash, points, or otherwise. To me, FU cash or points means you don’t need to pay much attention — FU to anyone who expects you to. FU points is the ability to pay “Standard” / “AAnytime” / whatever Skymiles spits out awards because your balances are irrelevant, fly biz / first class wherever, whenever. That would take 8 figure balances. Having 6 or low 7 figure points balances is like having that $2 million — you’re very, very comfortable, but have limits. Having 8 figure balances is like having $10 million and “you can do whatever you want”. I realize there are (probably) MS cost implications to getting there, but whatever, FU.
I also love that part of the movie but I thought the original was better. Was hoping for great things from the movie. I love the seen when he doubles hard 18 though….insane!
Very thought provoking article. What’s my FU point? It’s a moving target.
1) Earn and burn vs. growing stockpile. You have more points than you can use. For me, the incoming and outgoing points are roughly the same. About 2.5m per year. So, until reading your article, the idea of an FU point never crossed my mind. I’d guess it’s a 3x or 4x multiple of my annual spend. But, if I had more points, I’d probably spend more points! Would use the additional points to bring relatives here to visit, stay at even nicer hotels, etc.
2) Devaluations. Having a sufficient stockpile of points provides a sense of security. You can fly wherever whenever. But, with all of the devaluations, I don’t like holding onto too many. It’s psychological, of course. If I suddenly had an FU point balance, I’d probably feel even more incentive to use up my point balance.
3) Spend strategy depends on elite status. I was previously EXP for 3 years. The ability to book an award and redeposit for free played a role in my overall travel planning. I could book more than one itinerary, book J and wait for F to open, etc. A person with the strategy probably has a higher FU point, because they need more buffer.
Definitely agreed with all of these points. Also really wish that free cancellation/redeposit was a privilege at lower statuses too, like Platinum. It’s hard enough to earn Plat that I feel like they deserve it too. :
Ken, exactly my point. I’m at 3-4X my annual spend on AA (my best case scenario) and have no desire for more. So that is my FU balance for AA. It also helps with devals; if it drops 10%, I’m still okay with 1M AA. Doesn’t have to be a moving target. I think each point program and how you use will be different (like if I had 1M SPG, I’d still earn more since I use them much more than AA.)
I look at things differently then most – I got in this game to travel for close to free so I almost always use points. I MS mainly for sign up bonuses and for the 5x categories etc. so I don’t do it big time like most (couple thousand a month). Unless the cash price is less then 1 cent per point or there is a really good promo I will almost always use points. I save my Barclay arrival etc. points for non chain hotel stays.
Finally got a good AA domestic redemption though and was shocked. Got my wife and her friend flights to SJU for 30k a piece…cash prices were between $650-700. I was pretty shocked that they had a decent saver award. Their availability has basically made BA miles useless for me….barely anything lower then 20k a flight on AA these days.
@markostermann:disqus – if you’re redeeming points for 1-1.5 cpp, you should talk to Vinh. He can connect you to people who would gladly buy your points and book those fares/hotels for you with their own cash. They hate seeing people redeem points for <1.5!
Don’t get me wrong a majority of the time I am getting over 1.5 cents per point. I was more saying if it was the example above I would probably still use the points.
Yeah for sure, I agree that it’s still better to use points instead of cash if over 1.5, but between 1-1.5 is a gray area for a lot of people. You’re better off selling the points to someone who’s willing to buy them, which is a win-win situation since you still used points, but now you’re also earning points on that stay or miles on that flight! I accidentally made a Hyatt redemption of 20k points for 1 night in San Diego where the cash cost was around $250. Was pretty mad at myself afterwards since if I had sold the points and booked the hotel with cash instead, I would’ve received another stay credit towards requalifying for Globalist. But I have a strong aversion to spending more than $100/night on any hotels, so made that mistake. 🙁
For sure – everyone has their own rule book! I agree on the $100 a night too haha.
I don’t really think there’s an FU threshold for Bank points. They’re all really just cash.
