Deal Master Chris Hutchins — Helping Tim Burn 15M+ Miles and Points

0:00 San Francisco to Tokyo in economy on June 5th. 37,000 points. 37,000 points if you redeem them for Amazon gift cards might get you $222. That's nuts. What are the other tools that you would recommend? Points. Yeah. You go to the Daydream Explorer feature and they just give you a map of the world and you say, "Hey, I want to go to a beach in first class from the United States. Take me there. It'll be like, "Oh, well, did you know that this summer I could go to Lisbon for 45,000 points, but not in coach, in business class." So, you want to go to Lisbon in business class for what Amazon equivalent would have been like $275. You know, anyone listening probably

0:45 knows you're not finding $275 business class tickets to Europe in the summer. And there it is. So, Chris, as the caffeine's hitting my bloodstream, and we can treat this as a warm-up, who knows? It'll might make it into the final cut. The goal here, multiffold, so shall we call it goals, is to figure out what on earth I should do with my Frankenstein of points and miles and so on that I've accumulated over my adult life since college basically. Y that's one. The other is to make sure that it doesn't get into the conversation such rarified air that people are just like, "Wow, this is a great conversation for the 0.01%." Right? Which I actually don't think

1:32 we're at too great a risk of because and we'll get to the total tally and so on. Effectively, as soon as I began starting businesses, I put everything on my cards. So advertising, monthly spend, trade shows, anything and everything that I could put on the cards, I put on the cards. And you of course are a nthderee black belt in the Jedi arts of points and various types of arbitrage and trade and just general skull duggery. Excuse me, not skull dug. I just had to use that because Mike Tyson likes that word. And there are levels and then there are

2:17 levels, right? I would like to think of myself as pretty aware of how to find shortcuts here and there. And it's not really shortcuts that we're looking for, but kind of clever, elegant, not just techniques, but hopefully we'll get to some principles overall that will allow people to deal with what I think is a very common headache. Because in my case, I've accumulated all this stuff and every time I look at my points, and we're going to get to some of your shenanigans in a second cuz I want to hop straight to a couple of real life examples that seem insane. And people look at these points. I look at these points and I'm like, number one, I have no idea what to do with these. Number two, I assume they're basically

3:03 worthless. Number three, I feel like I've lost a sucker's game every time I look at them. Does that make sense? Y that I've sort of signed up for a game that in the end it's like wandering through a casino. The house always wins. And for all of those reasons, plus just the general brain damage of trying to figure out what to do and do they make it difficult like an insurance claim, whatever. 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 too hard, too complicated, don't want to deal with it. And then I exit the side door and then I'm right back to where I am today looking at this balance of points and stuff. So that's my confessional part

3:49 one, but let's start. There's so many different places to start, so I'll let you choose. And I think it's fair to say for the record, and you've been very transparent about your finances and stuff. It's not like you're driving around in a fleet of Bugattis, a different color for every day of the week, that you have a private hanger of 17 jets. Like, that's not your life. You've done very well. And I don't know if it was at the same time prior to or after we recorded that mega marathon on podcasting. you wanted to ask me a bunch of questions and so I was like, "Hey, let's just record it." But you've gone fulltime in the all the hacks

4:35 ecosphere. I guess this is all to say I'm trying to set a reference point for people listening for you, right? Because they might assume that you're like Kevin as in Kevin Rose or that you're venture capitalist or that you have tens of millions, hundreds of millions of dollars and therefore the numbers that I'm about to give, they might discount. and I'll just throw those out and then you can take this tangled mess of an introduction and do with it what you will. So, you bought 300k worth of gold at Costco in the past year. And I'm like, wait, what? You could buy gold at Costco, first of all, and then there's the amount. And then I was asking you about Amazon related arbitrage, and you're like, "Yeah, well, that's fair game, but it doesn't really happen or work

5:22 anymore." But I did buy $1 million of gift cards in January. 1.02 million to be precise. And I'm like, what the hell? Okay. So, that is one of the messiest on-ramps I've ever offered a guest. But why don't you take that I think you understand the intention behind it, which is like let's give some crazy examples and let's also ground in reality kind of who you are. So, these numbers are able to be put into some kind of context. I think that the the easiest way to explain both those stories and who I am in kind of a very concise way is that I really like the arbitrage of anything. And you know, I kind of grew up in the, you know, maybe upper middle class, middle class, but I

