I’m a little behind this year at only about $2,000 in profit for 2015. But realizing how good of a thing it is, I decided to take it seriously and match my travel expenses this year in cashback.
While we went slightly over $20,000 in expenses 2014 for a year’s worth of travel – visiting 20 countries and living out of 4 and 5 star hotels – we are serious about staying under $20,000 this year. I’m a man with a plan. And as part of that plan I have switched my MSing entirely to cashback. This year I will try to earn in cashback rewards $20,000, which will cover all of our expenses for a year of full-time travel.
Why cashback?
To me MS is only worth it at 5 point per dollar and at scale. I have a friend who’s as serious as me and he has the approach that “every mile matters”. Me, it gets lost if it’s not obviously worth it. For example, I don’t do Serve at all anymore. $1k a month is nice, but making the effort multiple times to do small amounts is not.
Similarly, buying gift cards at 1% profit is hardly worth my time. Not because I’m high and mighty, and am worth tons of money. But because I have to be able to compartmentalize things. I have so many projects that are so incredibly time-consuming that if I get my mind out of something it’s hard to get my mind back in it. Therefore, I try to stick to only big projects. Things that scale, and things with big profit.
Profit Margins
Who cares about how my brain works and how I spend my time. The point is really that cashback is where the biggest profit margins are.
When I used to spend all my time to earn Chase UR points, it was very hard for me to justify cashback. After all, we are full-time travelers and we can always use the hotel points and we can always use the flights.
But if you look at Frequentmiler’s list of best category bonuses on credit cards, the best bonuses are cashback. It’s true now more than ever.
Don’t get me wrong. The reason I’m in this hobby is solely because I love travel. If all the miles were gone, I’d still travel the same amount… but I’d probably have never stayed in a Hyatt.
This lifestyle requires millions of miles. But our lifestyle requires $20,000 a year: eating out, trying to go to farflung places, chasing mistake fares, and general living and health expenses.
$20,000 in cashback is totally doable for me right now given the opportunities that exist, my complete ignorance about what “risk aversion” could possibly mean, and eagerness, it should be a piece of cake.
Too much honesty?
On a personal note, in doing taxes I realized that we made a very large portion of our income in 2014 from a few good stock buys. The one I’ve mentioned before here is that I bought American Airlines stock when it was 40 cents a share. That worked out really well for me when I sold at $39 a share last year. Without that one trade alone… I’d probably be… what’s a word for more than broke?
Maybe too serious, but my point is this. I decided that a stock-ignorant-20-something continually picking good stocks (like I bought Netflix at $66 a share in ’12) is nothing but lucky. I can’t reproduce that. After selling all my stocks in the last year… I decided not to buy anymore. The smartest bit in me knows I’m not smart enough to 6x or 80x stocks on a regular basis.
I mean, when I was 22 I was passing through vegas and decided I would bet $5 in blackjack. Now, I had memorized the odds chart (of when to hit, stay or split) and even then my odds were at perfect play 50/50. After a few hours of attempting to burn my $5 I went up $400.
I can figure that this is because I’m really smart, or I had 50/50 odds and someone has to get the good luck. Unfortunately I wasn’t smart enough to realize that I wasn’t smart enough. So despite being absolutely broke, I went back down and lost my $400 in what felt like an instant. A smart man woulda walked with the winnings… or never gone to Vegas I suppose.
A long way of saying that for the last year I’ve decided to take that energy and money and invest in myself. For example, this blog is my baby and is now a reasonable income for people that spend as little as we do.
Conclusion
Right now, I have the opportunity and will to do it, and so I’m going to do it. I’m going to cover all of our travel expenses with cashback rewards.
Even at 4% profit that’s $500k a year, and nearly $42k a month. Despite that being a fair bit of points it’s not going to become a regular thing on my blog. MS has never been a theme and I enjoy writing about redeeming miles way more. Still I want to figure out a way to continue to offer a high level of transparancy and I’ll try to have updates or confirmations in the little ways I can. If you want to read about MS, FrequentMiler does it in way more tactful ways than I ever could.
As always your support is awesome. All of you are awesome and I will still continue to blog to the same level, hopefully higher levels of awesomeness. This week we put out an awesome infographic on How To Tell The Difference Between Airplanes and the newest Complete Guide, part 1 of a seies – How To Earn Hyatt Rewards Points.