If you’re rolling in MR use the Schwab Platinum to net 1.25 cpp in your bank account. UR are a straight 1 cpp. 90k SPG = $1200 in Amazon GC through the Marriott Southwest travel package.
These are the valuations I use in my MS calculations. The FU point comes when the Cost of MS doesn’t make sense anymore.
That’s also something I would never do – turn credit card points into cash. I can always use these points to really maximize their value 2-10 cpp, it’s just a matter of time. But the problem is, I never have enough MR or SPG points. I currently owe someone 160k MR. I could easily earn the 160k UR for free, but earning 160k MR for free is a lot more difficult.
I have been using the Blue For Biz 2.3x for the first 12 months to buy non paypal digital gifts GC for reselling. It is capped at 50k in spend but that is one way to get them free.
Good tip, thanks! 2.3x is better than the 1.5x I’m getting from EDP! Wish there was such an easy 5x method as Chase.
They just issued a new version of the card today – 20k sign up too with this link.
https://www262.americanexpress.com/apply-card/business-card/bluebusinessplus-credit-card/151/44960?PID=15-12953123-7242561-0fe4ecc5c2e04b6e9f0bf977b8ff6a9c&BUID=SBS&PSKU=BBP&CRTV=10XLTO
Would also be worth mentioning that some people like me would not bother earning certain types of points unless it came at a free cost of MS…Like you are with AA and UA, I don’t bother with earning any more UR or TYP if it costs me money since I have way too much and it’s so easy to earn for free. I only do UR/TYP opportunities that are free or better.
I think the whole “points vs cashback” discussion would apply here too. I have a finite amount of free time, so I would rather spend it on earning the valuable points currencies like MR and SPG than in cashback endeavors like the 5% Wells Fargo cashback card. People say that earning cashback offsets the costs of MSing points, which seems to me to assume you don’t already make money from a “normal” job or other methods (like stock investing, reselling, doing huge bank bonuses, etc). If it’s going to cost me $5 in fees to make some SPG points that I need, I’ll just mentally earmark that $5 out of my salary. Likewise, any cashback that I do happen to earn on my MS, mentally goes into the same pool of money as my salary too.
You posted on twitter the other day that you paid for someone’s lunch to buy you something at the same price that you thought was too expensive to buy yourself. I think that totally applies to me and the cost of acquiring points too. ;D
Then how would you pay for the Meridien Bangkok? SPG or cash?
I’d use cash and either sell the SPG points to Kenneth or just gulp and keep the points since it’s essentially buying points for cheap, especially as an SPG Plat.
Taxes often kill things a lot though. I wish they would just display the price while searching rather than making you click through as if you were going to book, in order to see the final price. In one recent example, it’s turned buying Hyatt points from 1.2 cpp to like 1.6 cpp, which goes from “worth paying the cash rate to buy Hyatt points” to “better to use points or P+C on this stay now to earn a stay credit”.
Let’s be honest. You wouldn’t sell the points. You’d just use cash and keep your points. Where is your ‘anti-cash’ motto? I’m anti-cash, but for this, I’d use points. Then again, I also MS a lot more than you.
Yup, I wouldn’t sell the points. I would use the cash, because I’m finally learning not to make poor redemptions of less than 1.5 cpp even if I have a lot of points I earned for free (no MS cost). SPG is a little different b/c you earn stay credit even on points stays. If it were Hyatt I’d be like YES definitely use cash at this redemption rate b/c you earn stay credit. But yeah I only have like 400k SPG which is totally not enough, so I’d rather conserve SPG.
I’ll give you a real life SPG example though. I just came back from Bali, where I could’ve used 4k SPG points or pay $80. I paid $80 and earned 3k SPG points back on that stay. I’d say that was worth using cash over points…
How the heck did you earn 3K pts on $80?
Hotels.com was cheaper by $2 or so. So I BRGed and you get a choice of 20% off or 2000 points. So I chose the 2000 points! And earned close to 1000 points on the actual stay plus the platinum amenity.