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.
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.
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.
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!