If you like the blog… well, obviously I don’t mind your support in whatever way you can. Using our links or kind comments, I’ll be honest and say that both keep me going. Truly. And a lot of my motivation for writing is just that I love this hobby and I love traveling. So the community and travel keeps me going too. Most posts are researched with part curiosity.
Also, I should thank those who continually trust me with tips, some I use and some I don’t. That’s also encouraging and even more so now that I’m making this a part of my income.
Now I’m just rambling. Anyways. I appreciate you all very much, and here’s to a good year of cashback!
![Nick of FM on #40kFarAway [TIF Podcast]](https://travelisfree.com/wp-content/uploads/2019/10/travel-is-free-podcast-nick-40K-120x86.jpg)
How do you plan to MS 42k a month, if you don’t mind me asking? That seems very difficult, especially with you guys being out of the country so frequently.
Just do it all in one day.
Using what means? Redbird?
I personally don’t use Redbird, but I think it’s a great option if you have a Target. But just giftcards man. Everything is here for how to: http://www.flyertalk.com/forum/manufactured-spending-719/
The flyertalk link you sent through is for 1,675 threads on MS (also you can’t even do a search for gc because it’s too common a word). I’ve been reading your blog and Frequent Miler for over a year and am still missing how you can MS on that level. Would you be willing to elaborate just a little more? Amex gift cards? Money orders? resell gift cards, resell merchandise?…..
More big red arrows please. Actually, could you just do my MS for me? I’ll mail you my credit cards and driver’s license!
Yea… just send me your credit cards and I’ll buy the money. Works really well for me. :-p
Going to the trouble of mailing my licensee and credit cards is too much work. Can I just scan my ID and post the credit card numbers here in the comments?? No effort needed. 🙂
I’m starting with this hobby because I want to start traveling all over the world with my wife and kids.
I live in Vegas and have been a professional gambler for many years, I was talking with my wife about MS and how it’s not really worth (for me), since I can bet a college basketball game and get a 3-4% ROI. Still, it’s a challenge, it’s like beating the system, that’s why I find it interesting, even I’m pretty sure I’d win way more money playing poker or betting CBB games.
It’s all about what we find challenging.
If you’re in Vegas some time, send me an email, and I’ll trade with you secrets about how to beat the casinos for your secrets about how you can do all this travelling.
Thanks for the blog, one of the few with really quality content. Hope you continue writing.
David
If poker makes more, play poker man. But I doubt I’ll be investing any energy in it. 😀 I’m the kind of guy who has 1 hobby at a time. I do one thing hard.
But regardless, I’m glad to help with travel tips in the ways I can, and very glad you enjoy the blog. Thanks for commenting!
How can we follow along if we’d like to learn how to do the same? I’m a full-time traveler who spends most of the year abroad and MS’s for sign-up bonuses…but wow, this is taking it to a new level.
Also: is this you and Carrie? In other words, MS x2?
I mean we do EVERYTHING together. So that’s two credit limits and what not. Although not sure how much it helps a lot of the time. I’m the only one with a 5x cb card right now. But it’s REALLY hard when you’re abroad. I got tipped off the Boys And Girls Club card ages ago, which was $75k a month each from anywhere. Unfortunately I go shutdown quickly. So there are some internet things, but not as consistent. It’s good to hit it hard in the US. If I can do $20k a day for a week, that’s huge.
we need some details please on the ms techniques
frequentmiler.boardingarea.com
I’m confused…. aren’t your expenses low, because you use a lot of miles and points? And if you switch to cash back instead of miles and points won’t that make your expenses go up? I realize that you must get most of your points from signup bonuses, but surely you use a lot of points from MS as well. Am I wrong there? (sorry if I’m being too lazy to look this up elsewhere in yours/carrie’s blog).
I have to say, I really like posts like this. I don’t really want to hear the details of how you MS, but it would be cool to follow along in some way with how well you are doing at reaching your goal. Also, it’s really fun to live vicariously a bit through you and Carrie. Thanks for bringing us all along for the ride. Sorry the blog rev is down a bit lately. Hope it picks up.
I was thinking the same thing. Expenses aren’t $20k, but $20k plus a million miles/points. So you’d still need to generate those miles. Maybe you generate that from sign up bonuses, but then aren’t you MS-ing to hit the sign up bonuses, and therefore not MS-ing to get cashback?
