0:00:05 Hello, boys and girls, ladies and germs. This is Tim Ferriss, and welcome to another germ-ridden
0:00:10 episode of the Tim Ferriss Show. Actually, I don’t know if technically it’s germs, but I have COVID
0:00:16 for the third time. You know, third time is the charm. I’m having so much fun with it. And I thought
0:00:21 I would record this intro late at night, listening to the insects and frogs outside here in Austin,
0:00:29 Texas, because I was completely dead until 2.30 p.m. today. So I am wide awake late at night.
0:00:36 Now, moving on with the show, my guest today is Chris Hutchins. He is the creator and host of All
0:00:42 the Hacks, a podcast that helps people upgrade their life, money, and travel. I’ve known Chris
0:00:47 for a very long time. He previously founded Grove, which was acquired by Wealthfront, and Milk, which
0:00:53 was acquired by Google. He led then new product strategy at Wealthfront and was a partner at
0:01:03 Google Ventures. But most important, most impressive of all, Jesus Christ. Oh, COVID, I love thee.
0:01:08 Could leave that in maybe. Who knows? Most importantly, let’s keep it simple, shall we,
0:01:14 Ferris? He is the person Kevin Rose and I call if we want to figure out how to get a better deal on just
0:01:19 about anything in the world. Or if we just want to learn about his latest hijinks, doing things like
0:01:26 getting $300 flights to Japan, one of my favorite places, or running gold pseudo-arbitrage at retail,
0:01:31 we talk about that some length in this conversation, or dirt-cheap trips to Bora Bora. Actually, I think
0:01:37 we talk about all three of these things in this conversation. Chris always is in search of a
0:01:45 better way, a cheaper way, a workaround, a shortcut. He puts so much time into figuring these things
0:01:51 out. And there’s a lot to be learned from Chris. Now, there are also certain things that he does
0:01:57 with glee that I would pay not to do. But therein lies the beauty. We are on complementary sides of the
0:02:02 spectrum. I took a lot of notes. I have three pages of notes in front of me from this conversation with
0:02:07 Chris. And I think you will also pick up a lot that you can use. And, you know, discard what you
0:02:13 don’t need. Add what is uniquely your own. Something like that. Bruce Lee, thank you for that. Sorry for
0:02:19 the butchering. Chris Hutchins. You can find all things Chris Hutchins beyond my fever dream of an
0:02:29 introduction at chrishutchins.com. That’s Chris, C-H-R-I-S-H-U-T-C-H-I-N-S.com. And we’re going to get
0:02:33 right to the meat and potatoes of the conversation. First, just a few words from the people who make
0:02:40 this podcast possible. My first book, The 4-Hour Workweek, which made everything else possible,
0:02:47 is built around the acronym and framework DEAL. D-E-A-L. Define, Eliminate, Automate, and Liberate.
0:02:51 Now, of course, after you define all the things you want, your metrics, 80-20, blah, blah, blah,
0:02:57 then you want to get rid of as much as possible. Eliminate. But sometimes there are things that are a
0:03:02 huge hassle, like expense management for a lot of companies, which you can’t get rid of. They are
0:03:08 essential to your business. But today, thank God, you can automate it. And there is no better way to
0:03:14 do that than with today’s sponsor, Ramp. Ramp is a free corporate card that automates away your entire
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0:04:15 Not to be a salty old dog, but then again, that’s what I am. But in the early 2000s, back in the day
0:04:21 when I was running my own e-commerce business, the tools were atrocious. They tried hard, but man,
0:04:27 was it bad. You had to cobble all sorts of stuff together. Huge pain in the ass. I could only dream
0:04:33 of a platform like Shopify, which is this episode’s sponsor. Shopify is the commerce platform behind
0:04:38 millions of businesses around the world. Believe it or not, I got to know them when they had eight or nine
0:04:45 employees. And now 10% of all e-commerce in the U.S. is on Shopify, from household names like Mattel and
0:04:51 Gymshark to my very own limited edition Cockpunch Coffee. Remember that? Story for another time.
0:04:57 Now, back to the early 2000s. Then, nobody even thought of AI. Who could have predicted, even in the
0:05:03 last 24 months, the magic that is now possible with AI? Shopify has been ahead of the curve,
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0:05:31 Best of all, Shopify expertly handles everything from managing inventory to international shipping
0:05:38 to processing returns and beyond. It’s all under one umbrella. And man, no man, could I have used that
0:05:44 back in the day. And if I ever do something like that again in e-commerce, I will use Shopify. If you’re
0:05:50 ready to sell, you’re ready for Shopify. Sign up for your $1 per month trial and start selling today at
0:05:56 shopify.com slash Tim. Why not learn a little bit more? Shopify.com slash Tim. One more time,
0:06:03 shopify.com slash Tim. Optimal minimal. At this altitude, I can run flat out for a half mile before
0:06:08 my hands start shaking. Can I ask you a personal question? Now would have seen an appropriate time.
0:06:14 What if I did the altitude? I’m a cybernetic organism living tissue over a metal endoskeleton.
0:06:27 Chris, as the caffeine’s hitting my bloodstream and we can treat this as a warmup, who knows? It’ll
0:06:35 might make it into the final cut. The goal here, multifold, so shall we call it goals, is to figure
0:06:46 out what on earth I should do with my Frankenstein of points and miles and so on that I’ve accumulated
0:06:53 over my adult life since college, basically. That’s one. The other is to make sure that it doesn’t get
0:06:58 into the conversation such rarefied air that people are just like, wow, this is a great conversation for
0:07:07 the 0.001%, which I actually don’t think we’re at too great a risk of because, and we’ll get to the
0:07:14 total tally and so on. Effectively, as soon as I began starting businesses, I put everything on my
0:07:21 cards. So advertising, monthly spend, trade shows, anything and everything that I could put on the
0:07:34 cards, I put on the cards. And you, of course, are a 10th degree black belt in the Jedi arts of points
0:07:42 and various types of arbitrage and trade and just general skullduggery. Excuse me. Not skullduggery.
0:07:48 I just had to use that because Mike Tyson likes that word. And there are levels and then there are levels,
0:07:56 I would like to think of myself as pretty aware of how to find shortcuts here and there. And it’s not
0:08:03 really shortcuts that we’re looking for, but kind of clever, elegant, not just techniques, but hopefully
0:08:08 we’ll get to some principles overall that will allow people to deal with what I think is a very common
0:08:17 headache. Because in my case, I’ve accumulated all this stuff and every time I look at my points and
0:08:21 we’re going to get to some of your shenanigans in a second, because I want to hop straight to a couple
0:08:29 of real life examples that seem insane. And people look at these points, I look at these points and I’m
0:08:34 like, number one, I have no idea what to do with these. Number two, I assume they’re basically worthless.
0:08:43 Number three, I feel like I’ve lost a sucker’s game every time I look at them. Does that make sense?
0:08:48 That I’ve sort of signed up for a game that in the end, it’s like wandering through a casino,
0:08:55 the house always wins. And for all of those reasons, plus just the general brain damage of
0:09:00 trying to figure out what to do and do they make it difficult like an insurance claim, whatever,
0:09:07 I haven’t really put a lot of effort in. Every couple of years, I’ll put a few hours in and I’m like,
0:09:12 too hard, too complicated. Don’t want to deal with it. And then I exit the side door and then
0:09:18 I’m right back to where I am today looking at this balance of points and stuff. So that’s my confessional
0:09:27 part one, but there’s so many different places to start. So I’ll let you choose. And I think it’s fair
0:09:32 to say for the record, and you’ve been very transparent about your finances and stuff. It’s not like you’re
0:09:39 driving around in a fleet of Bugatti is a different color for every day of the week that you have a
0:09:47 private hangar of 17 jets. That’s not your life. You’ve done very well. And I don’t know if it was
0:09:54 at the same time prior to or after we recorded that mega marathon on podcasting. You wanted to ask me a
0:09:58 bunch of questions. And so I was like, hey, let’s just record it. But you’ve gone full-time in the
0:10:04 All the Hacks ecosphere. I guess this is all to say I’m trying to set a reference point for people
0:10:11 listening for you. Because they might assume that you’re like Kevin, as in Kevin Rose, or that you’re
0:10:17 a venture capitalist, or that you have tens of millions, hundreds of millions of dollars, and
0:10:22 therefore the numbers that I’m about to give, they might discount. And I’ll just throw those out and
0:10:26 then you can take this tangled mess of an introduction and do with it what you will.
0:10:32 So you bought 300K worth of gold at Costco in the past year. And I’m like, wait, what? You could buy
0:10:39 gold at Costco, first of all. And then there’s the amount. And then I was asking you about Amazon-related
0:10:44 arbitrage. And you’re like, yeah, well, that’s fair game, but it doesn’t really happen or work anymore.
0:10:51 But I did buy $1 million of gift cards in January. $1.02 million to be precise. And I’m like, what the hell?
0:10:59 Okay. So that is one of the messiest on-ramps I’ve ever offered a guest. But why don’t you
0:11:03 take that? I think you’d understand the intention behind it, which is like, let’s give some crazy
0:11:11 examples. And let’s also ground in reality kind of who you are. So these numbers are able to be put
0:11:12 into some kind of context.
0:11:18 I think that the easiest way to explain both those stories and who I am in kind of a very concise way
0:11:25 is that I really like the arbitrage of anything. And I kind of grew up in the, you know, maybe upper
0:11:30 middle class, middle class. But I went to a private school and my parents didn’t give me money. They
0:11:36 weren’t like, here’s my credit card, like many people I knew did. And so I was always like, how do I kind
0:11:41 of keep up with the Joneses per se? But I didn’t have a credit card to take debt out on, like there
0:11:46 were no other options. So, you know, I was finding these arbitrages early when I was like, oh, kids
0:11:52 like pizza. I want pizza. I don’t have money for pizza. Let’s order pizzas to school, sell slices and
0:11:57 eat my profit. So I get free pizza every night. Like it was kind of like, I’ve always been thinking
0:12:02 in the back of my head, how do I do the thing that everyone else with all this money and all these
0:12:07 resources does? How do I get to do that even though I don’t have the resources? And so that’s
0:12:13 been my like MO for life is I don’t want to sacrifice, but I also don’t want to go into debt
0:12:18 or just spend money I don’t have. So you mentioned gold, you mentioned gift cards. The gift card
0:12:24 thing was interesting because as is sometimes the case with venture backed startups, companies
0:12:30 are willing to take investor money and sell things at a loss and lose money to grow. And there
0:12:36 was this weird window late last year, early this year where there were ways that if you were creative,
0:12:42 you could buy gift cards, a huge discount. Gift cards to where? What kind of gift cards?
0:12:48 There was an app called Pepper. Okay. And they were selling gift cards for a discount in a convoluted
0:12:52 way. They’d be like, well, you could buy Amazon gift cards. You could get a $500 Amazon gift card
0:13:00 for $500. And then we’re going to give you 30 X points in 14 days that you can redeem for other gift
0:13:06 cards. But they were holding the best deals for the biggest spenders. So like the average consumer
0:13:10 wasn’t getting the best deal. And I just realized that I don’t necessarily want to take on the risk of
0:13:16 like if this company goes under, they owe me 20, 30, 40, $50,000 worth of points. But there were lots of
0:13:21 people that did and they didn’t want Amazon gift cards. So they were willing to sell them at a loss
0:13:26 or not a loss at a break even, right? They were like, I’ll buy Amazon gift cards for what at the
0:13:33 end of the day will be 20% off and I’ll sell them for 18% off. And I was like, I can do much better
0:13:40 trying to arbitrage that than take on a lot of risk. I literally sent an email out to my list and said,
0:13:44 hey, who wants to buy gift cards? And I set up an e-commerce site and we were selling Amazon gift
0:13:50 cards at 10% off. Now who doesn’t want 10% off Amazon? You know, like why not? But I could buy
0:13:56 the Amazon gift cards for somewhere depending on the day between like 12 and 15% off. And so people were
0:14:02 stoked getting 10% off Amazon. I was stoked because I was making a little bit of a profit, but even better,
0:14:08 I could buy all those Amazon gift cards from people with a credit card. So I spent a million dollars.
0:14:14 I probably made, you know, 2 million points buying those million dollar gift cards and then a little
0:14:18 bit of profit on top of that. And then everyone that bought them was like, I’m saving money on Amazon.
0:14:24 So it was like a total win-win because there was this rare moment where gift cards were selling at
0:14:31 ridiculous prices. And that’s still true today, maybe not as ridiculous, but just so people don’t
0:14:36 think, oh, I missed the boat. This is never possible. Anyone that has a credit card, whether it’s Amex or
0:14:40 Chase, there’s all these parts of the website where it’s like, here are some of the special offers you
0:14:46 have on your card. And earlier this year, Amex had one where it was spend $200 at Lowe’s,
0:14:52 get $50 back. I don’t need anything at Lowe’s, but I had that offer on seven different cards.
0:14:59 So I took my daughters, we went to Lowe’s, we bought seven $200 gift cards to Dick’s Sporting Goods.
0:15:05 And then we just resold them for like 91 cents on the dollar. But because we were getting 50 off each
0:15:11 $200 purchase, we were buying them for 75 cents on the dollar. That kind of stuff happens all the time.
0:15:16 And so anytime I see something that’s extremely on sale, I think, how can I make money?
0:15:21 So let me hop in here for a second, because I imagine there are some people who are like,
0:15:27 I’m definitely going to do that, who are listening. And then there are people who may be cut from a
0:15:33 similar cloth to myself. And this is part of the reason why, before we started recording, I said,
0:15:38 Chris, let’s get to unraveling the mysteries of the universe. Because I realized,
0:15:42 much like someone said to me long ago, they said, if you want to understand somebody,
0:15:48 talk to them about money and talk to them about sex. Like once you get into arbitrage and time and
0:15:55 value, it kind of opens Pandora’s box to everything. Philosophically speaking, your beliefs about the
0:16:00 world, that might sound like a grand statement, but here’s where I’m going. There is a religious
0:16:05 war foot. You guys may have seen it in the news, not talking about the Middle East. I’m talking about
0:16:11 personal finance, where you have ultra frugality on one end of the extremism, let’s just say,
0:16:19 super, super reusing cotton balls type stuff. And then you have on the far other end, maybe where
0:16:23 I’m perhaps a little bit closer, folks who are like, just make more money. Because the upside
0:16:32 is unlimited, uncapped in a sense, whereas you could only save so much money. But what I’m hoping for
0:16:38 today is that we’ll explore the whole spectrum. Because much in the way, I’m going to take a lot
0:16:42 of positions in this conversation. Right now, I’m going to be your defense attorney. And the reason I
0:16:51 say that is that for you, it’s turned into your sport. It started off as a survival arbitrage mechanism
0:16:57 to keep up with the Joneses. And then it’s become a professional sport that you play at the highest
0:17:04 level. Much like if I go to Uzbekistan, which I did long ago, I might try to learn Uzbek. But for most
0:17:09 people, that’s fucking ridiculous. You’d never want to learn any Uzbek. It’s a total waste of time.
0:17:15 But that’s my sport. So with all that said, let’s talk about the gold. And then I have some maybe
0:17:19 opening questions that we can get into. So what’s the story with the Costco gold?
0:17:24 So Costco sells a tremendous amount of gold. I can’t remember the stats, but it’s got to be on
0:17:29 the order of hundreds of millions of dollars, I guess, of gold. And it’s kind of funny because
0:17:33 sometimes you’ll check out at Costco and it’ll be like, do you want this gold bar? It’s $3,300.
0:17:37 And it’s like, you know, more than anyone would normally spend on groceries at all.
0:17:44 Now, the crazy thing about Costco is that if you have a Costco executive membership,
0:17:49 so they have two tiers, $65 and $130. At the executive level, they give you 2% cash back
0:17:57 on everything you spend at Costco, up to $62,500 a year, which for a normal person is like plenty
0:17:57 of cash back.
0:18:01 I think I see where this amount of gold is coming from.
0:18:08 But when they sell gold, they don’t have a dynamic price. They say today gold is $3,329.99.
0:18:14 And the gold market changes throughout the day. And so there are times where when you’re at Costco,
0:18:19 if you look up online, like would buying this gold bar and selling it, you know, what would be the
0:18:25 margin? And I would say you almost never make money. Costco is not selling gold at a price that you could
0:18:33 flip it for a profit. But they are giving you 2% back. And very often that 2% back makes up the loss
0:18:38 you would take reselling it. And you can buy things at Costco with cash, you could buy things at Costco
0:18:43 with a debit card, and you could buy things at Costco with a credit card. So if you were to buy
0:18:49 $100,000 of gold, and you didn’t lose money, you could still keep the points you got from that
0:18:54 transaction. But I’d actually argue that if you time it right, you can also make money on the spread
0:18:59 because sometimes that spread might be half a percent. And Costco is willing to give you 2% back.
0:19:01 And so that one and a half percent can be profit.
0:19:09 Okay. Got it. So the $300,000 plus of gold basically was hitting the upper maximum
0:19:13 of what you could get in terms of cash back. Yeah.
0:19:17 When I’m sitting at the checkout counter at Costco, I’m like, okay, gold’s this price. I look at my
0:19:22 phone and I say, okay, what could I sell this gold for? Okay. I could make a profit selling it for
0:19:27 getting even points. I could just make a profit selling this gold. Okay. Bring up the Costco
0:19:34 groceries totals 180 bucks. Could you please add five, which is the limit five $3,500 bars. And they’re
0:19:42 like, really? Okay. Your total now instead of $180 is like $15,180. And then assuming you have a card
0:19:48 with the right limit and your bank’s not going to decline a $15,000 transaction, tap to pay. Thank
0:19:52 you, Apple for the simplicity. And then I literally sell it before I’ve left the store. Like I’m not
0:19:58 trying to invest in gold. That’s my question. Okay. So the gold is not solid bars sitting in a
0:20:04 shopping cart because you just be, there’ll just be people hanging outside. You do. Yeah. You get
0:20:09 five, but I wish I had them here. I have a rack that holds them. But as an example, this is a rack
0:20:16 from PAMP, which is a Swiss company that just holds bars. So this rack probably holds 20 bars of gold,
0:20:23 one ounce bars. Hold on. So I guess there are two questions. So do you just basically like keep one
0:20:28 hand on your concealed carry, which is probably not something you can do in California, but then you
0:20:35 take like a loop around the store with your shopping cart full of gold and then return it to the store.