6:07 went to a private school and my parents didn't give me money, right? They weren't like here's my credit card like many people I knew did. I was always like, how do I kind of keep up with the Joneses per se, but like I didn't have a credit card to take debt out on. like there were no other options. So, you know, I was finding these arbitrageages early when I was like, "Oh, kids like pizza. I want pizza. I don't have money for pizza. Let's order pizzas to school, sell slices, and eat my profit so I get free pizza every night." It was kind of like I've always been thinking in the back of my head, how do I do the thing that everyone else with all this money and all these resources does? How do I get to do that even though I don't have the resources? And so, that's been my MO for life is I don't want to sacrifice, but I also don't want to go into debt,

6:53 you know, or just spend money I don't have. So, you mentioned gold, you mentioned gift cards. The gift card thing was interesting because, as is sometimes the case with venturebacked startups, companies are willing to take investor money and sell things at a loss and lose money to grow. And there was this weird window late last year, early this year where there were ways that if you were creative, you could buy gift cards, a huge discount. Gift cards to where? What kind of gift cards? There was an app called Pepper. Okay. And they were selling gift cards for a discount in a convoluted way. They'd be like, "Well, you could buy Amazon gift cards. You could get a $500 Amazon gift card for $500 and then we're going to give you 30x points in 14 days

7:43 that you can redeem for other gift cards. But they were holding the best deals for the biggest spenders. So like the average consumer wasn't getting the best deal. And I just realized that I don't necessarily want to take on the risk of if this company goes under, they owe me 20, 30, 40, $50,000 worth of points. But there were lots of people that did and they didn't want Amazon gift cards. So, they were willing to sell them at a loss or not at a loss, at a at a break even. They were like, "I'll buy Amazon gift cards for what at the end of the day will be 20% off and I'll sell them for 18% off." Mhm. And I was like, I can do much better trying to arbitrage that than take on a lot of risk. I I literally sent an email out to my list and said, "Hey, who wants to buy gift cards?" And I set up an e-commerce site and we were selling Amazon gift

8:29 cards at 10% off. Now, who doesn't want 10% off Amazon? Why not? But I could buy the Amazon gift cards for somewhere, depending on the day, between like 12 and 15% off. And so people were stoked getting 10% off Amazon. I was stoked cuz I was making a little bit of a profit. But even better, I could buy all those Amazon gift cards from people with a credit card. So I spent a million dollars. I probably made, you know, 2 million points buying those million dollar of gift cards and then a little bit of profit on top of that. And then everyone that bought them was like, I'm saving money on Amazon. So, it was a total win-win because there was this rare moment where gift cards were selling at ridiculous prices. And that's still true today. Maybe not as ridiculous. But just so people don't

9:16 think, oh, I missed the boat. This is never possible. Anyone that has a credit card, whether it's MX or Chase, there's all these parts of the website where it's like, here are some of the special offers you you have on your card. Mhm. And earlier this year, AMX had one where it was spend $200 at Lowe's, get $50 back. I don't need anything at Lowe's, but I had that offer on seven different cards. So, I took my daughters, we went to Lowe's, we bought seven $200 gift cards to Dick Sporting Goods, and then we just resold them for like 91 cents on the dollar, but because we were getting 50 off each $200 purchase, we were buying them for 75 cents on the dollar. That kind of stuff happens all the time. And so anytime I see something that's extremely on sale, I think, how can I make money?

10:03 Yeah. So, let me hop in here for a second because I imagine there are some people who are like, I'm definitely going to do that who are listening. And then there are people who may be cut from a similar cloth to myself. And this is part of the reason why before we started recording, I said, "Chris, let's get to unraveling the mysteries of the universe." Because I realized much like someone said to me long ago, they said, "If you want to understand somebody, talk to them about money and talk to them about sex." Like once you get into arbitrage and time and value, it kind of opens Pandora's box to everything, right? Philosophically speaking, your beliefs about the world. That might sound like a grand statement, but here's where I'm going. There is a

10:48 religious war foot. You guys may have seen it in the news. I'm not talking about the Middle East. I'm talking about personal finance where you have ultrarugality on like one end of the extremism, let's just say like super super reusing cotton balls type stuff. And then you have on the far other end maybe where I'm perhaps a little bit closer folks who are like just make more money because the upside is unlimited, uncapped in a sense whereas you could only save so much money. But what I'm hoping for today is that we'll explore kind of the whole spectrum, right? Because much in the way going to take a lot of positions in this conversation. Right now, I'm going to be your defense attorney. And the reason I say that is