The thing is that my credit card signup bonuses are purely for points, that’s where the biggest benefit is.
In spending the benefit is in CB.
We only used 350,000 miles last year which is easy via sign ups. And most all of our hotel points came from promotions. Our spending is wide open for this.
Thanks for the comment. I’ll try to think about how to properly share my progress.
OK, cool that you get pretty much all the points you need from signup bonuses and hotel stay promos!
Glad to hear that the focus of the blog will stay the same. I’m sure it’ll be fun to just check in occasionally on how the MS is going. Maybe an update in the newsletter if it’s a bit sensitive.
I love the site but I don’t want it to become a “how to” on MS, because that’s out there in other places for those interested, and Drew’s original content is of such value I want him working full time on preparing that.
I don’t want that either. 😀 Like I said, I think my angle is redeeming miles… maybe I’m wrong, but for now I’m sticking with that.
I agree, stick with redeeming miles, that’s your angle. It’s where you shine compared to others. There are already a bunch of blogs focusing on MS.
I’m a rookie, but what is MSing?
MS = Manufactured Spend. Using recycled money to hit minimum spends on credit cards for bonuses or for manufacturing points without any actual cash expense.
Really looking forward to the rest of your Hyatt series….very informative. Looking for ways to meet Diamond before promos end. Great blog!
Thanks much! Appreciate the kind comment. I’ll post two more parts on Tuesdays (or Monday).
I’d be really interested to learn the details of such extravagant MS, but you obviously don’t want to share. Nevertheless, I do enjoy reading most of what you do post on your blog.
You were, indeed, very fortunate (lucky?) in your stock picks. You are right. It is foolish to expect to have that level of success consistently.
Yet, abandoning the market altogether is not wise, IMO. You are both young adults with many years ahead of you. You should take advantage of expected long term more modest growth in the market coupled with compounding. You might consider dollar cost averaging in an S&P Index fund and not worrying about the daily ups and downs of the market.
Drew aren’t you being a bit too optimistic here? You seem to imply all the methods you’ll use are common knowledge among the MS community. But I have been getting shut down at various places (WalMarts etc) for more than a year now and virtually all my places are now no go with GC. You seem to be implying you have unlimited access to opportunities to drain GC and the like. No?
This what the basis of my question too….how do you consistently drain $42k/month ($500k/year) in GC per year and maintain 4% Cash back?
I’m not even an MSer, but I know that any system or combination of systems which work on that scale won’t for very long if it’s blatantly and openly talked about.
The MS forum on FT is a lot to take in, but like Drew mentioned, just about anything there is to learn is there.
just found out about a $2500 day load card for $2.5 prepaidian it is on the flyertalk ms spend area
seems like a lot of good ideas on the ms spend area on flyertalk I will be reading that alot more
The $2500. Is dead and was dead when the deal was posted. It’s $250.00
Does anybody know if you can empty your serve account but leave it open and avoid the $1/month? I use it occasionally to meet minimum spend, but don’t want to think about it every month. Even with auto load and pay you still should keep tabs on it, which I don’t want to do.
20k back sounds tough in the current climate.
Certainly at 5%. Mind sharing what cards you use?
OBC is capped, TD is cracking down and WF is limited to 6 months ever
Drew — always like hearing what you’re scheming on. It’s interesting, I don’t MS but have a business that essentially churns for me and I’ve been thinking about this a lot.
I’ve been hot on miles/points the past few years, but have been wondering if changing my focus to cashback makes more sense…especially with all the hotel/airfare bargains/mistake fares/etc that seem to be around nearly constantly. Ultimately cash is the most flexible for life and/or travel, and doesn’t get devalued. The caveat: I don’t chase status at all, and don’t need a suite to be happy.
Regardless – thanks for the recent high quality posts.
Off topic. For how long will an airline let you stretch out a single round trip with all of the stopovers, layovers, destination, and return? Basically, if you can only take one trip, how long can you make it last? Is there a diff between cash or reward flight?
I understand that it’s possible to manufacture spend on a large scale. What’s unclear to me is how you’re able to scale your manufactured spending and avoid adverse action by the banks. If you cycle your credit limit and hit bonus categories hard, how are you able to avoid getting your credit card accounts shut down?
Still a bit of a rookie here, but my guess is he’d pick up 5-10k gift cards per location at a few different places in town. Then these could be dumped off via WM billpay and money orders. It may take 1-2 days, but it’s do-able. The real questions is not getting flagged.