0:20:39 When you say you’ve sold it before you leave the store, what do you mean by that?
0:20:44 So what I mean is I’ve gone in and I’ve locked in the price. So I did a whole episode, by the way,
0:20:49 if someone like wants to go really deep, the guy who runs the marketplace, pure collect pure.com,
0:20:54 it’s a gold marketplace for all kinds of stuff. I did an episode interviewing him just about
0:20:59 gold and how that works. So I go in, it’s a buying selling marketplace. There’s bids and asks. And I
0:21:03 say, I’m going to go take one of these things and I’ve locked in the price. So I don’t mean I’ve
0:21:08 shipped it off, right? I go to the counter, I give them my receipt, I put it in my pocket.
0:21:14 For people who aren’t familiar, an ounce of gold is like three or four credit cards. And that’s in the
0:21:20 packaging. It’s even smaller if it wasn’t wrapped. It’s like six SD cards if it’s like, you know,
0:21:26 unwrapped. So I put it in my pocket. I usually try to do this earlier. So I’m not just like someone’s
0:21:30 watching me pick up the gold, walk out the door and all that, but I haven’t had any issues.
0:21:35 And then I go home and I follow their shipping guidelines to drop it off at FedEx. And so it’s
0:21:39 kind of funny sometimes to go to FedEx and drop a box off knowing there’s like $50,000 of gold in the
0:21:46 box, but it’s insured. So I’m kind of okay with it. Does it cost you more than your cash back to
0:21:51 insure it? The marketplace insures it for you. As long as you ship it according to their requirements,
0:21:57 like double boxed, taped in a certain way. There’s some strict requirements because they don’t use FedEx
0:22:01 for insurance. Obviously, like FedEx would charge an insane amount of money. So they use like a third
0:22:08 party insurance company. Okay. All right. Got it. So this podcast is very self-serving for both of us in a
0:22:15 sense, right? So this is a way that I am able to recruit you to do a lot of heavy lifting on my
0:22:20 points, right? We’ve discussed this. That’s transparent. And then it’s also a way for you
0:22:25 to promote what you’re up to, which is fantastic because you’ve been able to take something that
0:22:33 can be very time consuming and also turn it into a business, which is great. And for people who are
0:22:38 wondering, because you may not have Chris as a friend who’s willing to do this on your podcast,
0:22:48 we are going to discuss how you can find low lift approaches or sort of time efficient approaches to
0:22:54 exploring a lot of this stuff. For instance, there was a website you recommended, Chris. I know we’re
0:22:58 hopping all over the place, but I had never even heard of it before. I put it in my newsletter and
0:23:05 I’m blanking on the name. Award tool. Yeah. So could you describe what this is? Because it’s very
0:23:11 straightforward and it was simply off my radar of awareness. So what is this? Yeah. So if we zoom
0:23:17 zoom back a while, I think we live in this world where credit card points are easier to get than
0:23:22 they’ve ever been, right? Like if we go way, way back in history, it’s like they didn’t exist. Then you
0:23:26 could get one per dollar. And now it’s like, depending on where you purchase, you could get five points
0:23:30 per dollar. You can get a hundred thousand points when you open a card. And then we were
0:23:33 in this weird area for a few years where it’s like, well, there’s lots of them, but it’s very
0:23:39 difficult to use them because to get the most value, you have to know all the kind of Jedi mind
0:23:44 tricks, if you will. And then a couple of companies came out and said, we’re just going to build tools
0:23:51 that are as simple as Google flights that make it really easy for you to find ways to get real value
0:23:57 out of your points. So there’s two sites. There’s probably like five or six. I’ll give the three
0:24:02 that I like and how they’re slightly different. There’s really two things you might want in this
0:24:09 world if you’re trying to use your points. One is inspire me and give me the best deal. And one is
0:24:14 help me find the best way to get from A to B. So award tool, which is the one you talked about,
0:24:20 I think is better for the person who’s like, I want to go to Japan. I have a few days of availability
0:24:25 that I could explore. I could go a couple days earlier, a couple days late, but ultimately I
0:24:31 want to go to Japan. And that’s just award tool.com? Award tool.com. So you could say, hey, I’m going from
0:24:37 San Francisco to Japan, or you could even say San Francisco to Asia. And I want to go in this window
0:24:41 and it’ll come back and say, here are the best deals. And you could filter them and say, hey,
0:24:49 I only want nonstop. I only want to fly in business class, or I only have points with Amex. So don’t show
0:24:54 me other options. And you get these things where right now from San Francisco, and I just looked
0:25:02 at Asia, but here’s San Francisco to Tokyo in economy on June 5th, 37,000 points plus $11 in taxes and
0:25:09 fees. 37,000 points, if you redeem them for Amazon gift cards, might get you, I don’t know, I think
0:25:18 it’s 0.6 cents. So $222. It is rare that you will find a flight to Japan, even in economy, for $220.
0:25:24 Yeah, that’s nuts. Okay, cool. That’s the equivalent I was looking for. What are the other tools that you
0:25:29 would recommend? So the other one that I like is called Points Yeah. And it has this part of the
0:25:38 website. EAH. Points Yeah. Okay, got it. And you go to the Daydream Explorer feature,
0:25:45 and they just give you a map of the world. And you say, you know, hey, I want to go to a beach
0:25:52 in first class from the United States. Take me there. And it’ll be like, oh, well, did you know that if you
0:25:59 want to go to this place? It’s only this much. So this summer, I could go to Lisbon for 45,000 points,
0:26:06 but not in coach, in business class. So you want to go to Lisbon in business class for what Amazon
0:26:11 equivalent would have been like $275. Anyone listening probably knows you’re not finding $275
0:26:16 business class tickets to Europe in the summer. Yeah. And there it is.
0:26:21 So I like that from more of a inspire me. It’s like, I don’t know where I want to go. I don’t know when I
0:26:27 want to go. At the end of the day, I would say the more flexibility you have, the more your points
0:26:32 will take you way, way further. If you come to me and say, I need to be in Japan, and I need to take
0:26:38 this one Japan Airlines flight, and I need it to be on this specific day, what can my points get for me?
0:26:44 Might not be more than you would get just booking the flight on the Amex Chase Capital One, etc. portal.
0:26:50 So that’s the conversion. You mentioned a few things, right? That kind of underscore what makes this
0:26:57 whole game attractive to a muggle like me who has not had the inclination, still doesn’t really have
0:27:04 the inclination to get really deep in the weeds. It’s like $222 flight to Japan, $270 business class
0:27:10 flight to Europe in the summer. Like, yeah, of course I want to do that. I grew up being super ultra,
0:27:16 ultra frugal, right? So that hardwiring is still there. So as financial savings catnip,
0:27:22 that is very, very attractive. I hate wasting money. I still way overeat because I’ll save
0:27:26 leftovers and stuff because I don’t want to waste food. I mean, I’m still that guy who will pack up
0:27:33 everything. But this has seemed very complicated. So I’m hoping you can help us uncomplicate it.
0:27:40 Before we get there, let me give people a snapshot. So you have, through all of your various techniques
0:27:46 tricks and tricks and this, that, and the other thing, 22.8 million points, something like that.
0:27:50 And what is my total at the moment?
0:27:52 You’re at 15.5.
0:28:00 Yeah. So it’s 15.5 million. Keep in mind, guys, this is for the last 24 years. And I’ve also
0:28:06 frittered some of it away using MX points to buy stuff on Amazon and so on, which would get me a
0:28:13 a heavy ruler on the back of the hand from Dr. Chris. But we’ll get to that. Just a few more
0:28:21 factoids. I have not fact-checked this, so I’m relying on Christopher. But how significant are
0:28:23 loyalty programs to airlines?
0:28:29 So there’s a really great video if you want to go deep on this. I’ll give you the kind of high
0:28:35 level on both loyalty programs to airlines, which is kind of frequent flyer miles. And it’s the
0:28:41 craziest thing I think I’ve ever come across when understanding business. And it’s that the market
0:28:49 cap of the major three airlines, American, United, and Delta, meaning the total value of the company,
0:28:56 they all have a market cap between $6 and $20 billion. The market cap of the loyalty point
0:29:02 program explicitly, not the airline, but just the subsidiary of it, ranges depending on the airline
0:29:10 from $22 to $26 billion. So the loyalty programs are worth more than the airline itself. So everything
0:29:14 that is United that is not the loyalty program is worth negative $12 billion.
0:29:22 And so there’s this common understanding in this kind of points, miles, airline world that like
0:29:29 airlines really exist to be effectively banks for their miles and points. And then they just have
0:29:35 to fly these planes all around the world so that that bank can continue to operate. Because Delta came
0:29:42 out and said, I think it was a year ago, they said in 2023, 1% of US GDP went through a Delta Amex card.
0:29:49 Right. So the transaction volume on Delta Amex cards was 1% of GDP, or I think they said just shy
0:29:54 of 1% of GDP. They didn’t give an exact number. So every time Amex is awarding these Delta miles,
0:30:00 every time you’re using your chase points to transfer to United, they’re effectively selling those points
0:30:06 to those banks so that they can give them to the cardholders. And so the business of selling those
0:30:13 points is massive. And the profit margins of an airline, just the airline part of it are like
0:30:19 laughably small. I think the average profit per passenger for US airlines on average is $10.
0:30:26 And I think American Airlines was the bottom. It was the profit per passenger per year on American is $3.40.
0:30:32 So if you’re wondering why they shill those credit cards so hard over the loudspeakers while you’re trying
0:30:35 to watch your movie in peace, this is why.
0:30:43 Yeah. United Airlines sold almost $4 billion worth of miles as part of their business. This is a little
0:30:48 old data, but back in 2019, it’s probably only gone up from that. And if anyone remembers during the
0:30:54 pandemic, airlines were hurting. Nobody was traveling. And so in order to survive, they had to mortgage,
0:31:00 they had to basically raise money and they couldn’t put the airline up. So all three airlines put their
0:31:05 loyalty programs up. That was the collateral and raised, depending on the airline, like $6 to $10
0:31:08 billion each using the loyalty program as their collateral.
0:31:14 Okay. So this is one of the many reasons, right? Hearing facts like this, where I’m like,
0:31:21 this is a trap. Like if I enter into the labyrinth, there’s a reason why these are so profitable for
0:31:27 these companies. And it’s not because the person collecting the miles automatically wins, right? It can’t
0:31:31 be. No. That’s the losing end of the trade for most people.
0:31:35 They’re hoping for breakage. They’re hoping you were, you get all these miles, you never use them.
0:31:39 And I think that original models were 60% would get used.
0:31:46 Or you let them expire as I did in one case, right? Where hilariously, I think I forwarded it to you.
0:31:54 I got an email from Marriott Bonvoy saying, your points are going to expire. And then it gave a date
0:32:01 that was months in the past. That was my alert email. I was like, well, chronologically, unless
0:32:05 you guys have figured out time travel, because I haven’t, it seems like I should have received this
0:32:06 prior to my points expiring.
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0:33:29 So Chris, what would you suggest we do in terms of exploring what I should do with my points? And we’re
0:33:34 always going to bring this back to what people can use. I think people will pick up a lot. We can also
0:33:40 sprinkle in some crazy point stories, but I think we’ve given enough of a taste of that that we can
0:33:46 kind of look at the actual nuts and bolts of like, what do you do? I’m looking at this printout and I’m like,
0:33:50 it makes my head hurt just to look at all these airlines with all the points.
0:33:54 So we’ll break the landscape into… There’s two obvious buckets that people are going to be
0:33:59 familiar with. You have airline miles that are linked to a program. So you have some Alaska,
0:34:07 some American, some Delta, and some United. Four major US carriers. You’ve got hotel points. I’m not
0:34:12 going to tell you what to do with yours because they all expired. And then you have bank points,
0:34:18 and I’m going to call them transferable points. And the thing that I really like about transferable
0:34:24 points just to set the difference in people’s mind and why the kind of street value is higher
0:34:28 is that American Express… And let me pause for a second just to say by bank.
0:34:34 American Express, Capital One, Citibank, Wells Fargo now, Chase. Amex will let you move your
0:34:40 points to 18 different airlines. So you can move your Amex points to Delta. You can move them to Air
0:34:46 France. You can move them to Air Canada. And so the reason why people love them is when we go back to
0:34:51 these tools and you’re searching, gosh, I want to find a good deal to Europe. Well, sometimes that good
0:34:57 deal might be a deal with Air France. Sometimes that good deal might be a deal on United, but it’s even
0:35:03 better deal if you book it through Air Canada, which is a partner of United. And so when you have the
0:35:08 flexibility to take your points and put them anywhere, not anywhere, but to 18 different airlines or five
0:35:14 different hotel programs, it just increases the likelihood that you will find a good deal. So I love
0:35:19 accumulating transferable points because it just spreads out the surface area of places you can find
0:35:26 deals. That said, the best value that anyone’s going to find from their points and miles is on this kind of
0:35:34 aspirational travel, meaning long haul, international business and first class, luxurious five star hotels and
0:35:43 resorts. Because airlines, while this is a shift, they haven’t fully shifted to the point that a business class
0:35:50 ticket might cost 10 times the dollars, but it might only cost two times the points. And a really nice luxury
0:35:56 resort might be 10 times the cost of, you know, the holiday in downtown, but it might only be
0:36:00 Right. If you’re paying in dollars, three or four times the cost in the number of points you’d need.
0:36:04 And so that’s where you’re going to get the most value. That doesn’t mean that if you’re someone
0:36:10 who’s only traveling domestically, you can’t find good value because there are a lot of cases where,
0:36:14 you know, you’re flying between small airports, you’re flying during the holidays, you’re flying
0:36:20 last minute, and you’ll see a flight where it’s just astronomically expensive for what it should be.
0:36:22 And it’s a great deal with points.
0:36:28 I’m realizing, I guess, a couple of things that I’ll throw out there to act as a stand-in for some
0:36:33 listeners, right? So number one is that, and I want you to poke holes in this, or it can just be
0:36:40 fodder for conversation because I’m realizing that our conversation is always, meaning the last handful
0:36:46 focused on what the hell should I do with all these points, staring at this just makes me feel like a
0:36:50 sucker playing a sucker’s game or someone with undone homework, and they expire, right? Which is
0:36:57 ridiculous because it’s engineered. Some of them expire. But I’ve realized that there’s how to use
0:37:03 the miles, and then there’s how to accumulate them. Now, I have not focused on the accumulate because
0:37:09 by and large, they seem like games I don’t want to play. And I think what’s going to be in the mind of a lot of
0:37:16 folks, certainly, why haven’t I done this to date? Time. So the Amex is, let’s just say using the Amex on
0:37:27 Amazon, it might be a bad trade on the value per point if I assume my time is worth $0. But if it
0:37:33 takes me an hour to do something, to get a bunch of stuff organized, to find a better value per point,
0:37:40 it could be a Faustian bargain if my sort of value of time per hour is high enough. So that’s always
0:37:47 been sort of the crux of the challenge for me. And also, I should say just for people listening, we can
0:37:54 assume that my hotel points are usable, even though they’ve expired, if that is in any way informative to
0:38:00 the conversation. And also, I just want to explain one of the motivations for reaching out to you was
0:38:08 not just how do I use these points, but is there anything crazy I could do with these points? And
0:38:13 I’m not convinced there is. And there may be things that I can do that seem crazy that are just a poor
0:38:19 use of points. But I was like, okay, I realize I could use some of this for travel, but I can also
0:38:24 afford to pay for travel, which doesn’t mean I should pay dollars instead of points if I’m just
0:38:33 looking at the value per point. But is there something big and nutty I could do? Like one trip
0:38:44 where I just blow all of these points? Let’s start there because I think the reason why the points game
0:38:52 is exciting in the first place is that it feels like it’s free. Now, I could poke a hole in that and
0:38:58 say, if you just used a cashback card the entire time, instead of having 12 million points, you
0:39:03 probably would have been sitting on $300,000, depending on the card you were using. And if
0:39:09 someone had done that, they would probably feel very differently about taking $300,000 they’ve saved
0:39:16 and blowing it with no regard. Whereas if they had 12 million points that in their mind could not fund
0:39:23 their kids’ education, pay their mortgage, et cetera, why not blow it on some wild vacation or something
0:39:28 else? So there’s this psychological element of I’ve earned these things. They are not dollars.
0:39:35 Why not spend them flying Emirates first class, taking a shower in the sky, eating caviar and sipping
0:39:41 champagne? Like why not do that? Because it’s not like I’m dipping into my kid’s college fund where
0:39:44 it might feel differently if they had earned cash back the whole time.
0:39:49 Oh, it would feel totally differently. I wouldn’t even do it necessarily. But those points are so
0:39:56 constrained that it’s like, okay, if the only place that I can use these is in say travel, it’s like,
0:40:03 well, they either never get used or they get used, but I can’t apply them to paying off my mortgage or
0:40:05 paying for my kids’ college tuition. So YOLO.
0:40:10 Now I would say in the case of Amex, if you were like, my time’s too valuable to play this stupid
0:40:17 game, I would say two things you could do. One, tell yourself or whoever books your travel to just
0:40:21 book the travel using the points instead of using the dollars. And it’s not going to take any more work
0:40:28 to go on Amex’s site and say, New York to LA, business class flight on United, book, check out,
0:40:33 pay with points instead of dollars. And you’d at least get your one cent. You could open up a
0:40:39 brokerage account at Schwab or Morgan Stanley and open up one card that’s the Morgan Stanley or the
0:40:42 Schwab Amex. You could just transfer all your points to your brokerage account.
0:40:43 What does that do?
0:40:48 Just turns it into dollars, depending on the card, what the rate is between 0.8 and 1.1 cents. But
0:40:56 there is a way that’s better than Amazon to just dump them into a bank account where you don’t have
0:41:02 to think about it and you just have the money. So I will say that is an option. And for people for whom
0:41:08 that feels like the better path, I would argue that they’d probably have been better off from the start
0:41:18 just using a cashback card and getting 2.625%, which I think is like a good target cashback and never
0:41:23 having thought twice about points at all. What’s your current favorite cashback card if you had to
0:41:23 pick one?
0:41:32 So US Bank launched this amazing 4% card. You had to put $100,000 in a brokerage account. And then they
0:41:40 were like, oh, wow, this isn’t profitable. The amount of money that issuers get from swiping cards
0:41:46 is not 4%. It’s not even 4% before you pull the margin out for everyone along the way. That’s gone.