11:35 that for you, it's turned into your sport. It started off as kind of a survival arbitrage mechanism to keep up with the Joneses, right? Yep. And then it's become kind of a professional sport that you play at the highest level. Much like if I go to Usuzbekistan, which I did long ago, I might try to learn Usuzbck, but like for most people that's [ __ ] ridiculous. Like you'd never want to learn any Usuzbck. It's a total waste of time. But like that's my sport, right? So with all that said, let's talk about the gold and then I have some maybe opening questions that we can that we can get into. So what's the story with Costco Gold? So Costco sells a tremendous amount of gold. I can't remember the stats, but it's got to be on the order of hundreds of millions of

12:20 dollars, I guess, of gold. And it's kind of funny because sometimes you'll check out at Costco and it'll be like, "Do you want this gold bar? It's $3,300." And it's like more than anyone would normally spend on groceries at all. Now, the crazy thing about Costco is that if you have a Costco executive membership, so they have two tiers, $65 and $130. At the executive level, they give you 2% cash back on everything you spend at Costco up to $62,500 a year, which for a normal person is like plenty of cash back. Yeah, I think I see where this amount of gold is coming from. Yeah. But when they sell gold, they don't have a dynamic price. They say, "Today, gold is 3,329.99." And the gold market changes throughout the day. There are times where when

13:07 you're at Costco, if you look up online with buying this gold bar and selling it, what would be the the margin? And I would say you almost never make money. Costco is not selling gold at a price that you could flip it for a profit. But they are giving you 2% back and very often that 2% back makes up the loss you would take reselling it. And you can buy things at Costco with cash. You can buy things at Costco with a debit card. And you could buy things at Costco with a credit card. So, you know, if you were to buy $100,000 of gold and you didn't lose money, you could still keep the points you got from that transaction. But I'd actually argue that if you time it right, you can also make money on the spread because sometimes that spread might be half a percent and Costco's

13:54 willing to give you 2% back and so that one and a half% can be profit. Okay, got it. So, the 300,000 plus of gold basically was hitting the upper maximum of what you could get. Yes. In terms of cash back, when I'm sitting at the checkout counter at Costco, I'm like, "Okay, gold's this price." I look at my phone and I say, "Okay, what could I sell this gold for?" Okay, I could make a profit selling it for getting even points. I could just make a profit selling this gold. Okay, ring up the Costco groceries. Total's 180 bucks. Could you please add five, which is the limit? five $3,500 bars and they're like, "Really? Okay, your total now instead of $180 is like $15,180." And then assuming you have a card with the right limit and your bank's not

14:39 going to decline a $15,000 transaction. Tap to pay. Thank you, Apple, for the simplicity. And and then I literally sell it before I've left the store. Like, I'm not trying to invest in gold. Now, that's my question. Okay. So, the gold is not solid bars sitting in a shopping cart because you there would just be there would just be people hanging outside. No, you get five bars. You do? Yep. Okay. I wish I had them here. I have a rack that holds them. But, as an example, this is a rack from Pamp, which is a Swiss company that just holds bars. So, this rack probably holds 20 bars of gold, 1 oz bars. Okay. All right. Hold on. So, I guess there two questions. So, do you just basically like keep one hand on your concealed carry, which is

15:25 probably not something you can do in California, but then you take like a loop around the store with your shopping cart full of gold and then return it to the store. When you say you've sold it before you leave the store, what do you mean by that? Sorry. So, what I mean is I've gone in and I've locked in the price. Yeah. I did a whole episode, by the way, if someone like wants to go really deep. the guy who runs the marketplace, Pure, Collectpure.com. It's a gold marketplace for all kinds of stuff. Okay. I did an episode interviewing him just about gold and how that works. So, I go in and it's a buying selling marketplace. There's bids and asks and I 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 shipped it off, right? Yeah. I go to the counter, I give them my receipt, I put it in my pocket. For people who aren't

16:11 familiar, an ounce of gold is like three or four credit cards and that's in the packaging. It's even smaller if it wasn't wrapped. And so, you know, it's like six SD cards if it's like unwrapped. I put in my pocket. I usually try to do this earlier so I'm not just like someone's watching me pick up the gold walk out the door and and all that, but I haven't had any issues. And then I go home and I follow their shipping guidelines to drop it off at FedEx. And so it's kind of funny sometimes to go to FedEx and drop a box off knowing there's like $50,000 of gold in the box, but it's insured, so I'm I'm kind of okay with it. Does it cost you more than your cash back to ensure it? The marketplace ensures it for you as long as you ship it according to their requirements. It's like double boxed, taped in a certain