I just got into reading blogs like this one regularly a few months ago, so this is the first time I’ve ever heard of this. While not illegal, it seems unethical. I’m likely just ignorant to how it works. Can someone explain to me how it’s not?
The only thing that I don’t understand is how you’re going to liquidate $42k of gift cards per month?
I’ve been MSing since before the $1 coins (I was the first to find out that their limit $ limit/10 days was actually a limit per card, not person), but that was when it was easy to liquidate. I’ve had several BUXX cards. Then, when you could buy VGC at CVS I was buying them and turning them into money orders. Then it was Bluebird and so on.
Now, I have 4 RedCards, but that’s still “only” $20k/month if I were to unload gift cards right to them. I don’t know of anywhere around me that will let me buy money orders with gift cards (WM isn’t a fan anymore). I know about WM billpay, but afaik, they don’t let you pay off credit card bills and I certainly don’t have $40k of bills per month.
So, what’s left??
I’m not asking for a handout. I’ve done tons and tons of research over the past many years about MS and come up with a few of my own unique ideas, I just can’t find out how people are liquidating that kind of $ every month in the current environment.
Any tips you care to share?
Thanks!
Cmon people this isnt that hard. If you just read the manufactured spending thread you would see. All the 5% cashback cards focus on one of three places. Gas station, grocery and pharmacy. all three locations might or might not sell 500 vgc. If you got those you need to liquidate them and there is everything from money orders to bb/rbird, gobank and many other options. You just gotta be willing to work some and not expect the spoon feed on this. Drew really cant go into all the details here bc he first he already stated that MS is not his focus , but also high levels of MS come with risks and the full details of everything you need to learn will take many hours of reading online and its not something that is easily distilled out in a paragraph or two. Unless of course you are wanting incomplete and dangerous if badly executed advice.
@ Brian
most people buy money orders from Grocery stores or WM provided you have the right cards (sunrise/metabank) one vanillas dont cut it at wallyworld but are good to go at most groceries. You might not have that option as many parts of the USA do not have groceries that do this. In which case you might be in a bad spot to really leverage up. I would suggest exhausting the better prepaid reloadables (get to reading FT more) and grinding out cashback/billpay to liquidate them maybe. There are risks that you could get shutdown and have to float alot while you fight to get the dough back so be informed and prepared.
In my opinion it is very risky. Banks monitor MS and doing it on that kind of scale could see you have accounts shut down.
Interesting to see this take on things…I was reading some article or forum post recently on CB not being as “sexy” as points and I agree…I think seeing the real value for me with the hotel and air stuff inspired me to start learning about this stuff.
I’m going to crunch some numbers for sure because where I’m at right now is solely CB- FINALLY approved for some non-secured (and no fee! yay) cards after starting from zero a bit over a year ago, one is a Discover one with the 5% rotating categories, other is CB too but much lower amt (but good CL at least). I think for those newer to credit and the game it’s nice to see where you can go with this, to start getting in on benefits early on. I’m looking forward to building credit with these and hopefully the points cards will come soon too….
Hey Drew,
Awesome post! I have been recommended your website to my friends!
You mention you are not risk averse, but traveling back to the USA to do $40k in cash equivalent transactions once per month is playing an entirely different ballgame. I seriously hope you’re not going to fly home from Bangkok or Russia or South America and buy $40k of money orders within a week. Talk about a SAR.
Under the Patriot Act, it would not be difficult for DHS to cross-reference your travel and monetary transactions and get really suspicious. Nothing says ‘Welcome Home” like a secondary inspection / cavity search / monitored bowel movement every time you enter the country. 😀
Also, on a less serious but more practical note, to do $42k at the beginning of every month, you are going to need at least $10k credit limits for both you and Carrie, and $20k is more realistic. Do you have the $75k or $100k of reportable income that would be needed to get those sort of CLs? I guess you could always lie on the credit apps, or maybe you have a trust fund we’re just not aware of, or maybe you are making a lot of money from this blog. None of my business in any case, just something to think about.
Best wishes, I hope you do succeed, it will make good reading!
Janet, good, reasonable, and still unanswered questions….
With the effective shutdown of BB & Serve, this post now all the more… intriguing.
We at the Hatfield Haus love reading your posts and it helps keep us (the broke) able to travel (sometimes). Seriously, thank you!