0:41:53 Robinhood has a card that’s 3%. But if you start putting too many business transactions on there,
0:42:00 they have problems. The most scalable platform that I’m aware of for earning cashback at scale
0:42:07 is the Bank of America, I’d say platform. If you have $100,000 with Bank of America or an Ameril Lynch
0:42:16 brokerage account, you effectively can earn 2.625% cashback on everything with their unlimited card,
0:42:21 their travel rewards card, their premium rewards card. And if you have the premium rewards,
0:42:26 premium rewards elite cards, it bumps up travel and dining spend to 3.5%.
0:42:32 So everything you spend on travel and dining, 3.5% back. Everything else, 2.625% back.
0:42:38 Obviously, that assumes that you have the ability to put $100,000 in a brokerage account. You can just
0:42:44 invest it in US treasuries. You can move over a Roth IRA. You don’t have to have some Merrill Lynch
0:42:51 broker manage your portfolio. But I would say that is the most scalable thing. I know people with large
0:42:56 limits can spend lots of money don’t have cards, you know, held up and transactions not post and
0:43:02 points disappear. That I think is a solution. If you want something even easier, Fidelity has like
0:43:09 a 2% cashback card. So if you’re not earning 2% back on everything, I would say you’re missing out.
0:43:15 Everyone, I think if you want the simplest solution for everyone, you should say, am I at all flexible
0:43:21 enough that I’ll be able to get good use out of these points? And by flexible, that doesn’t mean
0:43:27 like I’m flexible in every vertical, right? Like you could be flexible that you could book a trip
0:43:31 last minute. You could be flexible that you have to plan it super far in advance. You can be flexible
0:43:37 with the destination, but not the dates. You could be flexible with what route you take, whether you
0:43:42 go nonstop or not. So I’d say if you have any amount of flexibility, I think you could get a ton
0:43:47 of value. And these tools have made it so much easier. Like five years ago, I’d say, you know,
0:43:53 it’s tough. Now I’d say, if you were like, I want to go to Europe this summer, we want to book it more
0:43:59 than a month out. And we’re kind of flexible where we go. You can get incredible value that will make
0:44:04 a cashback card look like a poor return. But if every time you travel, you’re like, I want to fly on this
0:44:08 date. I don’t want to change planes and I want to go to this city and I want to book it three months
0:44:12 out. I don’t want to have to think about it after that. You probably would be better off doing cash
0:44:20 back the whole time. Okay. So let’s talk about what I should do with this printout that I’m looking at.
0:44:25 It’s not actually what I’ll do with the printout, but what it represents, which is these various points
0:44:30 that are scattered across however many. Recognizing that Amex is kind of the 800-pound gorilla,
0:44:36 right? That’s where the vast majority are sitting. After looking at my full picture,
0:44:40 we’ll talk about, I guess, a couple of things, right? So for people wondering, we’re going to
0:44:46 talk about like, what might I do with all this? What do the options look like that pass the sniff test
0:44:54 by Chris? And then understanding my psychological profiling. And then also, if it could be done again,
0:45:00 what should I have done? Right? So why don’t you take us into the land of what might be done with
0:45:06 this stuff and the easiest way to do it? So I looked at all the points and I would say,
0:45:11 if we focus just on the Amex points, it’s the bulk of everything. It’s a little bit easier to tell a
0:45:16 story. You got 12 million Amex points. The easiest thing, you could spend them on Amazon. They’d be worth
0:45:23 $85,000. You could just book flights. They’d be worth $120,000. Can you just repeat this again?
0:45:25 All right. Use them on Amazon. $85,000.
0:45:28 $12,085K. All right. Got it.
0:45:30 I don’t think you should, by the way. Yeah, no.
0:45:36 You could book travel in the portal or transfer them to bank and brokerage accounts. It’d be around
0:45:42 $120,000. Just book flights. No problem. If, and I think you do have an Amex business platinum,
0:45:49 right? You could just book your flights with points in the travel portal. You’re capped at how much you
0:45:56 can do a year. But if every year you used up to 2.85 million, which would take you about five and a half,
0:46:07 six years, you’d get $187,000. So more than the $120,000, right? And then if you transferred them
0:46:15 and booked aspirational things with airlines on long haul international, I think you could get
0:46:20 reasonably $250,000 to $600,000 of value. Okay.
0:46:26 So that’s the range. But what should Tim do? Let’s come back to that. So on the low end,
0:46:31 we have use the Amex points on Amazon, right? Because my credit card’s already attached. It’s
0:46:40 one click for a checkbox. It’s very easy. That’s taking 12 million plus points and converting it into
0:46:47 $85,000, roughly a value, right? Now on the very high end, long haul international, we’ve got 600K.
0:46:50 Or more. I did some quick math just for fun. And I said,
0:46:53 hey, what are some things I’ve done? Right? I just looked.
0:46:54 Yeah, great.
0:47:00 We’ve been to the Conrad, which is a chain within Hilton, the Conrad Bora Bora. An amazing property.
0:47:06 We’ve been twice now. We’re about to go to the new Waldorf Astoria in Costa Rica.
0:47:10 So I looked at those two properties. They have tons of availability using Hilton points.
0:47:16 Amex transfers from Hilton one to two. So you’d actually end up with 24 million Hilton points.
0:47:20 It would be about 200 nights. So if we’re talking like extreme, what you could do,
0:47:26 you could transfer all those points over and book 200 nights at a hotel that would normally be $1,500
0:47:32 to $2,000 a night. Just to give people’s mind, 12 million, what does that mean? Could be 200
0:47:39 nights at like an incredibly high end, beautiful resort. Like if you wanted to take international
0:47:45 long haul, like flights to Japan and Europe in business and first class at redemption values,
0:47:52 I’ve gotten multiple times, not like once in a lifetime, it’d be somewhere between like 130 and
0:48:02 150 one-way flights. So let’s call it 65 to 75 round trip flights in business class over an ocean.
0:48:07 Observation question. So observation, I had this like Shawshank Redemption fantasy of sorts,
0:48:14 to be clear, towards the very end of the movie on the beach. And I was thinking, so one reasonably
0:48:21 absurd thing that I could do would be like a 200 night writer retreat to Bora Bora. I might end up more
0:48:27 like Tom Hanks in Castaway. That’d be my fear. But at this crazy, crazy hotel, that’d be one option.
0:48:33 If I just wanted to YOLO burn the whole thing. The other, I would imagine, tell me if I’m running up against
0:48:41 restrictions here, but it’s like, if I wanted to take, you said 150 flights, let’s just call it 150 one-way
0:48:45 flights to say like Japan, something like that.
0:48:46 Sure. Yeah.
0:48:52 Okay. Now I guess there are, I’m going to run up against the monthly limits here, but would there be a way for me to
0:48:57 do one flight to Japan with 150 people, myself included?
0:49:04 Let’s address the biggest challenge with getting the most out of these points is airlines do not
0:49:11 release every seat available for use with points. And when they do, sometimes they release them at
0:49:18 tiered pricing. So there might be two seats available for 80,000 points. And then the next two are 300,000.
0:49:29 So as an example, this trip we’re taking to Japan next year, Japan Airlines releases two seats on every
0:49:35 flight when they open the calendar at like 360 days. So even knowing everything I know about the system,
0:49:41 the most optimal place to put the points to get the deal, we still booked two seats from SFO to Narita and
0:49:48 two seats from SFO to Narita. So my wife and I are each taking one kid. And then we set some alerts.
0:49:53 So over the next year, if two seats open on either of those flights, we’ll log in and change them. Like
0:50:00 the change fee might be $25 on the airline we booked, but we couldn’t even get four seats on the same flight
0:50:04 playing the game as optimally as we wanted. So the idea that you would get 150 seats.
0:50:08 stands right now, it’s you and one kid and your wife and one kid on two separate flights.
0:50:15 Exactly. Now, I would say I probably have 80% confidence that by the time we take off,
0:50:20 we’re all going to be in business class on one flight. I’m about 80% confident.
0:50:21 Yeah. Okay.
0:50:26 So a general rule here, which I’m just going to give, that’ll be probably pretty helpful to anyone
0:50:31 trying to get the most value out of their points, is the way I would say people that play the game at
0:50:37 my level do it, is even if you know these dates, no flexibility. One of the great things about
0:50:43 points is depending on the program, you can book a flight with points and cancel it for no penalty.
0:50:49 Maybe you pay a $12 fee, a $25, a $50 fee. Depending on the airline, there are different rules. And I
0:50:54 would encourage you to just search award cancellation rules by airline and you’ll find a list.
0:51:01 So what I will often do is say, look, we really want to go to destination X. And obviously, we’d love
0:51:08 nonstop long haul business class. That’s the target. But I don’t see that now. So let me use some of my
0:51:14 points to book a long haul premium economy flight. And then I will use these tools, award tool, points,
0:51:19 yeah. Seats.arrow is another one if you’re like a spreadsheet nerd. It’s like a little bit more
0:51:25 database than user friendly, but it’s really powerful. And I’ll set an alert and say, if two
0:51:31 seats open up in business class on the direct flight or four seats, send me an alert. And then
0:51:36 I’ll go book that and cancel the other one. And maybe I have to pay the $12 fee. And so the way most people
0:51:44 I know do this is they book something that’s good enough, but not optimal, set an alert, and almost
0:51:50 always end up with something better. To the point that we’ve been at the airport, like check in four
0:51:57 hours before our flight from Paris to London back to San Francisco, alert pops up immediately four
0:52:04 hours before departure, cancel that flight, book another flight that’s Paris direct. Now you might
0:52:10 not like that last minute. I don’t know exactly if I’m going to take the flight I planned on, but within
0:52:15 two weeks of departure, all kinds of stuff happens. You can get on Lufthansa first class, you can get
0:52:21 on direct flights. So I would say book something that’s good enough. Points are often refundable and
0:52:26 make it really easy to have speculative bookings. And then you get on something that said, you’re never
0:52:33 gonna get 150 seats on the plane. So, you know, the best version of that would be pick a day and buy
0:52:38 tickets for 150 friends to go somewhere, but no one’s really going to be going to the same place.
0:52:44 Asia. We’ll meet up in Tokyo. We’re all flying to Asia. Ooh, Laos. Sorry, pal. You’re gonna figure
0:52:53 it out. So it seems like then for the bulk of my points that are on Amex, long haul, I could go to
0:53:01 the Amex website, see if I can use points for my already pending international travel, right? Or whatever
0:53:06 type of travel I might want to add in to use points. Although I think I’m at this point kind
0:53:14 of disinclined to do that. My sequence would be find something like award tool and say, I’m going on
0:53:19 this trip. Let me search it on award tool. Can I use my points? Because chances are you’re going to get
0:53:26 two to five cents per point on a good award redemption. Nothing on award tool or any of the
0:53:30 tools you end up liking. Nothing on award tool. Great. I’m going to go to the Amex travel portal and
0:53:36 I will book it with my points. Because you have an Amex business platinum, if you’re booking it in
0:53:42 business class or with whichever single airline you choose, like Amex lets you pick one airline for your
0:53:48 annual airline credits, whichever one you pick, you can book an economy also. You book it with points.
0:53:53 They’ll give you 35% of the points you spend back as a refund. It’s a perk of the business platinum card
0:54:01 and you’ll effectively get 1.54 cents per point. So I would tell you, my guess is that if you’re not
0:54:10 that flexible with your travel, that you will one in probably somewhere between five and 10 times,
0:54:16 find a great deal with your points. And the other four out of five, nine out of 10 times,
0:54:21 you won’t. And then over the long haul, you’ll get a blended rate of your points of probably like
0:54:28 somewhere between like 1.7 and two cents. Cause that one time you might get five cents. And then
0:54:32 the other times you’ll get one and a half cents. And over the course of the next five years, you’ll
0:54:36 burn through all your points. You’ll get twice to three times as much value as you would have using
0:54:41 Amazon. And hopefully whoever’s helping manage your travel could just like have this principle of
0:54:45 search for points. Don’t find it. Use points on Amex. Doesn’t work. Pay cash.
0:54:52 And also I should point out to folks a few things. Number one, that I do have people who help with
0:54:58 travel. So I could very easily have an assistant do this. And I have still do for people wondering,
0:55:05 you know, virtual assistants in the Philippines and so on, that this is going to become very different.
0:55:10 I would say even in the next 12 months, right? I’ve already invested in companies that are applying
0:55:19 AI specifically to the travel vertical. Most people will be able to use AI agents of some type for a lot
0:55:23 of this stuff. I would have to imagine within the next two years, it could come a lot faster.
0:55:31 So having an idea of the process, I think will prove very helpful. So we got a word tool, Amex. So here
0:55:38 are my two questions. I’ve got points on Alaska, American Airlines, Delta, Emirates, TAP, Portugal,
0:55:47 etc. Is there an easy way for me to just use those for anything? Like zero those out? What is the
0:55:54 lowest, lightest lift? I guess low makes it a harder lift, but you get the idea. Lightest lift
0:55:59 in terms of using those? Or is it, you know what? Like, hey, look, you’re never going to use those
0:56:07 for anything. Just accept that those are basically sunk costs. They’re trying to pull you into the
0:56:12 game of accumulating points. And you, Tim Ferriss, don’t need to think about it. Or is there a tool
0:56:17 where it’s just like, hey, I’m never going to use these for anything. If I can just trade them in for
0:56:21 a fucking box of chocolates and it only takes me 60 seconds, I’ll take the box of chocolates.
0:56:22 Is there anything to be done with these?
0:56:28 I would say the same principle applies, right? If you look at United, you have United, Delta,
0:56:32 American, American and Alaska are both part of the One World Alliance. Delta is part of the Sky Team
0:56:38 Alliance and United is part of the Star Alliance. Those cover almost, I don’t know if I had to guess,
0:56:43 like 90% of all long haul flights you would ever take in your life. And so if whoever’s looking to
0:56:49 book your travel, you’re like, oh, you want to go to Japan? Way better than any other redemption is
0:56:54 just, okay, well, United flies nonstop to Japan, depending on what city you’re in. So does Delta and
0:57:01 American, you’re going to get at least probably one cent of value from each of those points,
0:57:06 even if you book it unoptimally. United, a great deal to Japan might be 80,000 points,
0:57:13 but you might also find it for 200,000. But if 200,000 points saves you $8,000, like could you do
0:57:18 better? Yeah. But I’d rather use that, do that five times, save 40 grand or something, you know,
0:57:26 like it’s still a good deal. So the same rule applies, which is, I would say when you’re booking
0:57:32 a trip, go through that same sequence, a lot of these tools, like award tool, will show you United,
0:57:36 will show you Delta and American. They’re not just showing you what you can do with your Amex points.
0:57:42 And I would say with the caveat that because there’s no good alternative, right? With Amex,
0:57:48 you can always use those points to just book any flight on any airline at least one cent.
0:57:54 So like there’s no point in cashing them out for a box of chocolates. On United, you can only use
0:58:00 them to book, you know, United and their partners flights. But the flip side is that there is always
0:58:06 a price. Even if there are one last seat, they will still sell it to you with points. It might be a lot
0:58:12 of points, but you could still use it for that flight. And so I would be blown away if over the next three
0:58:19 years, you don’t take at least one flight that is on each of those airlines or their partner.
0:58:19 Oh, for sure.
0:58:25 And so the good news is with United, if you want to book five seats in business class to Japan,
0:58:28 it’s going to be easier to find five seats. It’s not going to be as good of a deal.
0:58:33 But you know what? If otherwise you’re not going to use them, why not?
0:58:37 Yeah. Also deal. There’s like the micro deal and then the macro deal.
0:58:42 Sometimes it just feels good to take a free trip. Who cares if it was a good deal? You went on a trip,
0:58:42 you weren’t going to take otherwise.
0:58:47 If it’s a good deal because you have five people flying to the same destination and you know it’s
0:58:51 guaranteed versus like we’re going to be scattered to the wind and then have to find one another
0:58:56 like Lord of the Rings or something, then fantastic. Psychologically, that’s also a good deal.
0:59:05 Are there any options? And I think the answer is no, but outside of travel that are interesting
0:59:10 in terms of using points. Like let’s just say hypothetically, I was like, you know what?
0:59:15 Decided I’m going to stay in the US for the next three years. And maybe I’ll stay in Austin for the
0:59:22 next three years straight. I’m tired of traveling. Are there any uses of these points? What are the
0:59:26 best options of the worst options? If it might be the way to word it.
0:59:30 I just looked and they shut down. And so I don’t know if there’s going to be an alternative,
0:59:39 but there is a company that used to exist called miles for migrants that basically you hand over
0:59:43 your miles and they help like refugees relocate around the world using your miles.
0:59:44 Okay. That’s interesting.
0:59:50 It looks like they have a, it’s with sad hearts. We share this news. So there might be some ways to
0:59:53 use them for like someone else, something like that.
0:59:54 Yeah. That’s interesting.
0:59:59 That’s one, it’s a very charitable cause. It provides no value to you. I don’t even think
1:00:03 you get the tax write-off, but you’re helping people relocate with miles you don’t need.
1:00:07 But here’s the thing, like I donate a lot of my stuff because if I go and I look at my,
1:00:11 you and I both know I have no fashion sense. So it’s like, if I go upstairs and I’ve got a lot
1:00:17 of extra clothing, I’m like from one to 10, how much value am I driving from like this shirt?
1:00:22 It’s kind of a very left-brained Tim Murray condo version. So instead of sparking joy,
1:00:25 I’m just like from one to 10, how much value am I getting out of the shirt?
1:00:29 Haven’t worn it in four months. That’s like a one or a two, a max. If I gave this to Goodwill,
1:00:33 somebody would get like a seven or eight or more out of it if they really need it, maybe a 10.
1:00:40 Like that’s just a better use of this thing, like in the world. So for me, I could see actually
1:00:42 doing something like that with points.
1:00:48 If you found a charity that you cared about and said, Hey, I’ve got all these points. Can I just
1:00:53 help you out? There’s a listener of our podcast and he reached out to me and we talked and he runs a few
1:00:58 shelters around the world for women that are suffering from domestic violence and all kinds of stuff and
1:01:04 human trafficking. And he’s like, I use all my points just for the business. Like all the points
1:01:10 his company earns, he uses to book trips for people, for refugees, all this kind of stuff who have a lot
1:01:15 more flexibility. So there’s a way that I’m sure someone listening could reach out and be like,
1:01:18 Hey, we could help put these to use if you don’t want them.
1:01:20 I’m going to get so many fake.