16:58 way. There's some strict requirements because they don't use FedEx for insurance. Obviously, like FedEx would charge an insane amount of money, so they use like a third party insurance. Okay. All right. Got it. Now, this podcast is very self- serving for both of us in a sense, right? So, this is a way that I am able to recruit you to do a lot of heavy lifting on my points, right? We've discussed this. That's transparent. And then it's also a way for you to promote what you're up to, which is fantastic because you've been able to take something that can be very timeconuming and also turn it into a business, which is great. And for people who are wondering because you may not have Chris as a friend who's willing to do this on your podcast, we are going to discuss

17:44 how you can find lowlift approaches or sort of time efficient approaches to exploring a lot of this stuff. For instance, there was a website you recommended, Chris. I know we're hopping all over the place, but I had never even heard of it before. I put it in my newsletter and I'm blanking on the name. Award tool. Yeah. So, could you describe what this is because it's very straightforward and it was simply off my radar of awareness. So, what is this? If we zoom zoom back a while, I think we live in this world where credit card points are easier to get than they've ever been. If we go way way back in history, it's like they didn't exist. Then you could get one per dollar and now it's depend on where you purchase, you could get five points per dollar.

18:29 You can get a 100,000 points when you open a card. And then we were in this weird area for a few years where I was like, well, there's lots of them, but it's very difficult to use them because to get the most value, you have to know all the kind of Jedi mind tricks, if you will. And then a couple companies came out and said, "Hey, we're just going to build tools that are as simple as Google Flights that make it really easy for you to find ways to get real value out of your points." So, there's two sites. There's probably like five or six. I'll give the the three that I like and how they're slightly different. Okay, there's really two things you might want in this world if you're trying to use your points. One is inspire me and give me the best deal. And one is help me find the best way to get from A to B.

19:16 Mhm. Award tool, which is the one you talked about, I think is better for the person who's like, I want to go to Japan. I have a few days of availability that I could explore. I could go a couple days earlier, a couple days late, but ultimately I want to go to Japan. And that's just awardtool.com. awardtool.com. So you could say, "Hey, I'm going from San Francisco to Japan." Or you could even say San Francisco to Asia and I want to go in this window. And it'll come back and say, "Here are the best deals." And you could filter them and say, "Hey, I only want non-stop. I only want to fly in business class or I only have points with MX, so don't show me other options." Mhm. And you get these things where right now from San Francisco and I just looked at Asia, but here's San Francisco to Tokyo

20:01 in economy on June 5th, 37,000 points plus $11 in taxes and fees. 37,000 points if you redeem them for Amazon gift cards might get you I don't I think it's 6 cents. So $222. It is rare that you will find a flight to Japan even in economy for $220. Yeah, that's nuts. Okay, cool. That's the equivalent I was looking for. What are the other tools that you would recommend? The other one that I like is called points. Yeah. Yeah. Like why E ah points. Yeah. Okay. Got it. You go to the daydream explorer feature and they just give you a map of the world and you say, "Hey, I want to go to a beach in first class from the

20:49 United States. Take me there." It'll be like, "Oh, well, did you know that, you know, if you want to go to this place, it's only this much. So, this summer I could go to Lisbon for 45,000 points, but not in coach in business class." So, you want to go to Lisbon in business class for what Amazon equivalent would have been like $275. You know, anyone listening probably knows you're not finding $275 business class tickets to Europe in the summer. Yep. And there it is. 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 want to go. At the end of the day, I would say the more flexibility you have, the more your points will take you way, way further. Yeah. If you come to me and say, "I need to be in Japan and I need to take this one Japan

21:34 Airlines flight and I need it to be on this specific day. What can my points get for me?" Might not be more than you would get just booking the flight on the MX, Chase, Capital One, etc. portal. Yeah. So, let me hop in here. Yep. So, that's the conversion. You mentioned a few things, right, that kind of underscore what makes this whole game attractive to a muggle like me who has not had the inclination, still doesn't really have the inclination to get really deep in the weeds, right? It's like $222 flight to Japan, $270 business class flight to Europe in the summer. Like, yeah, of course I want to do that. I grew up being super ultra ultra frugal, right? So, that hard wiring is still there. So as financial savings

22:20 catnip like that is very very attractive. I hate wasting money. I still way overeat because I'll save leftovers and stuff cuz I don't want to waste food. I mean I'm still that guy who will pack up everything. But this has seemed very complicated. So I'm hoping you can help us uncomplicate it. Before we get there, well let let me give people a snapshot. Right. So, you have through all of your various techniques and tricks and this that and the other thing 22.8 million points, right? Yeah, something like that. And what is my total at the moment roughly? I think you're at 15.5. Yeah. So, it's 15.5 million. Keep in mind, guys, this is for the last