1:01:22 Oh, for sure.
1:01:25 Scammers asking for points, but yes.
1:01:26 Tim, give me your points.
1:01:32 But I would say the easier solution is just decide where you want to give, give with your dollars.
1:01:36 And whenever you’re taking a trip, tell whoever’s booking your travel. And this applies to anyone
1:01:40 listening. Just go look. What would it cost on United? Let’s just book it with United this time.
1:01:46 And it’s often great deals. Like we’re going to Cabo and it was a great deal to use points,
1:01:50 especially because we weren’t sure which day we wanted to come back. So we just booked it for both
1:01:56 days and you can cancel with no penalty. So even if it’s not a great deal, just start cranking through
1:02:01 them. You don’t have any, but just in case anyone’s in Austin, one of the best uses of chase points
1:02:07 is transferring them to Hyatt because Hyatt just is one of the hotel groups that just continues to
1:02:13 deliver great value. And there’s like a Miraval wellness resort right outside of Austin.
1:02:17 It’s like all inclusive and you can use your Hyatt points there. You don’t have anything that would
1:02:23 get you Hyatt points. So it’s not relevant to you, but you know, there are a lot of domestic ways that
1:02:28 you could use your points, even if you’re not leaving the U S. So let’s look at a situation
1:02:33 on my spreadsheet here, which is, and let’s pretend the numbers are bigger than they are.
1:02:39 So I have points on Emirates skywards and I have points on tap air Portugal. The numbers are not as
1:02:47 big as the other airlines, but let’s pretend that these were more miles because I’m bringing these up
1:02:54 as you can guess, because they’re both expiring this year. What can people do if they’re like,
1:03:02 oh shit, I’ve got three to six months, maybe it’s a year before these things expire. I do not
1:03:09 have any need, maybe no desire to take like an emergency trip to fill in the blank location.
1:03:14 Is there anything to be done or is it just like, ah, you son of a bitch. You got me.
1:03:19 There’s multiple things. So most of the programs in the U S now don’t expire. If you have the credit
1:03:23 card with a company you earn points in, usually the credit card points don’t expire, but a lot of
1:03:29 programs do. And I’d say there’s two versions of expiration. There’s a couple airlines, Japan
1:03:34 airlines, ANA, where it’s truly like three years and they’re gone, nothing you can do. And then there
1:03:39 are a bunch where it’s like, I think American airlines, if you have no activity for two years,
1:03:46 they expire. And so in the case of airlines, where if there’s no activity, they expire.
1:03:50 Loyalty rewards. Sometimes the stick is better than the carrot.
1:03:56 I have in the past with American, I’ve donated a thousand miles. That’s activity that kicks you
1:04:00 another two years down the road. You can buy a magazine with your miles, kick the can two years
1:04:05 down the road. Emirates, for example, lets you transfer your Emirates points to Marriott.
1:04:09 So funny enough, it’s like, you’ve got Marriott points, they need some activity or they’re going
1:04:13 to expire. You have Emirates points. Maybe you could transfer all your Emirates points to Marriott,
1:04:18 which you’re probably more likely to find a hotel that you could use to book with Marriott points
1:04:26 and cash out your Emirates balance. With Tap Air Portugal, you’ve got an orphaned 6,500 miles,
1:04:33 probably not even enough to book really anything. I honestly wouldn’t feel too guilty just letting
1:04:40 them expire. The thing that I would note in the future for someone listening is Tap Air Portugal
1:04:47 is a part of, I believe it’s Star Alliance. Yeah, Star Alliance. Whenever you fly on Tap,
1:04:52 you should just put in your United number, right? Try not to overcomplicate things. You’re flying on
1:04:58 Air France, put in your Delta number. Do I think Delta points are the best ever? No. And if you want to
1:05:04 play this game at a crazy level and have six-figure balances and 25 airlines, great. But when you’re
1:05:12 getting started, if you have Delta, American, or Alaska, and United, any foreign flights, credit there.
1:05:16 And then you don’t have to worry about having these little balances all over the world in random
1:05:18 airlines. Yeah, that’s a good point.
1:05:26 But at 6,000 points, I don’t care. At Emirates, if you thought one day you’d use them, great.
1:05:31 Otherwise, I’d transfer them to Marriott. I will say there’s a strange reason why I ended up with
1:05:38 25,000 Aegean air miles, which is a Greek airline part of Star Alliance. And I was like, what do I do
1:05:43 with these miles? I’m not going to go to Greece. But Aegean Airlines is part of Star Alliance. So I just
1:05:49 use them to book a flight from San Francisco to Denver on United. Now, 6,000 is not enough to do that.
1:05:53 So I wouldn’t even worry about it. But if you had… And Emirates is not part of
1:06:00 any of the major alliances. They have some partners. But because they have the escape valve of transferring
1:06:04 them to Marriott, I would just be done. But if you had some Air France miles, you could probably use
1:06:09 them even if you weren’t going to France to book a Delta flight. Or if you had British Airways to book
1:06:14 an American flight or something like that. That makes a whole lot of sense. All right. Where should we go
1:06:19 from here? I mean, I’m tempted to sprinkle in some crazy point stories, but we could all
1:06:26 also go somewhere else, right? Because it seems like the answer is use these for flights that are
1:06:31 coming up. They don’t expire. There’s definitely part of me that’s like, God, it’s just, it’s not
1:06:38 very inspiring. But I certainly could do it. That’s the best value per point is to use a word tool.
1:06:44 And then if that fails, Amex travel portal. What if we did it this way? I said the best deals are with
1:06:51 the ultimate flexibility. So you could say, hey, just blow my mind. Make me feel like I got so much
1:06:58 value out of this. What could we do? What could we do that’s really awesome? Block off a week and say,
1:07:02 this week, I’m just going to blow it out of the water and I’m going to do something awesome.
1:07:04 And I don’t know what that’s going to be. I don’t know where it’s going to be.
1:07:10 And you go to one of these tools and you say, where can I go this week? And I think you could
1:07:16 have a good time anywhere. So for example, seats.aero, one of the cool things they have is they have this
1:07:23 tool that’s like the ANA first class finder and the Lufthansa first class and the JAL first class finder.
1:07:29 So you could say Lufthansa first class. Well, for anyone who’s interested, the San Francisco to
1:07:36 Frankfurt flight today, you can book using United miles in first class for 165,000 points.
1:07:41 Now, one of the best things about Lufthansa first class, and I’ve not been able to fly it,
1:07:45 is that in Frankfurt, they have their own private first class terminal. It’s separate from the other
1:07:50 terminal. It’s known for if you go take a bath there, they give you these rubber ducks that you
1:07:55 can post on the internet to show people that you flew first class on Lufthansa. But you could
1:08:01 basically just schedule a, I’m going to take an amazing trip. I’m going to go somewhere awesome
1:08:08 and just see where that leads you. And so we’ve done this a handful of times. And we ended up at this
1:08:16 amazing resort in Mallorca last year called Cap Rocat. It’s a small luxury hotel of the world. It’s built
1:08:21 in an old fortress. If you just search for it, you’re like, wow, it looks beautiful. If you want
1:08:26 to go in the summer, it’s like 2,000 to 5,000 points a night. And we’re like, wow, Hilton has
1:08:32 five nights here. We had five free Hilton night certificates. We found some points to get ourselves
1:08:37 to Europe. I think one interesting thing for people to consider, we live in the Bay Area. We wanted to go
1:08:43 to Mallorca. If you just search for a flight from San Francisco to Mallorca, it’s going to be a lot
1:08:48 harder to find a good deal. So instead, we searched for San Francisco to Europe. We ended up getting a
1:08:55 flight to Paris. And then we just bought a $79 ticket from Paris to Mallorca. And so consider the fact
1:09:00 that you could buy really cheap flights at the beginning or end of your trip. And your points
1:09:05 are going to get you on these long haul routes. So we ended up having like a $20,000 vacation.
1:09:09 We didn’t even realize when we booked it that we were flying to Paris during the Olympics.
1:09:14 So we ended up staying there for two days and going to the Olympics. And we did the whole thing
1:09:22 on points. It was like $20,000 saved, not $20,000 of value because it was like actually saved over if
1:09:27 we had paid cash. So it was amazing. Yeah. All right. I like that idea.
1:09:33 I would challenge, give me a week of your time and I will come back with a, Tim is going to this place
1:09:41 in this amazing deal. And, you know, he’s going to stay at this incredible property and just unwind for a week
1:09:45 and explore whatever part of the world we send him to.
1:09:47 That kind of thing.
1:09:52 Sierra Leone, Four Seasons. Here I come. So what was the name of that place?
1:09:53 Cap-Rocat.
1:09:54 Cap-Rocat.
1:09:55 Beautiful hotel.
1:09:58 Sounds like a Russian prison drug. I like it.
1:10:03 I don’t know what Mallorca is like in October, but right now you can go for a week or two in
1:10:08 October. Obviously, I know summer is probably the prime time, but I think when you start to look at
1:10:13 shoulder seasons and last minute stuff, you could just get crazy, crazy deals.
1:10:18 Shoulder seasons means right outside of the prime season, like to either side of it.
1:10:25 Yeah. So we’re going to Costa Rica in June, which is not, you know, the height of rainy season, but it’s
1:10:31 certainly not like the most perfect time to go to Costa Rica. And it’s not necessary. I think we’re
1:10:36 going to hit Japan. You know, obviously cherry blossom season is flexible, but like, I think we’re going to
1:10:43 hit Japan in prime time next year. And so you don’t have to wait for shoulder season, but there’s just so
1:10:48 many better options. I think we mentioned all these tools before, but when it comes to hotels,
1:10:53 a lot of these tools also have the same thing for hotels. So you can go switch from the flight page
1:10:59 to the hotel page. Seats.arrow has a sister site called Rooms.arrow. And you can literally be like,
1:11:05 find me a small luxury hotel in the world that has five nights available June 25th. Where am I going?
1:11:12 Now, is the dot arrow like a wink, wink insider thing in the travel world? Or is that just an indication
1:11:17 of the person who made this spreadsheet heavy website is the same person who should not be in charge of
1:11:24 branding? I know the guy behind it’s an engineer. And I think it was like, what’d be a cool, easy name?
1:11:32 Seats.arrow. Okay. Easy domain, short word. Arrow spelled like an arrow. A-R-R-O. Oh, sorry. A-E-R-O.
1:11:41 Seats.arrow. Oh, Jesus. See, there’s the problem. There’s the problem. I got it. Dot arrow. A-E-R-O.
1:11:46 So I am absolutely not the only person who immediately went to arrow. A-R-R-O.
1:11:53 I’m very glad we clarified that. Show notes would have been messy. Okay. So I want to explore a
1:11:59 couple of things. Number one is points gone wrong. In other words, where you did something and you’re
1:12:05 like, fucking A, that was just such a waste of life energy, right? There must be some examples of where
1:12:10 this didn’t work out, right? Or where you had a practice and you were like, at the end of the day,
1:12:17 isn’t worth it. Now, I have to bust your balls about this because it’s just so funny. I’ve heard
1:12:22 you tell stories of comparison shopping for fruit at the grocery store where you will drive from
1:12:26 one grocery store to another to save something like, correct me if I’m getting this wrong,
1:12:33 but like two or three bucks on berries, something like that. But I’m wondering even for you, if there’s
1:12:39 been an example where there’s like a practice or an attempt and you’re like, okay, that really didn’t
1:12:46 work out. That was just way more headache or way more time than ended up being worth it, right? The
1:12:50 juice wasn’t worth the squeeze. How often do you feel that way? And can you give an example?
1:12:55 I think the, I don’t know, I’ll call it the optimizer’s curse, but like that is the challenge
1:13:02 that I have learned to get better at over the last year or two or three, which is take the berries
1:13:09 example. I think I’m probably more likely to like look online, be like, should I order my groceries from
1:13:14 Amazon Fresh or Whole Foods? And like, which one’s cheaper than necessarily drive store to store?
1:13:21 But I’ll credit Ramit Sethi for these money rules where it’s like, okay, for groceries, we stop caring. Like it
1:13:28 doesn’t matter. Now, does that mean that when I go to Costco to buy berries and I might see like blueberries
1:13:34 are like twice the normal price, maybe we just buy strawberries instead, you know? And we don’t like, I’m not
1:13:39 going to not buy berries if they’re expensive, but I might pick the berry that’s the better deal this week.
1:13:45 But I’m not going to not do it and I’m not going to drive to another grocery store to get $15,000 worth
1:13:50 of gold bars with my, with my parking basement strawberries.
1:13:56 The transaction would be $15,000 in like 12 or $15,014. But I’ve had to get a lot better at this
1:14:02 because there are times where I could spend three hours trying to find a flight deal and like figure
1:14:07 out the most optimal way to do it only to be like, oh, we’re not even going to take this trip. You know,
1:14:12 like my wife sometimes asked me, she’s like, I was like, Hey, which flight should we take for this
1:14:17 trip? And then she’s like, I’m okay answering that question, but why do I have a 47 row spreadsheet
1:14:24 as like the source of this information? And so for me, part of it is sport. Like we talked about,
1:14:29 part of it is figuring out like, at what level do we stop caring? So it’s like when I was early to this
1:14:32 game, it’s like, if I’m going to save $20, I’ll stop caring. Maybe now that threshold’s at a hundred
1:14:37 dollars, maybe for some people it’s at a thousand or, you know, even higher. So I’ve gotten better
1:14:42 at, is this a thing I want to optimize? Or is this a thing where I’m just going to buy the flight? Like
1:14:47 I got to go to this conference in San Diego. Flights aren’t that expensive. Let’s just buy it. For
1:14:52 anyone thinking that way. And this is also good for you. There’s this great browser extension called
1:14:58 points path, which just layers on Google flights points path. Okay. And then they have an opinion.
1:15:03 They’re like, this is a good deal with points. This is a good deal with cash. So you’re like
1:15:07 looking on Google flights to go to San Diego. And it’s like, Hey, actually just go transfer,
1:15:13 go use United points. Don’t buy this one. Oh, this is a bad deal. It’s like even easier than these other
1:15:18 tools. Cause it lives where you’re already searching. Now in some times I’m like, let’s just book it,
1:15:25 be done. I don’t want to spend my afternoon on saving $5 or $20 or even $50. I kind of do a $50,
1:15:34 but I should not. So I think that’s it. Sometimes this stuff goes wrong and wrong is a stretch, but
1:15:39 I make mistakes that I talk about not making all the time. I had this woman, Devin Gimbel,
1:15:44 who has a podcast called point me to first class on. And we talked about like the points journey and like
1:15:48 you start off and it’s like, so great. You’re like, I use my points at Amazon. This is amazing.
1:15:53 And it feels like points are amazing. And then you start to learn more. And this is,
1:15:56 I think it’s the Dunning-Kruger effect. It’s like, now that I know a little more,
1:16:01 oh man, like I’ve been doing it wrong the whole time. You feel terrible. And then you start to
1:16:04 learn and you’re like, now I’m doing great again. But there are going to be a lot of people that
1:16:10 listen to this conversation right now. And they’re like, now I know more. Now I feel worse about what
1:16:15 I’m doing. There is another side to that. Like the, the Valley of despair where we’ll get past it or,
1:16:18 you know, listen to that conversation I had with her and that would help.
1:16:20 Wait, the value of despair?
1:16:21 Value of despair.
1:16:27 Oh, I like both. Yeah. That’s the, uh, like the trough of sorrow in.
1:16:32 Yes. Yeah. I think there’s like dozens of names of, of what it means to learn more and then not yet
1:16:38 master it and all that. So I think to where you were going, I have made mistakes. I’ve booked flights
1:16:43 that were non-cancelable and then tried to cancel them and got no refund. Like I’ve booked trips we
1:16:48 never needed to take. I’ve booked backup flights and forgot to cancel them and lost points. Like,
1:16:53 you know, make tons of mistakes doing all this. That’s just how we learn. And even once you know
1:16:58 the things you do it wrong, but the value of everything I’ve gotten out of it has far exceeded
1:17:04 those mistakes. And I’m okay with making those mistakes. And I’ve just learned to say, is this the
1:17:12 giant trip of the year where we can save $10,000? Or is this the, I need to go to this place for a
1:17:16 meeting and it’s not worth my time? And that changes, right? Like earlier in your career,
1:17:23 it might always be worth your time. Yeah, definitely. I mean, yeah, back in the day,
1:17:28 I mean, when I first moved to Silicon Valley, I don’t know if I ever told you this when I very first
1:17:37 moved, it was 2000, couldn’t find an apartment, bought a standby ticket to, I was just waiting for
1:17:44 San Francisco or San Jose. I wore my one suit back when I thought I needed a suit to do like job
1:17:53 interviews in Silicon Valley and ended up staying at a kickboxing gym. This was Fairtex gym. And I
1:18:00 lived on a bunk bed with one of the Thai guys up in basically the attic. And I would like wash my clothing
1:18:07 in the sink. And so I was definitely looking for any cost savings that I could find in any capacity
1:18:12 whatsoever. And like you said, the threshold has just changed over time. And how I think about my
1:18:17 time has changed over time. But I’ll talk about another optimizer’s curse actually, because I don’t
1:18:23 think this gets as much airtime, or at least I haven’t heard very many people talk about it. So there’s
1:18:31 the curse of like over optimizing deals slash frugality. But then there’s the curse of over
1:18:40 optimizing efficiency, where people come to value their time so highly that any wasted minute causes
1:18:45 tremendous psychological anguish. Do you know what I mean? Like if they have to wait for something for
1:18:54 five minutes, it bothers them to such an extent, maybe even after the fact that just like the
1:18:59 sort of frugality and excess kind of becomes the opposite of what you were looking for, which is
1:19:04 this like psychological peace, perhaps, or quality of life. The same thing is true with people who
1:19:10 feel like they have more money than time, or that their time is incredibly, incredibly valuable.
1:19:15 Like there is a point where it starts to hurt you and not help you. Does that make sense?
1:19:16 Yeah.
1:19:23 It’s like, so finding that Goldilocks is something I think about a lot. Because if you read the four
1:19:28 hour workweek, whatever, yes, like there are guidelines for people who have perhaps not ever tried to
1:19:34 objectively value their time for looking at annual income and cutting this, this, and this to determine
1:19:39 your kind of hourly rate per se, right? The value of an hour of time. But when you take that
1:19:45 and apply it to everything and start to really ratchet up your perceived value of time, it can
1:19:52 actually create a lot of anxiety, which I imagine the sort of hyper frugality side can as well.
1:19:56 Right? So like they share more in common than I think people might realize.
1:20:03 I think about this all the time. The fact that it is sport makes it easier for me to justify
1:20:09 spending an hour going down a rabbit hole because not only do I kind of enjoy the process, but I can also,
1:20:13 I have a podcast. I can share the process with other people and then they can skirt some of the
1:20:19 process by not making the mistakes I do. On the flip side, I often think about what is my time worth?
1:20:24 I get requests for people to, you know, Hey, could you consult on this thing? And I’m like,
1:20:29 it’s just, I got other stuff to do. And I’m like, well, if I said no to a consulting call for $250,
1:20:36 then like my time must be worth $250. Do I want to, you know, lay in bed and watch this movie?
1:20:43 It’s $250 to watch a movie. Somehow I’ve been able to just be like, nope. And I just ignore it all.
1:20:47 But I imagine there are people that think about that and can’t stop thinking about it.
1:20:54 And my only advice is to just try to not calculate every little thing because it’s impossible.
1:21:00 And think about maybe your nine to five time. Think about your work hours of whether they’re
1:21:06 most efficiently used. But in free time, I try to ignore the value of time. It’s like,
1:21:09 does it cost me a thousand dollars an hour to play with my kids? Like, I don’t,
1:21:13 that’s just a ridiculous thing. I’m not even going to entertain.
1:21:18 Where are the robots when you need them? Don’t worry. They’re coming. Soft hands,
1:21:21 soft hands. Don’t be the first of a hundred parents to test them out.
1:21:27 So looking at what I’ve done, I also want to ask you about the future of travel. So I’ll just plant
1:21:31 that seed. Like what you think this space is going to look like in the next handful of years
1:21:37 or what innovations you’d like to see. What could I have done in the beginning? What would you have done
1:21:43 differently looking at what I’ve accumulated? So I tried to model out what you could have done
1:21:50 and what the impact would have been. And, you know, my rough answer, and I built this whole,
1:21:55 I don’t know, this optimizers tool, which is like, you could basically put in all how much you spend
1:22:00 and you could check off like which cards you have and see other cards and see how much better it would
1:22:08 be. If you had other ones, the short answer is almost everyone is optimal with two things,
1:22:15 a card that gives them elevated earning on the things that they spend the most on and a card
1:22:25 that gives them 2% or 2x points on everything else. Like that is the optimal solution. And so in the case
1:22:31 of the Amex Platinum card, which I have multiple of, you’re getting one point on everything and five
1:22:38 points on flights specifically booked with the airline. And so not a great card for anything other
1:22:42 than flights booked with airlines, but getting five points on flights booked with airlines. Excellent.
1:22:49 But if you figure 90% of the spend you put on that card was not a flight booked with an airline.
1:22:51 It’s advertising.
1:22:51 Yeah.
1:22:52 For companies.
1:22:57 Advertising. I would say for your specific case, it’s like, well, the Amex Business Gold card
1:23:05 gives you 4x points on advertising spend up to $150,000 a year. But like, you’d be much better
1:23:10 off getting 4x than 1x on ad spend. Yeah, it’s much more than I put on travel. I mean,
1:23:13 by 10x, 20x, 50x. Yeah.
1:23:18 If you took a card like Capital One has the Venture and the Venture X card, and on the business side,
1:23:24 they have the Venture X business, which is just 2x on everything. There’s no games to play. It’s not,
1:23:28 you know, which, what do I use for this? You’d get 2x on everything. You would have probably been a lot
1:23:35 better off. Because you were getting 5x on flights, but 1x on everything else. The Amex Business Platinum
1:23:41 does 1.5x on purchases over $5,000. So maybe you were getting 1.5x on a lot of those things for
1:23:44 business. But you could have just gotten 2x on everything. It probably would have simplified your
1:23:50 life. And then you could have picked a card, whether it’s personal, I’ll focus personal use case, which is
1:23:58 like Chase Sapphire Reserve card is 3x on travel and dining. The Amex Gold card is 4x on dining and
1:24:04 groceries. I don’t want to go down every card under the sun. But there are cards that are targeting
1:24:09 people who spend in categories that are pretty common, like travel and dining are two of the biggest ones
1:24:18 where cards reward you. So I think the average person is best off with a card that earns 3 to 4 points on
1:24:25 the categories they spend the most on, and a card that earns 2 on everything else. And whether that’s 2 points
1:24:32 or 2% cash back, kind of is up to you. Like, do you want to play the game and try to get the most out of
1:24:37 it and take all these aspirational trips? Or do you want to just put cash in the bank and not worry about
1:24:42 it? And that doesn’t mean you can’t get some of the value. If we loop back to one example I just shared,
1:24:49 the Caprocot Hotel. Beautiful hotel. It was 120,000 Hilton points per night. Hilton points, when I booked
1:24:57 the hotel, were on sale for half a cent each. So there’s this crazy arbitrage that required no playing
1:25:05 the points game, which was a night at the hotel was like $3,000 or 120,000 points. But on the website,
1:25:10 the same day, you could just buy 120,000 points for $600. So someone who’d been playing the cashback
1:25:18 game their whole life could just go to the Hilton website, buy 120,000 points for $600, book the $3,000
1:25:25 room for 120,000 points, and get effectively the same elevated value that I got from playing the points
1:25:29 game without ever playing the points game. Yeah. That was on the same website?
1:25:35 So, I mean, that was just on Hilton.com. Hilton points are notorious for going on sale all the
1:25:41 time. I will say you can’t buy Chase points. You can’t buy Amex points. Airlines points go on sale
1:25:48 from time to time. So there are places where you could buy points from airlines if you see an amazing
1:25:52 deal. And I would encourage people to do that, right? Like, let’s say you have no points and you’re
1:25:58 about to take a big international trip. Go to Award Tool. Go to Points. Yeah. If you see a ridiculous deal
1:26:03 and you don’t have any points, chances are at least one of the airlines you can book that deal from
1:26:08 sells their points, and it might be a better deal to go buy United points or Air Canada points and book
1:26:14 it with points. Let me hop in here. All right. So I’d love the kind of on the same website arbitrage
1:26:21 because it makes me think that there’s some guy running spreadsheets doing all sorts of fine tuning
1:26:27 internally who’s like, this is for my boys and girls who get the game and just planted like this Easter
1:26:32 egg, wink, wink for anybody who actually happens to get the scent trail. I like that story. So I’m
1:26:36 going to stick with it. But the reality is most people that have a Hilton account and have Hilton
1:26:42 points are using it to book a night at the Hilton garden in for their family reunion in some city in
1:26:48 America. They’re not trying to go to the Maldives or Bora Bora every weekend, and they’re not ready to book
1:26:54 it on a dime. These aspirational stories are just that. They’re aspirational. And so if they’re not
1:26:59 in your short-term future, racking up Hilton points doesn’t do you a lot.
1:27:07 Yeah. All right. So let me just come back to my own situation. So it sounds like for what I’m doing,
1:27:12 assuming that… Because this is going to be true for, I would imagine, a lot of solopreneurs or
1:27:18 entrepreneurs with small businesses that the vast majority of their expenses are on things like
1:27:26 advertising, media, maybe also for different service providers like email service provider,
1:27:31 blah, blah, blah, blah, blah. Those are going to be the big buckets. So it sounds like a next step for
1:27:34 me, at the very least, would be to get a gold card.
1:27:35 Business gold.
1:27:39 Business gold. Thank you. Business gold.
1:27:44 Just to move those types of expenses to that immediately, because it doesn’t take much for me,
1:27:50 and it will, I guess, 1.5 to 4x my return on that spend.
1:27:50 Yeah.
1:27:51 Right?
1:27:55 And then on the… If someone’s in the Chase ecosystem, there’s a Chase Inc. preferred card,
1:28:01 which is 3x on ad spend and travel. I think it’s also office supplies and shipping or something like
1:28:09 that. I can’t remember all of them off the top of my head. So that’s one path. The other path is,
1:28:15 okay, yes, you like these points, but you don’t really get a lot of tangible value in the moment
1:28:22 from them. Until you can redeem them, there’s no value. So what some people do, and clearly 1% of GDP
1:28:30 on Delta cards is an example, most of the airline credit cards and Hyatt, notably because they don’t
1:28:36 just give away their top tier of status, you can spend your way to status on most of the domestic
1:28:42 airlines like United American and Delta and Hyatt, their highest global status. So you could get a
1:28:49 Delta Reserve Amex, throw a million dollars of spend a year, and you’d be Delta Diamond. I don’t
1:28:55 know the exact number. Depending on the airline, it’s between $200,000 and $400,000 a year would get
1:28:59 you their highest tier of status. What does that give you?
1:29:08 Depending on the airline, it might be priority boarding, upgrades as available, right? Not anytime,
1:29:14 free Wi-Fi, whatever the perks are. Southwest is one of the ones where you actually get the guarantee
1:29:23 if you earn 125,000 points. If you spend $125,000 on a Southwest card, you will get companion pass.
1:29:30 You can name any person your companion, and every time you fly, as long as there are two seats on the
1:29:35 flight, they will fly free with you. And it’s not two seats when you get there. You can reserve the
1:29:41 seat when you’re booking. So right now, my wife is my companion on Southwest. If I buy a flight,
1:29:46 she can come for free, taxes excluded. So you pay the $5 to $50,000 depending on where you’re going.
1:29:52 That one’s one where like every single flight. So if you flew Southwest a lot, which I’m guessing you
1:29:59 don’t, spending $125,000 on a Southwest card, bring your companion for free. I know a lot of people,
1:30:05 my sister-in-law actually, and her husband, they own a handful of small businesses in Colorado.
1:30:10 And they have two kids. They put a ton of their business expenses on two different Southwest cards.
1:30:15 They each have companion pass because of it. All the points and miles they’ve earned from Southwest,
1:30:18 they use to buy flights for them. And their kids fly free with them everywhere they go.
1:30:19 Yeah, that makes sense.
1:30:24 Could they have had more Amex points or chase points if they played the game differently?
1:30:29 Maybe. But right now, do they get to take vacations all the time with their family and never
1:30:33 pay for any of it? And their kids’ flights are always free, and their flights are paid with the
1:30:38 points they earn on the card. Yeah, pretty cool. They don’t think about the cost of travel.
1:30:43 Now, they can only go where Southwest goes if they want to go for free. So trade-offs.
1:30:48 Trade-offs. Yeah, I mean, it’s all trade-offs. And I actually do sometimes fly Southwest. You’d
1:30:54 be surprised to know. It’s not all the time. But Southwest and JetBlue, I actually fly with
1:30:56 some regularity. That’s a story for another time.
1:31:00 But I just share that someone who spends a lot of money for their business or their person,
1:31:08 optimal solution might be to get a card that matches their expenses or a 2x 2% card and just
1:31:15 throw all the business expenses on those cards. And for that case, Bank of America similarly has
1:31:20 business cashback cards that if you put $100,000 in a business bank or brokerage account, you get
1:31:27 2.625% back on every business transaction. That’s the primary business card we use.
1:31:28 Which was that again?
1:31:33 The way Bank of America works, they have this program called Preferred Rewards. And depending
1:31:39 on how many dollars you have on deposit, they multiply your earnings by up to 1.75.
1:31:40 That’s clever.
1:31:47 So the card is marketed as earning 1.5 or 2 points, and then they multiply it. So it’s a little…
1:31:50 I wouldn’t say it’s like that complicated, but it’s not as straightforward in that they’re
1:31:56 not marketing as that. But on the website, they say, you know, deposit $100,000 and hold it
1:32:02 at a Bank of America account for your business, 2.625%. If you’re a business that doesn’t want
1:32:05 to think about this game, you just want to get the rebate on everything, great.
1:32:12 All right. So the future of travel, we can come to. I know I bookmarked that. So I’ll let
1:32:21 you choose. I’ll give you a couple of prompts. Pudding cups, U.S. Mint, or your wedding? Which
1:32:26 would you like to go with first? They’re pretty short stories. So I’ll just run through
1:32:32 them in the order you gave them. So this guy, Dave Phillips, back in the late 90s,
1:32:37 noticed that there was this promo from Healthy Choice. If anyone remembers, like the green brand
1:32:41 that made all these, probably not in today’s standards, healthy foods. It was like, you get
1:32:48 a thousand miles for every 10 barcodes you mail in. And he found that he could buy these trial size
1:32:54 pudding cups for 25 cents and they all had their own barcodes. And so he drove hundreds of miles
1:33:00 around, filled up a van, bought over 12,000 pudding cups, donated all the pudding cups to local shelters
1:33:06 with the requirement that they would need to, as they serve them, give him back all the tops that
1:33:11 they peeled off so he could mail them in. And he ended up earning, I can’t remember how many miles
1:33:17 it was. It was enough miles that he said he spent seven years burning through them, taking friends
1:33:23 around the world, going on amazing trips. He got to write off the pudding as a donation. His total cost
1:33:35 was like $2,500. And so it’s just a great example of learning to spot places where promos or credit
1:33:42 card rewards can be pretty lucrative. And so if anyone was around in the mid-2000s, the US government
1:33:48 kind of passed some legislation to get this $1 coin in circulation. And so they basically said,
1:33:55 we’ve got to get this coin in circulation. And so they basically let you buy dollar coins from the US Mint
1:34:02 website for $1. And you can put them on a credit card. And so you would go on. And the idea was coins
1:34:09 last longer than bills. And so the government said a $1 coin would save us $5 billion over 30 years because
1:34:15 it would last, you know, we didn’t have to reprint all these bills. And so they sold $1 coins, shipping
1:34:23 included for $1. And this one guy, I don’t know his name, bought $2.5 million of dollar
1:34:30 coins. He said they weighed like 40,000 plus pounds. And so he would just get these coins to his house
1:34:35 and he would throw them in his car, wheelbarrow them to the bank, deposit them as US dollars and just
1:34:39 cycle through earning millions and millions of credit card points, buying coins on his card.
1:34:47 And so I think that’s an extreme version of points arbitrage. A lighter version is just,
1:34:52 I spend a lot of money on Amazon. I mean, let’s not use Amazon because Amazon has a credit card that
1:34:57 gives you 5%. But let’s say you spend a lot of money at Apple and you’re at the checkout line at the
1:35:01 grocery store and there’s an Apple gift card. And you could just buy your Apple gift card at the
1:35:06 grocery store, load it up to your Apple account. But because you have a card that earns 4x points on
1:35:12 groceries, you get 4x on Apple instead of 1 because you bought the Apple gift card at the grocery where
1:35:17 you get elevated points. And so looking at places where you can move around your spending or buy
1:35:21 things that are easy to sell on a card, great options.
1:35:25 Let me throw one out for you just because you may already know this, but I think it’s a fun story,
1:35:32 even though the conclusion is a little unclear to me. Did you ever hear the story about Kyle Bass,
1:35:38 well-known hedge fund manager and his nickel purchase? Did you ever hear about this?
1:35:44 Okay. So I just looked it up and now this is on some random website. So who knows? Fact check
1:35:50 everything, folks. But here it is. In 2011, hedge fund manager Kyle Bass reportedly bought $1 million
1:35:57 worth of nickels. Why on earth would anyone want to own 20 million nickels? Let’s work out the underlying
1:36:03 logic of this trade. A nickel weighs 5 grams, 75% of which is copper. The rest is nickel. At the time
1:36:08 that Bass bought his nickels, the actual metal content of each coin was worth around 6.8 cents.
1:36:15 So Bass was buying 6.8 cents for 5 cents or 1.36 million worth of base metals for just $1 million.
1:36:21 And it goes on there, a bunch of important points in the fine print here, right? Because he’s not going
1:36:26 to want to melt it down himself. Is it even legal for him to do that? Maybe not. So does he have
1:36:35 exposure then to the nickel and copper markets? How does it work? But still kind of a neat example of
1:36:42 how some of these opportunities seemingly, and make sure you’re not too clever by half because you can
1:36:46 shoot yourself in the foot financially, but it’s like, it’s kind of makes for a fun story.
1:36:53 The last story was that, and this goes back to my early, earliest days of buying pizza in college,
1:36:58 when we were getting married, we had no idea how expensive things could be at a wedding.
1:37:04 And so this guy who was kind of a successful entrepreneur in Silicon Valley had this amazing
1:37:07 wedding video he shared. And I was like, well, that was really cool. I’d love a wedding video like that.
1:37:12 So I looked at who produced it and I emailed them and they were like, yeah, we’d love to do your
1:37:16 wedding. It’s like, awesome. How much is it? And the woman was like, it was like $13,000.
1:37:22 And I was like, no, like, sorry. I thought a wedding video would be like a fun thing to have,
1:37:28 but $13,000 was like a meaningful portion of our entire wedding budget. I can’t spend this on a
1:37:33 wedding. And I’d been talking to this woman, unfortunately, for like three or four calls
1:37:37 before I knew the price. And she was like, God, your wedding sounds fun. Like you’re a cool person.
1:37:42 I’d love to do it. And I was like, yeah, I don’t know what to tell you. And I had been talking about
1:37:47 our honeymoon and we were going to the Seychelles and that was the plan for our honeymoon. And she
1:37:51 was like, gosh, it would be fun to do your wedding. It’s like, man, I just, I’d love to hear the story
1:37:55 of how your honeymoon goes. I’ve always wanted to go to the Seychelles. And I was like, really?
1:38:01 You’ve always wanted to go to the Seychelles? The street price of two business class tickets to the
1:38:09 Seychelles is like $20,000. But the actual cost to me in miles is like $2,000. So I offered her,
1:38:14 I said, look, what if I sent you and your husband to the Seychelles in business class, whenever you
1:38:19 want to go, like, we’ll find a time where the flights work. I will book you there. You will save
1:38:24 $20,000 if you otherwise would have bought the ticket. I’ll do it with points. What do you think?
1:38:29 And she was like, let’s do it. And so she agreed to do the wedding. The only cost we had was we paid
1:38:35 for the hotel rooms for the videographer because like that was a real cost. But all the time costs
1:38:40 and editing costs, she ate. And it turns out at the time she wanted to go, it was harder to find the
1:38:44 Seychelles. So we sent her and her husband from Colorado to Mauritius in business class. They had
1:38:50 an amazing trip. And so I would say the lesson here is like, you know, you can always find ways to
1:38:58 negotiate anything. That’s one of my principles. That might be the golden move that I could apply
1:39:03 without inflicting much brand damage. Because I work with dozens of contractors for a million
1:39:10 different things. And I could say, okay, how about instead of paying you rack rate retail for your
1:39:16 services, which is 10K, right? I said to you on this trip, which is 15K. If in fact, they want to travel
1:39:20 or whatever it is, since that’s going to be seemingly the highest conversion, right?
1:39:28 I could probably do that a handful of times and squeeze a lot more value out of these points
1:39:37 than I would for myself over time. Since I just don’t foresee traveling with a high enough frequency,
1:39:42 it would take a long time to kind of drain the bathtub before it’s refilling, so to speak.
1:39:51 But if I’m using it also to find opportunities to pay for folks or give them something, I wonder
1:39:58 what the tax implications are of that. Who the fuck knows? Yeah. How does that work? From a gift tax
1:40:02 perspective, do they get themselves into trouble? I guess that’s a problem for them and their accountants.
1:40:11 I don’t have an answer to that, but I would be very surprised if you bought a flight for someone
1:40:17 and if you asked your accountant, they might say, like, it seems fine. Like, I’m not an accountant.
1:40:20 I’m not gonna tell you what to do. I’m sure someone listening will tell you there are tax implications.
1:40:25 Yeah. I mean, I suppose it’s, well, it’s different from a gift because it’s a barter,
1:40:32 effectively. So there are probably specific elements of the tax code that deal with bartering. I have no
1:40:36 idea what they are. What is the value of the thing you’re giving and all that? Another option, though,
1:40:43 for anyone who’s a business owner, you know, it’s like, oh, I could give all my employees a $1,000 bonus,
1:40:49 or I could send them all on a $5,000 vacation that cost me $1,000 worth of points. That employee is
1:40:55 going to have this incredible experience. Pick any luxury resort that’s in the Hilton portfolio.
1:41:00 Amex transfers one to two to Hilton, you know, 24 million Hilton points. You’re like, where do you
1:41:07 want to go on vacation? You know, it’s like a gift to employees, to family members. One of the
1:41:10 interesting things is you probably have less flexibility in your schedule, but maybe you have
1:41:16 family members or friends or nieces or nephews or graduation gifts. I heard this great story. A
1:41:20 friend of mine gave his son for graduation. He’s like, right after graduation, you tell me I’ll
1:41:24 send you anywhere you want to go in the month after you graduate. Like he didn’t start his job for a
1:41:29 month. So he could, you know, it didn’t matter what day, didn’t matter what time. And he and his best
1:41:33 friend, he flew, he and his best friend to Asia. So like that was his graduation. How hard is it to
1:41:38 transfer points to someone else, right? I’ve got 12 million points. If I was like, here’s a competition.
1:41:43 That’s what do you mean? I don’t need to. So you could do two things. You could book a flight in the
1:41:49 Amex portal for anyone. You can transfer those Amex points only to your loyalty account, but you
1:41:55 can book it for anyone. So you can transfer those membership rewards to Air Canada and book a flight
1:42:01 for anyone in the world on any flight that Air Canada is partners with. I think Air Canada has the
1:42:08 most airline partners of any airline in the world, I think. So Air Canada is like a great target for Amex
1:42:12 points. What would you do in my shoes right now? Because we talked about the long haul
1:42:21 international, we talked about using the different tools that you’ve already outlined for checking for
1:42:28 flights, award tool, Amex travel portal, etc. Talked about getting a business gold card for more
1:42:34 advertising. Anything else that is easy for me to do or have what my assistant in the Philippines
1:42:40 help with doing. But like if it chews up a few hours of my time, I will probably have an allergic reaction.
1:42:46 So is there anything else where you’d be like low hanging fruit, do or don’t do these additional
1:42:50 things? Get rid of this card. That’s bullshit. Do this. This is hurting you more than helping you.
1:42:55 Well, I know that on your list, you have over a million Capital One points that you’ve earned on
1:43:00 after back and forth with you and trying to look at pictures. I still can’t figure out what card it’s
1:43:06 earning points on, but it earns just one point on every dollar. So at a minimum, it’s like if you
1:43:12 just got a two on everything or a cashback, I would encourage you to maybe just switch to
1:43:20 Bank of America premium rewards card, get 2.6% cash back on everything, 3.5% cash back on travel and
1:43:25 dining. Stop worrying about these points. That requires me to have 100k in a bank account there
1:43:30 or no? The most optimal would be open up some brokerage account, throw 100 grand in treasuries
1:43:35 and not worry about it. The easiest would be open up a checking account that earns almost no interest
1:43:43 that would be some opportunity cost. But if that’s even too much for you, it’s like go open the fidelity
1:43:49 card that gets 2% on everything and you don’t have to move money anywhere. There are multiple cards that
1:43:57 earn 2%. Capital One has a spark cash on the business side and then a venture card, which is just 2x
1:44:03 points on everything on the personal side. So there are a lot of options. But for you and everyone
1:44:10 listening, everyone listening should not be getting less than 2 points or 2% on any transaction because
1:44:15 you’re just giving money away. Let me caveat, unless you’re in the middle of rebuilding your credit and you’re
1:44:25 not eligible for all these cards. Caveat one. Caveat two, no amount of the 19% to 29% APR that most of
1:44:31 these cards are charging is worth any of these points. So we should have rewind. Anyone that’s
1:44:35 thinking about optimizing their credit card game, if you can’t pay your balance off in full each month,
1:44:40 it is not worth it. Stop. Do not pass go. Do not do any of these strategies. If you can pay your card
1:44:47 off each month and you’re you have enough credit score to get a card that earns 2x or 2%, that is
1:44:55 the floor. Anything earning less than that, it’s too easy to earn 2% or 2x points on everything to have
1:45:03 any excuse of doing anything else. But I might have 30 cards, which is a little insane. The difference
1:45:10 between 2 and 30 is very minor. The difference between 1 and 2 is pretty decent. So I would say
1:45:15 finding the two cards that optimize is really the gold standard.
1:45:20 I mean, I just have to give credit again where credit is due, but you’ve turned your obsession
1:45:30 slash sports slash optimizer’s curse also into your business, right? So there is actually much more
1:45:37 so than the average duck walking around doing this behind closed doors and upside to you to experiment,
1:45:43 which is what you like doing in the first place. So it’s a very beautiful solution that checks a lot
1:45:49 of boxes. So congratulations again on that. I feel lucky that I basically just started recording
1:45:55 a day in the life of myself. He’s like, today, I’m going to go down the rabbit hole of every card that
1:46:00 Citibank has and break down every little feature and why there’s a couple real ways that you could
1:46:05 basically earn top-tier city status not too difficultly. Great. That’s an episode. Let’s deep
1:46:08 dive on gold. Let’s deep dive on award travel.
1:46:10 Which is legitimately a day in the life.
1:46:13 That is what I want to do, and I get to share it.
1:46:19 Yeah. It makes me think of… I think in the first episode I did with Chris Saka a million years ago,
1:46:24 investor who’s now a billionaire, crazy story, but fully embracing your weird self,
1:46:30 right? Like there is a lot to that that we could unpack in a completely separate episode.
1:46:37 Funny enough, the last I saw you was in Austin at the live Dignation. And I saw Chris Saka there,
1:46:42 who heard me talking about gold. And he was like, can I just come with you? Like,
1:46:45 there’s still a part of him that he’s like, even at his level of wealth, he’s like,
1:46:49 dude, I want to do this. Like, I want to go resell gold. Like he’s just like,
1:46:54 loves the arbitrage opportunity. So there’s something fun about knowing you kind of like
1:46:55 got one over the system.
1:47:02 Yeah. Oh, for sure. What do you think the future looks like here? Any hopes? Any expectations? I
1:47:08 mean, you track this is not to use this incantation as a catch-all for everything,
1:47:15 but certainly my frequency of using AI tools has gone up 10x in the last two months alone.
1:47:24 And a lot is going to change. And I would imagine maybe just like high frequency trading and so on
1:47:30 affected the investing game. And obviously prior to that, a lot of the quant stuff out of places like
1:47:36 rent tech and whatever. Are the arbitrage opportunities going to vanish with the smoothing
1:47:41 over of robots who are attempting to do the same thing that a lot of people are doing semi-manually
1:47:46 right now? Do you think there’s going to be a lot of amazing stuff coming? I mean, what do you see
1:47:51 when you or hope for when you look into your crystal ball with travel stuff or point stuff?
1:47:58 There’s a couple tailwinds and a couple headwinds. So on the tailwind side, one of the challenges
1:48:02 with having all these points is that these programs are always devaluing things all the
1:48:07 time. And so, you know, there used to be amazing opportunities to do X and now it costs 20% more.
1:48:13 One of the nice things is that the government kind of is doing some sort of like, we’re going to
1:48:19 investigate whether airlines are devaluing people’s miles. And so there’s currently some sort of
1:48:24 investigation going on. So I think we are unlikely to see a lot of devaluing coming in the near-ish
1:48:28 future because there’s some scrutiny about that. So that’s positive.
1:48:34 There is this credit card competition act that’s been tried to be passed.
1:48:40 The idea being, we didn’t talk about this, but the way all of this is funded is that when you swipe your
1:48:45 credit card, there is a fee that the merchant pays to use your credit card. And that fee gets split
1:48:51 between the payment processor, like a Stripe or a Square or lots of other ones, the issuer and the
1:48:58 network. So Visa, MasterCard is a network. The issuer is your Chase. And so those fees pay for
1:49:03 this. In a lot of other countries, that interchange is capped. So like in, I think in the EU, it’s capped
1:49:09 at 0.3%. And in the US, it can be as high as 3%. So the credit card competition act is like a,
1:49:16 in my personal opinion, like a bad attempt at trying to make this better in that I’m not going to go into
1:49:21 the nuance of what it does. But the senator who created it has tried to attach it to this
1:49:25 crypto genius act that by the time this comes out, maybe we know the fate of it anyways. But
1:49:30 there are some people trying to create legislation to bring down the interchange rates, create more
1:49:35 competition. If interchange was 0.3%, you would not be earning all this cash back and points on
1:49:41 anything. That’s why cards in Europe are much less lucrative, if not completely foreign concept.
1:49:49 So if that happens, great. The reality is, it seems like merchants are not going to all of a sudden,
1:49:55 just like drop their prices if their fees go down. Like we’ve seen multiple cases with tariffs with
1:49:59 other things that that’s not usually the behavior that happens. So that’s on the point side. I think
1:50:04 it’s become a lot easier to use your points with all these tools. And I think AI will make those tools
1:50:09 even better. You’ll just be like, I want to go to Japan. It’ll be like, based on everything you have,
1:50:14 based on everything that’s out there, here’s the optimal way to do it. On one hand, that’s kind of
1:50:21 a bummer for the people who understand the system now. If everyone can understand the system,
1:50:30 you know, those outsized return options are less. That said, one of the ways that outsized value comes
1:50:36 is from still doing things that are like, I’m not going to look from SF, I might look from the West
1:50:41 Coast. I don’t care where I’m going to stay, find me the best deal. So I think it’ll be a while before
1:50:46 the average person thinks that way. I think the average person, whether an AI tool is doing the
1:50:53 searching or not, is like, I want to go here. How do we go to Paris in June? Not, what’s a great deal I
1:50:59 could get? And I’m willing to buy a ticket to Austin and fly to Paris from Austin if that’s awesome on a
1:51:04 separate airline and a separate ticket. I think AI keeps blowing my mind every month. So who knows,
1:51:11 all of this and help us all redeem our points in way better ways. And maybe this scrutiny will
1:51:16 prevent airlines from devaluing and we’ll all win. But I still think there will always be edge cases
1:51:23 around how to do it and ways to find the optimal inventory flights that will leave some upside for
1:51:29 those of us who spend a little bit more time being ahead of the curve. And I’m glad that it’s easier for
1:51:35 more people to do that. Like it was really hard 10 years ago to get crazy value. Now it’s easier.
1:51:40 I think it’ll get a little easier, but I still think there’ll be a lot of upside for people who
1:51:47 pay attention to what’s going on. As for travel in general, I’m not sure what AI’s influence will be
1:51:55 on airlines and hotels and all that. I haven’t really thought too deeply about it. It seems like
1:52:00 it solves a lot more aspects of my life than leisure travel or even business travel.
1:52:05 Big question mark for me. Not the slightest clue, frankly. I mean, I’m hoping it can reduce a lot of
1:52:12 friction, but how it does that, what the form factor is, how people interact with it, no idea at this
1:52:18 point. So TBD. I was talking to someone and they were like, on booking.com, this website said the
1:52:23 room had two beds and on all the other portals, it said it had one. And then I called the hotel and
1:52:28 they were like, we have two. So some story like that. It’s like the moment you have a travel scenario
1:52:35 where AI booked the wrong thing, you’re like, I would rather just do this myself. Like, you know,
1:52:39 get to the airport and the flight was wrong. It was on the wrong day. I’m not going to let an AI book my
1:52:43 travel, but I might let it do some exploration. I do think when it comes to itinerary planning,
1:52:48 if anyone is planning a trip anywhere and is not using AI to think about where to go, what to do.
1:52:55 Unbelievable. That is incredible. Plan my 10-day vacation in Japan. Yeah, the AI tools for planning
1:53:01 trips are just out of this world. So I would use it for inspiration and, oh, I want a place cold. Oh,
1:53:06 I’m traveling with my kids. Oh, that’s too much travel. Oh, can I take a train between these two cities?
1:53:08 That kind of stuff. It’s just so good.
1:53:14 Incredibly helpful. Yeah, I used it. I was in Japan visiting my host family I stayed with when I was
1:53:20 15, actually. So 32 years later, still close. And used it for day planning. Woke up, it’s raining.
1:53:29 Oops, can’t go to or won’t go to this particular location. Build me an itinerary with this weather
1:53:38 in this radius and then give me a walking tour starting in this location for the next day when
1:53:43 it’s sunny. I’m going to use that. Exploring those two and just ending up with two or three follow-up
1:53:50 prompts with an incredible itinerary, literally, that would have taken me God knows how long to put
1:53:55 together using normal search. It was just incredible. It’s really, really, really,
1:53:59 really powerful. What have we left out, Chris? What should we talk about? Any glaring omissions?
1:54:04 I’ve got a couple of things. One, there are some people who are like, I’m into it. I want to play
1:54:07 this game and I want to get the most out of it. Or I’ve been playing it and I want to level up.
1:54:11 And there are people who are like, I don’t want to. There’s still got to be something I can do.
1:54:19 And I would say a couple tricks that I think for people who like to travel that don’t require any
1:54:27 amount of points arbitrage, credit card, anything is one of my favorites is if you book your hotel
1:54:33 directly with the hotel, which outside of getting a deal or cashing out points, I would encourage you
1:54:39 to book directly with the hotel because they see your profile. They see your name. They see that you
1:54:46 have some loyalty. They want to build relationships. Email the hotel after you book and then maybe
1:54:50 follow up three or four days before you arrive and just tell them you’re coming. Tell them you’re
1:54:56 excited to stay with them. Ask them a question. I have seen, I don’t know what the percentage, but
1:55:02 at least 100 people have sent me photos of something that’s happened, whether it’s an upgrade,
1:55:06 whether they did something really nice in the room for their kid’s birthday. Someone had their
1:55:09 initials monogrammed in their pillow, which was kind of a weird thing to do.
1:55:12 Bottle of champagne, free drinks at the restaurant.
1:55:16 Like at the end of the day, the hotel game is still a hospitality game.
1:55:22 And if you give people a channel by which to build the relationship, I’ve been amazed at the
1:55:26 payoffs of doing that. So if you can’t find the email, ask chat GPT. If they can’t find it,
1:55:30 call the front desk and say, hey, is there an email for someone at the hotel and just say,
1:55:31 hey, I’m coming.
1:55:36 I’m excited to stay with you guys. We haven’t been to Italy ever. And we’re celebrating my son’s
1:55:40 birthday. You don’t need to ask for anything. Just let them know you’re coming. And I would be
1:55:46 surprised if at least every other time you do that, something doesn’t surprise you and the hotel doesn’t
1:55:47 find a way to do something nice.
1:55:55 Let me add just two things to that also. When you check in, there’s no harm in asking. Just out of
1:55:59 curiosity, are there any upgrades available? Abby, you can just ask because stuff happens, as you know,
1:56:09 all the time. And it doesn’t hurt to ask. And I’ve also had some crazy, crazy upgrades. Nothing to do with
1:56:14 my name, actually, because I usually book under an alias anyway. Long story, I won’t get into it,
1:56:22 but just for privacy and security and bullshit. And the craziest type of upgrades. It’s like if
1:56:27 you’re just friendly and they happen to have something that opened up and it’s last minute.
1:56:34 I mean, I’ve had… I remember at this one hotel, booked a decently nice room. Nothing like crazy,
1:56:38 super over the top. But it was just like chatting them up, having a good time, checking in. I was in a
1:56:42 good mood. Travel was easy, blah, blah, blah. And then asked if they had an upgrade and ended up
1:56:48 getting a penthouse suite, which was the entire floor. Just because they’re like, well, it’s kind
1:56:53 of like a zero. If we don’t sell it, it’s like 5 p.m. Nobody’s coming to use this thing.
1:56:59 And was able to have this incredible experience. Invited a bunch of friends over who lived in the
1:57:04 same city. And it was just outstanding. So it’s like, you can also ask. One last tip. This is for
1:57:07 restaurants. And I’ve got a whole bunch of these in the four-hour show for people who are interested.
1:57:13 But I used to work in restaurants, right? Bussing, waitering, et cetera, on Long Island,
1:57:20 mostly growing up. If you just ask people if they have a two-top or a four-top, right? Like a two-person
1:57:28 table or a four-person table. If you use that type of language, very often you will get better service
1:57:32 and get upgrades and all sorts of stuff. So that’s another easy one.
1:57:37 Happens a lot too if you sit at the pass, which I love to do anyway. And when I was working on
1:57:41 The 4-Hour Chef, it’s like I would want to sit at the pass. The pass is where the dishes that have
1:57:46 been prepared are often put under a heat lamp or they’re put up with their ticket so the servers can
1:57:52 come and get them. And a lot of restaurants will have a handful of seats that are effectively at the
1:57:57 pass so that you can watch what’s happening in the kitchen. And if you specifically request that,
1:58:01 which is not a very common request, again, very often you get much better treatment.
1:58:04 So just some ideas. What else do you have?
1:58:10 So I realize someone might be listening to this thinking, okay, Tim’s got millions of points.
1:58:15 Chris has millions of points. I actually want to take these vacations. I want to go on these trips.
1:58:17 I don’t have millions of points.
1:58:19 Make a wedding video for Chris.
1:58:23 Yeah. You spend some money, but you don’t spend hundreds of thousands of dollars a year.
1:58:26 So how do you even end up with this many points if you’re not running a business?
1:58:31 And I would say one thing is one of the ways most people I know rack up points. And I’ve got
1:58:38 so many stories from listeners who are like, hey, I just got into this thing and I’ve already been able
1:58:44 to take this amazing vacation, this amazing everything. So I could go through a long list
1:58:48 of people who are like, I’m three months in and I just took my wife on this amazing thing that we
1:58:54 never got to do our honeymoon, et cetera. One of the ways that people accelerate the game
1:59:01 is whenever you open up a new card, there might be some kind of offer. Oh, 100,000 points, 75,000
1:59:08 points. And so while I often say 2X points is a great return on your spend, I will say that if you
1:59:13 look at the top, and this I did a couple months ago, but if you look at the top 15 signup bonuses
1:59:19 or welcome bonuses right now, you know, earn 75,000 points for spending $5,000, that kind of
1:59:25 thing, the average return on spend, valuing the points at just a penny, we’re not even giving the
1:59:31 outside, is about 17%. So like, if you open up a new card and they offer you 100,000 points for
1:59:39 spending $5,000, right, that’s 20X return on that spend. And so those new card offers are 10X,
1:59:45 maybe in this case, 20X more lucrative than your regular spending. And so when I tell people that,
1:59:51 their first question is like, okay, but am I just going to ruin my credit if I open up two or three
1:59:56 cards a year? That was my next question. And there’s this great tweet, because I haven’t seen someone put
2:00:00 this visually, and I will send you a link to it. I don’t know this person, Chad Janis, he’s on Twitter,
2:00:06 he opened up this card, he’s like, my wife and I opened up 26 cards in 2017. We earned 2 million points
2:00:12 and traveled to 40 countries for free. That year of traveling changed our lives. Most people ask,
2:00:16 what happened to your credit score? What do you want to know? And he showed this chart where his
2:00:25 wife, Hannah, her credit score went from 670 to 798, and his went from 794 to 805. So I just want to
2:00:32 dispel this myth of opening up a handful of cards totally torching my credit. So what I will say is,
2:00:38 what you don’t want to do, and I should have said this earlier, if you’ve had a card for 20 years,
2:00:43 and you just realized in this episode that it’s the worst card you’ve ever had, and it earns nothing,
2:00:49 I wouldn’t go out and cancel it. Because one of the components of your credit score is the average
2:00:54 length of credit history. So what you don’t want to do is close the card that you’ve had for 20 years.
2:00:59 It’s like the anchor in that average. What you could do is just leave it open.
2:01:03 Question for you. When you cancel, because I’m glad you said that, because I was like,
2:01:09 oh, I’ll kill my Capital One card and hop to whatever. So if I were to close down the Capital
2:01:12 One card, which I’ve definitely had for probably 20 plus years, I think it was, might’ve been my
2:01:18 first credit card. Because long story, believe it or not, I wanted to work at Capital One when I was
2:01:22 going to graduate from college. Didn’t get the job, probably a blessing in disguise, but no offense to
2:01:26 Capital One. But they were doing amazing stuff with direct marketing at the time, which was
2:01:33 interesting to me. Anyway, if I were to close that, does it remove that entirely from my average,
2:01:39 or does it just stop it so that now it’s 20 point whatever years, and it’s not going to keep growing?
2:01:44 I believe your average age of credit is only looking at the active lines.
2:01:45 Oof, brutal.
2:01:49 Before you close a credit card, I think there’s kind of three choices you can make. One,
2:01:53 if there’s no annual fee, you just leave it open. Like there’s not a lot of risk,
2:01:58 like just leave it open. In the Capital One case, you can product change it to another card
2:02:02 more often than not. So you could call Capital One and say, what are my options for this card?
2:02:07 And they might say, oh, you could move it over to a venture card and earn two points per dollar
2:02:11 on everything. Would you rather have that card? And you could just change it to another card
2:02:19 that you do want. Now, the counter to that is if you wanted to get that 75,000, 100,000 points sign
2:02:24 up bonus on a card, you won’t get it when you change cards. So you could be better off just opening that
2:02:28 other card up and leaving the Capital One card there. So if it has no annual fee, you can just
2:02:35 leave it there. My ritual, I would give you two options. One, put one recurring charge that’s small
2:02:40 on it and set it to auto pay. Put your Spotify subscription. That way, they never close it for
2:02:45 inactivity. I have this ritual where around the holidays, I just kind of like go through all the
2:02:50 old cards and I just make sure I put a charge on each of them. My oldest card was a United card that
2:02:54 I got in college and I didn’t use it for four years and they just closed it. And I was pretty bummed.
2:03:01 I could have avoided that. Or if that charge has an annual fee, you can usually product change it down.
2:03:05 Let’s say you open the Chase Sapphire Preferred card. You don’t use it anymore, but it’s your
2:03:10 oldest card. You could downgrade it to the Freedom or the Freedom Flex card. No annual fee. Not going
2:03:16 to cost you anything. Or if the annual fee is what’s holding you back, you can call the bank and say,
2:03:20 hey, it’s a high annual fee. I’ll keep the card open. But what are you going to do for me? And
2:03:24 sometimes they might say nothing. Sometimes they might say, well, this year we’ll give you,
2:03:28 we’ll waive the annual fee. You don’t have to pay it this year. You’re kind of kicking the can
2:03:33 down the road a little bit, but there have been some great retention offers just asking if there
2:03:38 are anything that they could do for you. Let’s do a retrospective real quickly then on my Amex.
2:03:46 So I signed up ages ago, I mean, 20 plus years ago for Platinum in part, and this is where AI is going to
2:03:53 change things also, because you and I spoke about this at the time, as I remember it at least,
2:04:00 it gave you access to Amex Platinum Concierge. And I used the fuck out of that thing. I had them put
2:04:06 together reports. I was like, I’m considering getting a high altitude simulation tent. This was
2:04:13 for the four-hour body research. And I want you to look at, identify the four or five best models.
2:04:20 This is back in the day, right? This is probably 2008, 2009. And they put together the most excellent,
2:04:28 unbelievably good, 10-page Word document and send it to me. And so I would use the concierge service
2:04:35 for things like that. I don’t know if it continues to perform at that level because I have other tools
2:04:41 at my disposal now. But is the, I think it’s what, $175 a year, something like that? It’s probably the
2:04:42 annual charge.
2:04:49 Platinum Card now, I think it’s $695. Oh, fuck me. Okay. So it’s $695 a year. All right. Is that
2:04:55 worth it? Or in what cases is that worth it? Or should I just product down to gold and call it?
2:05:02 Yeah. I would say the concierges have been less lucrative in recent past than before. And on the
2:05:09 personal side, the personal Platinum, the primary benefit of it is you’ll get a Priority Pass membership,
2:05:14 or you can go to Amex Centurion lounges. Priority Pass is like a lounge network at airport lounges.
2:05:19 I only use my Amex Platinum Card for flights. My wife and I each have one. Obviously, we could put all
2:05:27 our flights on one of them. So I believe that I am able to take the coupon book of perks that the Amex
2:05:34 Platinum gives you and get more value than the annual fee. But I would say, knowing you and how many hoops I
2:05:39 don’t think you want to jump through, you probably wouldn’t. And so the question would be like,
2:05:43 do I spend enough on flights that holding this card to get elevated points on flights is worth it?
2:05:50 On the business side, I think you should absolutely keep it because redeeming your points is going to
2:05:56 be worth $0.54 if you have the business Platinum versus $0.01 if you don’t. Just booking flights,
2:06:01 no hassle, no searching for availability, just booking it with Amex Travel using your points.
2:06:06 On the personal side, I don’t know. I only use my personal Platinum Card for booking flights.
2:06:11 And so you could downgrade it to a gold card and not have it drop off your credit.
2:06:16 Another important thing, most business cards don’t show up on your credit report.
2:06:21 So if you’ve had a business card for 20 years that you don’t use and it doesn’t show up on your credit
2:06:27 report, which by the way, annualcreditreport.com, it sounds like a scammy website, but it’s like a
2:06:32 government-sanctioned website that lets you just check your credit report, I think every week.
2:06:39 Annualcreditreport.com? Is that your phishing site to steal everyone’s email addresses?
2:06:44 It is annualcreditreport.com. You can get a free credit report every week from Annual Credit
2:06:49 Report. It’s authorized by the government. You could see what cards are on there. You won’t get
2:06:55 your credit score. Most credit cards give you a free credit score. Credit Karma gives you free credit
2:07:01 scores. There is a difference between the FICO score, which is a private company that looks at your
2:07:05 credit report and comes up with a score, and then the Vantage score, which is an alternative.
2:07:11 You can go down my credit report score episode if you want to go down there. But yeah, I would say
2:07:15 you could go look, but business cards won’t have an impact when you cancel them because they usually
2:07:22 don’t show up on there. So question, looking at credit score is something I feel like I can wrap
2:07:28 my head around. What good is my credit report without a credit score? What are you looking for in that?
2:07:33 So your credit report is literally just a list of all the accounts, their status,
2:07:40 recent balance, all that kind of stuff on there. And so I would encourage people to freeze their
2:07:44 credit report because it prevents other people from opening up credit in their name.
2:07:49 I would remind you that if you’re going to apply for a credit card, you should unfreeze it while you
2:07:53 do that, or you will most certainly not get approved because they need to access your credit report.
2:07:58 But the report is the thing. What happens is there’s a company called the Fair Isaac Corporation,
2:08:05 which is FICO. They basically look at your credit report and then have an algorithm that creates a
2:08:10 score that makes it easier for lenders to make decisions off of so the lender doesn’t have to
2:08:15 analyze this multi-page document. I wonder what will happen to that with AI.
2:08:20 What a person would do with their credit report is just, does everything on here look good? Is there
2:08:24 any credit I don’t recognize? Are there cards open I didn’t know were there? But practically,
2:08:28 there’s not a lot you do with your credit report. Yeah, got it.
2:08:35 So don’t cancel your oldest cards. Open new cards if you see an awesome bonus. For me,
2:08:42 75,000 plus points is a pretty lucrative bonus. So I like that. And you can product change cards.
2:08:47 So if you have a card and you don’t really care about earning a new bonus, but you just want to
2:08:48 have something different, you can change it around.
2:08:57 How important is it for long-term marriage stability for both people to be either into or
2:08:59 not into all this type of arbitrage?
2:09:06 I got some flack from someone in a podcast review because they got mad that I referred to my wife as
2:09:10 a player too. They’re like, we’re not living in a simulation. This is not a video game. And in the
2:09:17 points and miles world, the player terminology is just like standard nomenclature. But it is very common
2:09:23 for people to have one person who’s like the primary and another person who’s kind of like,
2:09:30 just tell me which card to use. And I would say this is a fun game in that one plus one often equals
2:09:35 more than two. So when you sign up for a card, you get a bonus. Sometimes you can refer someone,
2:09:40 they get the bonus, and then you get the bonus for referring them. So I know lots of couples who will
2:09:46 like both open a card, but one will refer them and they’ll end up with like two and a half times as
2:09:51 many points because of the referral plus the signup. And if there’s a great hundred thousand point bonus,
2:09:56 two people can have it. They’re completely separate on your credit report because they’re separate
2:10:02 people. So playing the game with a partner can be fun. I will advise you something that I have learned
2:10:11 the hard way ish. Just keep your spouse as informed as they want to be. Sometimes I’ve had fun conversations
2:10:15 with my wife and she’s like, is this the credit card that you opened without talking to me? You know,
2:10:19 like, you know, I was like, no, no, I talked to you about it. Like, I would say keep them as informed as
2:10:25 they want to be. But you don’t need both people to be as involved in the game.
2:10:30 Here’s a maybe overarching question. It seems important. What have you found to contribute to
2:10:40 enjoying travel? Because this whole thing seems to kind of hinge on traveling by and large,
2:10:46 some form of travel. And it seems like you get the most bang for the buck if it’s long haul
2:10:53 international travel, which means if you don’t enjoy those trips, there are some questions that
2:10:56 come up about why you’re playing the game to begin with, right? Why are you a player?
2:11:01 And maybe it’s for the love of the arbitrage. And that’s actually the part that you enjoy more than
2:11:10 the redeeming of points. But let’s just say that you’re using the outcome to drive the process rather
2:11:15 than simply enjoying the process. What have you learned about enjoying travel? And are you able to
2:11:21 enjoy travel once you’re traveling? Or are you also constantly looking for like price arbitrage and
2:11:26 getting the most value out of it? I think the bulk of the trip is the cost of the lodging and the cost of
2:11:31 the flights. And so once we’re there, I’m not thinking about it that much. I’m just trying to enjoy the place
2:11:38 we’re at. And in some ways, like we’re about to go to the new Waldorf Astoria in Costa Rica. And in some ways,
2:11:44 I’m like, look, the rooms were free. We use six Hilton free night certificates. The flights were free.
2:11:50 We use United and American points. So if we’re going to spend like what is probably an overpriced
2:11:55 amount of money on food, so be it. You know, like everything else was free. So in some ways,
2:11:59 it helps me enjoy the trip even more. Now I did decline. They were like, do you want to go on this
2:12:05 tour of the rainforest? You could do it by helicopter and it’s only an extra $9,000. We declined it.
2:12:08 Like I wasn’t so in the moment that I was willing to spend anything.
2:12:13 Let me push on that a little bit. Like you could, it would hurt you psychically to do it,
2:12:19 but you could do that. Do you think you will practically speaking, have you ever had an
2:12:24 opportunity to do that before? And when do you think the next opportunity would be? Like,
2:12:31 is that not something in the interest of a life fully lived? If you can afford it,
2:12:37 you’d have to stomach it, but like you could withstand the financial cost. Why not do that?
2:12:43 So I did an episode with Bill Perkins who wrote a book called Die With Zero. And so this like
2:12:49 comes to me very strongly. It was one of my favorite episodes. And I think that if there
2:12:54 were an experience that I thought was going to really be magical, I would be willing to spend
2:13:00 that number of dollars. In this case, it was like, do you want to go on a two hour drive or take the
2:13:06 helicopter for $9,000? And I’m like, I don’t know. I haven’t been to Costa Rica in 20 years. My wife’s
2:13:11 never been to Costa Rica. I’m sure it’s also interesting from above, but sometimes driving
2:13:17 two hours in another country is also interesting. Stop at a random restaurant on the way. So it didn’t
2:13:22 feel like the experience was so much better. It almost seemed more like, well, if you just don’t
2:13:29 want to spend two hours exploring this country. So in that case, I don’t think it would have made sense.
2:13:34 But in other cases, if that’s just what it costs to do a thing that I really want to do,
2:13:35 I’m okay spending it.
2:13:44 What’s the last example of you just paying straight cash, no points, no miles, but like splurging on
2:13:47 something where you’re like, totally fucking worth it. Would do it again.
2:13:51 I was talking to someone and he was like, we recently went to the Four Seasons in Lanai.
2:13:58 And he’s like, it was everything I ever wanted a hotel experience to be. The hotel was perfect.
2:14:03 And he took his kids. We have two kids. And I was like, that sounds magical. I was like,
2:14:07 we don’t have any plans for spring break. I was like, I want to go to the Four Seasons in Lanai.
2:14:12 There’s no points deal for the Four Seasons. They don’t have a loyalty program. Like there are ways.
2:14:18 We have this hotel program on our site where you can get some perks, like you get a free breakfast,
2:14:24 but there’s no way to get the price of the hotel covered other than just cashing your points out
2:14:29 and spending money. Like there’s just no trick, but something stuck with me, which like, this is the
2:14:34 best experience. It’s everything you ever want to host. I was like, I want to feel that. And so we just
2:14:39 paid cash. Like we just went to the hotel. We paid cash. When we ate meals, we paid cash. Like,
2:14:47 did we use a, like a luxury hotel program to make sure we got certain like extra bonuses included?
2:14:51 Sure. Did we get a hundred dollar property credit? Yeah. But when we went to, they have a
2:14:57 Nobu there. Like, did we not order what we wanted to eat because we had to pay for it? No. Like we just
2:15:03 spent all the money we wanted. Like we just decided that this three night stay at this hotel, we are just
2:15:07 going to not worry about the cost and we’re going to do what we want to do.
2:15:15 What did that feel like for you? I have so many questions, but just as someone who does that
2:15:21 not incredibly frequently, what did that feel like for you guys? Was it like, wow, it’s so nice not to
2:15:26 have that like analytical overlay of all the other stuff. Was it like with every bite, you’re just
2:15:29 like, Oh God, getting a slight punch in the testicles.
2:15:32 10 years ago, it would have been a slight punch in the testicles.
2:15:37 Did you have like an expense hangover where it’s like, you know, you got home and you felt like
2:15:40 you just did a bender in Vegas and you’re just like, Oh fuck. You know, it seemed like a good
2:15:42 idea at the time. Like, I’m just wondering how it felt.
2:15:49 Honestly, the takeaway, my wife was like, we should do that again. Like that was great. Like we just
2:15:55 didn’t think about it. And I will say one of the nicest things about that experience that makes it
2:16:02 even better is that hotel. During the time we went, they were doing some construction. So they were like,
2:16:09 Oh, activities are included. And you’d be surprised at how many higher end properties don’t nickel and
2:16:13 dime everything. It’s like, Oh, we include free breakfast. And like, you could just eat whatever you
2:16:19 want. It’s not the Marriott free breakfast where you get a $15 certificate off the meal and you go
2:16:23 to the pool and like sunscreen and aloe are just like free flowing. Like you don’t have to buy them
2:16:31 at the gift shop and stuff like that. Your room has bottles of water. In a way, we kind of paid for it
2:16:36 at the beginning. And so once we got there, most of the expense was covered. There’s this book,
2:16:42 Happy Money. And in it, one of the five kind of scientific ways to spend money that make you happier
2:16:47 is to prepay for things. It’s like when you pay for this hotel in advance and a lot of the stuff’s
2:16:52 included, you don’t even really think about it. And so that was really nice. Do I want every vacation
2:16:58 to be as expensive as that vacation? No. Don’t want every vacation to be that great? Yes. And so it’s a
2:17:05 balance. Like I know that staying at Capro Cop was a similar experience. If anything, it was maybe even
2:17:10 nicer, but we didn’t have the kids. It was a different vacation. And we did do that one with points.
2:17:15 So it’s a balance. You can alternate between the two. But I think it’s given us permission
2:17:24 to spend. Learning the art of spending, like learning how to spend money as a frugal person is hard. And we
2:17:30 could probably have another two-hour conversation about that topic. And I think I’ve slowly learned
2:17:36 how to spend money at levels that are probably still behind the average for someone in my situation.
2:17:43 And I think it’s easier to do when the experience is something that I just know there’s not an
2:17:48 alternative. It’d be really hard for me to spend $10,000 a person on a flight to Japan in business
2:17:54 class because I just know how to get that exact flight, maybe with more constraints, but I know how
2:18:00 to get that exact same thing. But restaurants is a good example. I have no issue going to a restaurant
2:18:07 and spending a lot of money on a meal. There’s not a way to do it more optimally. Am I using the right
2:18:14 card to get the most points? For sure. I’m optimizing where I can, but I’m not choosing to only go to the
2:18:18 restaurant that I could buy a gift card on sale for. If you go all the way back to the beginning,
2:18:24 my goal wasn’t to save money because I could just not eat the pizza. My goal was to get the pizza like
2:18:29 everyone else and not have to pay for it or get the best deal for it. So at the end of the day,
2:18:34 I still operate on the principle. I want to do the thing I want to do. I don’t want to sacrifice the
2:18:38 quality of life, the quality of the experience. Sometimes you can do it. Sometimes you can’t.
2:18:44 Let’s hop back to Bill Perkins for a second. So you mentioned die with zero. Subtitle,
2:18:50 getting all you can from your money and your life. And I’ll just give a quick line on it. The
2:18:56 question, since I’ll buy you some time, is going to be what most stuck with you or stuck out to you
2:19:03 about your conversation with Bill. Very interesting book. I’ve read it. And here’s the description.
2:19:07 This is diewithzerobook.com. So die with zero by legendary energy trader, Bill Perkins,
2:19:12 details the thought-provoking framework for maximizing net fulfillment over net worth.
2:19:20 And I believe this is from memory, but that I believe Bill used to work with John Arnold,
2:19:25 who’s a fascinating character. There’s a really great interview of John Arnold on Peter Atiyah’s
2:19:35 podcast, actually, who was also a legendary energy trader, became America’s youngest billionaire in
2:19:41 2007 at the time. Super genius. But coming back to Bill Perkins, what’s the basic premise of the
2:19:49 book as you would describe it? And what stuck with you or stuck out to you about that conversation or the
2:19:58 book? So the biggest principle is we’re all saving money. And we usually have this attitude of like,
2:20:02 I’m going to save it and spend it in retirement. Most people end up not spending as much as they think
2:20:07 they will because their bodies can’t do all the things that they once wanted to spend their money on.
2:20:13 And lots of people end up with more money than they wanted. And we should use that money. And we should
2:20:19 ideally use it at times of our lives when we can get the most out of it. And there’s a bunch of
2:20:23 concepts in there, like the concept of memory dividends, where it’s like you actually benefit
2:20:28 from doing this thing earlier because you can relive the moment, retell the story, share it with the
2:20:30 people you went on, and, you know, look at the pictures forever.
2:20:37 And it was a very lightbulb moment for me because I had always been like tracking net worth,
2:20:42 grow net worth, have more, have more. And at the end, I was like, oh, I left the interview.
2:20:48 And I was like, why am I doing that? In fact, we took a trip. At the end of the interview,
2:20:53 he challenged me to do something. And we literally planned a trip right after the interview. We’re like,
2:20:58 let’s just spend the money. Let’s go on the thing. And everything kind of changed. And I was like,
2:21:05 why save more? Obviously, if you don’t have any savings, it’s good to save. But if you do have
2:21:12 savings, what’s the upside of having more money when it could be using that money now and not looking at
2:21:21 the scoreboard? And so I think we started thinking, if we’ve put aside enough that our savings can grow
2:21:28 to what we will need whenever we stop working, and there’s this concept of Coast Fi or Coast Fire,
2:21:33 which is, you know, you could go search and dig into that, then we should really be spending our money
2:21:34 instead of saving.
2:21:40 Wait, wait, wait. Hold on. So Coast Fire. Now, Fire is the Financial Independence Retire Early, right?
2:21:42 Yes. What is Coast Fire?
2:21:47 Coast Fire is this idea that I haven’t saved up enough that I could stop working today. But I’ve
2:21:52 saved up enough money that I don’t need to contribute to my savings. If you’re 35 and you have a million
2:21:56 dollars in the bank and you want to work till you’re 60, if you don’t touch that million dollars,
2:22:00 it’s probably going to be more than enough for you to retire. So you probably don’t need to keep
2:22:07 contributing to your savings. So you can adjust your life so that you can coast into retirement.
2:22:13 And maybe that means stop doing the really hard job that pays a ton of money and do the easier job
2:22:17 because you don’t need the extra money to contribute to your savings. Or maybe it means
2:22:19 stop saving and spend more.
2:22:25 Is the underlying or one of the underlying assumptions there that that million dollars
2:22:32 is invested in a low-cost index fund with a basket like the S&P 500, something like that?
2:22:37 Yeah. That would be the principle. It’s like, my money will grow at some reasonable rate.
2:22:44 What books or thinkers have you found… If you were going to give people a few books,
2:22:48 not many, but a few books, let’s just make them books for the time being.
2:22:55 Books that you would give someone to help them develop a aware, like a conscious approach to money,
2:23:02 and also a fulfilling relationship with money, right? Which is not automatically the same thing
2:23:04 as the former. Any books come to mind?
2:23:10 So I like Happy Money, which is a really short read. It’s the science of smarter spending. It’s just
2:23:16 like five ways you can spend money that actually lead to happiness based on some research. I like
2:23:21 Sahil Bloom’s book, The Five Types of Wealth, because it just reminds you that wealth isn’t just about
2:23:29 money. So often we get caught up in this world of money is wealth. And there’s a lot of things that
2:23:34 go into being happy and wealthy and all this stuff that just aren’t money. Morgan Howes has got a new
2:23:38 book, The Art of Spending Money, which I think is going to be interesting based on his past book.
2:23:44 Before you mentioned specific money, I was like, a lot of the books that I really like thinking about
2:23:48 are From Strength to Strength, which is an Arthur Brooks book about happiness.
2:23:50 Yeah, that’s fair. That’s fair. I mean, it’s all tied together.
2:23:57 I think if you think too much about money, you just lose sight of the fact that money is a tool to help
2:24:00 you achieve things. And if you don’t have any, it’s a really important tool. But as you have more,
2:24:06 sometimes it just becomes a thing that you focus on way too much. And if you can learn to be happy with
2:24:15 whatever you have, you might not need to chase. And that chasing is so toxic. It’s such a challenge for
2:24:23 everyone. And you’re in that rat race. And I think this isn’t a book. But go dig into the Bureau of
2:24:29 Labor Statistics. Go look at how people actually spend their money. Because I think what you see
2:24:36 on Instagram isn’t reality. And so if you base all your assumptions on how people spend their money on
2:24:42 data that is not true, you might think you’re not in a good place. And then if you go actually look at
2:24:51 what does a household with my amount of wealth or income typically spend on based on actual data that
2:24:56 the US government publishes and gives you for free, you’d be like, oh, wow, not everyone in my situation
2:25:01 is spending $100,000 on a vacation and, you know, chartering jets and all this crazy stuff that I see
2:25:02 on the internet.
2:25:04 Yeah, totally.
2:25:11 Yeah, I feel like there should be a term. There’s a term called orthorexia, which can be applied to
2:25:19 people who are basically unhealthily obsessed with physical fitness or appearance, right? So ortho,
2:25:26 the same ortho you would find in orthopedics. And then rexia, just like anorexia. So orthorexia,
2:25:32 I’m wondering if there’s a term for being unhealthily obsessed with money. I was looking up
2:25:38 in Latin, that’s pecunia, I think. I’m sure I’m pronouncing that incorrectly. But like pecunorexia,
2:25:41 there’s got to be a word. There’s got to be a good one. If not, I mean…
2:25:44 I feel like AI could answer this question fast.
2:25:47 AI will answer that question quickly. I’ll let people play with it.
2:25:53 Where do you disagree with, say, Bill Perkins? Was there anything that you remain philosophically,
2:25:59 not opposed to in a judgmental way, but where you are simply using a different OS
2:26:02 in your own mind? Is there anything that hops out?
2:26:09 I mean, one of the biggest criticisms that he gets is he has so much money, you know? So like,
2:26:15 it’s easy to be like, let’s spend all my money. I have it. And so I think if there’s one thing that
2:26:20 it might be missing, it’s how do you bridge the gap to the stage in your life where
2:26:27 die with zero is not an option, you know? Like, you don’t have a plan yet to get to that point.
2:26:33 And so there’s this book that comes out in a couple months called The Wealth Ladder. And it’s like
2:26:39 these different stages of wealth and what life looks like at each stage and what the priority at that
2:26:48 stage is. And I think the criticism I might give is that you can’t write a book for every stage.
2:26:52 And so someone who’s at like that first stage of wealth, it’s like, they just need to get out of it.
2:26:58 They need to have any amount of savings to cushion them from their car breaking down, from some medical
2:27:04 emergency. And die with zero is not a relevant conversation. And so I think die with zero is a
2:27:10 relevant conversation if you are in a financial situation to save more money than you make.
2:27:14 And you’ve built up a nest egg. And now you can start to think whether the amount of money you’re
2:27:20 saving is enough to change what, you know, your behavior. Like, it wouldn’t have been that relevant
2:27:22 to me 25 years ago.
2:27:28 I mean, brilliant title too. I mean, die with zero. It’s a very provocative position. And I found
2:27:36 myself nodding in agreement with a lot of what was in that book. And I think, I believe in almost any
2:27:40 field, I’ve said this before, but it’s like the extremes inform the mean, but not vice versa, right?
2:27:46 So you can really glean a lot from what people might consider extreme positions. Have you ever read
2:27:53 The Man Who Quit Money by Mark Sundin? Oh, I highly recommend. What is described in the book,
2:27:58 I wouldn’t model exactly, but it raises a lot of really good questions. Just like after you had
2:28:04 Bill on, you got off and you were like, wait a fucking second. Like, why am I doing X, right? Like,
2:28:12 let me step back and ask a couple of questions that didn’t even seem necessary to ask. This book is
2:28:16 quite similar. So I’ll just read a little bit. Mark Sundin, S-U-N-D-E-N is the author,
2:28:21 but The Man Who Quit Money. And here’s the description. I’ve actually read this book multiple
2:28:27 times, which says something. Very fun to read. Super strange. So here’s the description.
2:28:33 In 2000, Daniel Swello left his life savings, all $30 of it in a phone booth. He has lived without
2:28:38 money and with a newfound sense of freedom and security ever since. The Man Who Quit Money is an
2:28:41 account of how one man learned to live sanely and happily without earning, receiving,
2:28:46 or spending a single cent. Swello doesn’t pay taxes or accept food stamps or welfare. He lives
2:28:51 in caves in the Utah Canyonlands, forages wild foods and gourmet discards. He no longer even
2:29:00 carries an ID. It goes on and on and on. It’s so extreme, but very eye-opening because it starts
2:29:06 to poke at these base assumptions that we have, which we do not realize are assumptions half the
2:29:12 time because they’re so present. And it’s a fun read. It raises a lot of worthwhile questions.
2:29:18 And I think some people think the more you talk about and know about money, the more you think
2:29:23 about it. And I’m like, nope. I’m very much the passive index investor. It’s like, let’s put the
2:29:29 money in, let it grow. And like we started talking about stuff, let’s focus on either making it or enjoying
2:29:35 life and all this stuff. So I try to set most of my finances on pretty autopilot so that I don’t have
2:29:39 to think about the money on a day-to-day basis. And that’s not to say it’s not important to know
2:29:44 how much you’re spending and what you’re saving and all those things. But it’s not something where I’m
2:29:48 logging into a brokerage account every day and doing all that kind of stuff.
2:29:56 So let’s pretend that you can’t do all the hacks anymore. Podcasting isn’t a thing. Or at least
2:30:03 podcasting, websites, you cannot play the content game in the way that you’re currently playing it.
2:30:09 If you had to start another company or get a job, work in another company of some type,
2:30:16 what might you do? So you’ve tried a bunch of different stuff. And I appreciate how you think
2:30:20 about things very deeply. So if you couldn’t do what you’re currently doing, and you couldn’t
2:30:25 create a clone of it, you can’t do anything that’s like a close cousin. What might you do?
2:30:31 We’d be on the short list. If I couldn’t do this right now, I would probably take every
2:30:37 little tiny idea I have and try to build the product to solve the thing with all that AI can do right now.
2:30:44 But interestingly, when I ended up at Wealthfront as a product manager, I told people, I was like,
2:30:49 I think I could do this job for 40 years. The idea that my job is to go talk to people,
2:30:56 consumers, understand their perspectives in a space I care about, and just build products to make their
2:31:01 lives easier. That was awesome. The idea that we’re just going to build products that simplify something
2:31:07 that is complicated for other people so that they can just get on with their day and focus on their
2:31:12 life and not get caught up on it. I think if the podcast never happened, I would still happily be
2:31:20 in that job. So I don’t have the kind of ego of I have to work for myself. I need to go do my own
2:31:26 thing. I think I just like building stuff. And so I’d be building something. I don’t know what that is.
2:31:32 And a couple of the ideas I’ve had in the recent past are all kind of tangential to what I’m doing.
2:31:37 So they feel like a cop out if I told you, oh, I just start a blog reviewing financial products.
2:31:42 It’s like, well, it’s kind of like, similar to what I’m already doing, or, you know, build a future
2:31:46 travel agency. Yeah, well, we kind of do that on the side. Like, I don’t know what that would be.
2:31:49 Everyone always tells me, Chris, you should go launch a credit card, because like, you have all
2:31:55 these opinions. But I think at the end of the day, the economics to make it work, and be competitive,
2:32:01 just require an immense amount of scale, that I don’t know if I have it in me to go do that thing,
2:32:04 like give up 10 years of your life to go build this crazy thing.
2:32:09 Sounds really unpleasant. I mean, what would be the reason to do it? Sounds very uncompelling.
2:32:13 I don’t know. I feel very much like the Mexican fisherman a little bit, where it’s like,
2:32:18 there was a time in my life, and for anyone who doesn’t know this parable, which I’m guessing
2:32:22 you’ve referenced in the past. It was in the, yeah, version of it was in the four-hour workweek.
2:32:27 Yeah. The idea that this guy’s a happy fisherman, living his life, fishing all day,
2:32:29 hanging out with his friends, spending time with his family.
2:32:33 Playing guitar over beers at night with his family and friends. Yeah.
2:32:36 Someone’s trying to convince him to go build a bigger and bigger fish company. And then he’s like,
2:32:40 and at the end, what do I do once I’ve done that? He’s like, well, now you can hang out with your
2:32:44 friends and fish and go drink beers. And he’s like, well, that’s what I’m doing already. I don’t think I
2:32:50 have a thing that’s compelling me to be the business person in that story right now. And until there is,
2:32:55 I don’t like forced entrepreneurship, like forcing myself to build a thing because it’s
2:33:02 what I should do. And I would probably spend a bunch of time playing around with tools and data
2:33:09 until I found a thing that pulled me in that direction. And until then, I’d happily go find a
2:33:15 company working on a problem space that I’m interested in as a product person and just building products in
2:33:20 that space. Amazing. All right, Chris, where can people find what you’re up to? What would you like
2:33:26 to point people to? I have a podcast. We talk about all these things. Every topic that I probably brushed
2:33:32 on, I’ve probably gone deep on. And it’s called All the Hacks. You can find it anywhere, wherever you’re
2:33:37 listening to this. Everything I do is at chrishutchins.com or allthehacks.com. It’s the same
2:33:44 URL. And every week, I send a newsletter on Saturday morning that’s just all the stuff I’m finding.
2:33:51 Where are points on sale? What routes on certain airlines are going on promos right now? What’s
2:33:57 changing? So if you don’t want to go so far down the rabbit hole, but you kind of want to stay on tune
2:34:03 where the deals are, you can sign up at allthehacks.com. Well, Chris, thank you very much
2:34:06 for the time. I have a copious amount of notes. I’m going to have to sit down and figure out what
2:34:11 exactly my next steps are, which I think I have some inkling of. So I might have to chat with you again
2:34:17 to do post-game analysis a little bit on some of this. But thanks for taking the time, man. I really
2:34:23 appreciate it. Yeah. I hope people that are listening can just earn more and make good value out of it
2:34:29 and live happier lives. Thanks for having me. Yeah, absolutely, man. And folks,
2:34:34 we will have all links to everything in the show notes as per usual at tim.blog slash podcast.
2:34:41 Just search Chris’s name and I’ll be easy enough to find him. And as always, be just a bit kinder
2:34:47 than is necessary to others, but also to yourself. Until next time, thanks for tuning in.
2:34:54 Hey guys, this is Tim again. Just one more thing before you take off. And that is five bullet
2:34:58 Friday. Would you enjoy getting a short email from me every Friday that provides a little fun
2:35:03 before the weekend between one and a half and 2 million people subscribe to my free newsletter,
2:35:09 my super short newsletter called five bullet Friday, easy to sign up, easy to cancel. It is
2:35:15 basically a half page that I send out every Friday to share the coolest things I’ve found or
2:35:19 discovered or have started exploring over that week. It’s kind of like my diary of cool things.
2:35:25 It often includes articles I’m reading, books I’m reading, albums, perhaps gadgets, gizmos,
2:35:30 all sorts of tech tricks and so on that get sent to me by my friends, including a lot of podcast
2:35:38 guests. And these strange esoteric things end up in my field and then I test them and then I share them
2:35:44 with you. So if that sounds fun, again, it’s very short, a little tiny bite of goodness before you
2:35:49 head off for the weekend, something to think about. If you’d like to try it out, just go to tim.blog
2:35:55 slash Friday, type that into your browser, tim.blog slash Friday, drop in your email and you’ll get the
2:35:57 very next one. Thanks for listening.
2:36:03 Not to be a salty old dog, but then again, that’s what I am. But in the early 2000s, back in the day
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