23:06 24 years, right? And I've also frittered some of it away using MX points to buy stuff on Amazon and so on, which would get me a a heavy ruler on the back of the hand from from Dr. Chris, but we'll get to that. Just a few more factoids. I have not fact checked this, so I'm relying on Christopher, but how significant are loyalty programs to airlines? There's a really great video if you want to go deep on this. I'll give you that kind of high level on both loyalty programs to airlines which is kind of frequent flyer miles and it's the craziest thing I think I've ever come across when understanding business. And it's that the market cap of the

23:54 major three airlines American, United and Delta, meaning the total value of the company, they all have a market cap between 6 and 20 billion. The market cap of the loyalty point program explicitly, not the airline, but just the subsidiary of it ranges, depending on the airline, from 22 to$26 billion. So the loyalty programs are worth more than the airline itself. And if you actually back out, so everything that is United that is not the loyalty program is worth$12 billion. There's this common understanding in this kind of points, miles airline world that airlines really exist to be effectively banks for their miles and

24:40 points and then they just have to fly these planes all around the world so that that bank can continue to operate because you know Delta came out and said I think it was a year ago they said in 2023 1% of US GDP went through a Delta MX card. The transaction volume on Delta Amx cards was 1% of GDP or I think they said just shy of 1% of GDP. They didn't give an exact number. Yeah. So every time AMX is awarding these Delta miles, every time you're using your Chase points to transfer to United, they're effectively selling those points to those banks so that they can give them to the card holders. The business of selling those points is massive. Yeah. And the profit margins of an airline, just the airline

25:25 part of it, are like laughably small. I think the average profit per passenger for US Airlines on average is $10. And I think American Airlines was the bottom. It was the profit per passenger per year on American is $3.40. So if you're wondering why they sh those credit cards so hard over the loudspeakers while you're trying to watch your movie in peace, this is why. Yeah. United Airlines sold almost $4 billion worth of miles a as part of their business. This is a a little old data, but back in 2019, it's probably only gone up from that. And if anyone remembers during the pandemic, the like airlines were hurting. Nobody was traveling. And so in order to survive, they had to mortgage, they had to

26:11 basically raise money and they couldn't put the airline up. So they all three airlines put their loyalty programs up. that was the collateral and raised depending on the airline like 6 to10 billion each using the loyalty program as their collateral. Okay, this is one of the many reasons right hearing facts like this where I'm like this is a trap. If I enter into the labyrinth there's a reason why these are so profitable for these companies and it's not because the person collecting the miles automatically wins, right? They can't be. No, that's the losing end of the trade for most people. I would have to imagine they're hoping for breakage. They're hoping you get all these miles, you never use them. And I think the original models were 60% would get used or you let them expire as I did. Yes. In

26:57 one case, right, where hilariously, I think I forwarded to you, I got an email from Marriott Bonvoy saying, "Your points are going to expire." And then it gave a date that was months in the past. That was my alert email. I was like, "Well, chronologically, unless you guys have figured out time travel, because I haven't, it seems like I should have received this prior to my points expiring." So, Chris, what would you suggest we do in terms of exploring what I should do with my points? And we're always going to bring this back to what people can use. I think people will pick up a lot. that we can also sprinkle in some crazy point stories, but I think we've given enough of a taste of that that we can kind of look at the actual nuts and bolts of like what do you do?

27:44 I'm looking at this print out and I'm like, makes my head hurt just to look at all these airlines with all the points, right? Well, break the landscape into there's two obvious buckets that people are going to be familiar with. You have airline miles that are linked to a program. So, you have some Alaska, some American, some Delta, and some United. Four major US carriers. Y you've got hotel points. I'm not going to tell you what to do with yours because they all expired. Got some international airlines, but whatever. And then you have bank points. And I'm going to call them transferable points. And the thing that I really like about transferable points, just to set the difference in people's mind and why the kind of street value is higher, is that American Express, let me pause for a second just

28:30 to say right like by bank. Yeah, American Express, Capital 1, City Bank, y Wells Fargo, now Chase, MX will let you move your points to 18 different airlines. So you can move your MX points to Delta, you can move them to Air France, you can move them to Air Canada. The reason why people love them is when we go back to these tools and you're searching, gosh, I want to find a good deal to Europe. Well, sometimes that good deal might be a deal with Air France. Sometimes that good deal might be a deal on United, but it's even better deal if you book it through Air Canada, which is a partner of United. When you have the flexibility to take your points and put them anywhere, not anywhere, but to 18 different airlines or five different hotel programs, it just increases the

29:16 likelihood that you will find a good deal. So, I love accumulating transferable points because it just spreads out the service area of places you can find deals. Yeah. That said, the best value that anyone's going to find from their points and miles is on this kind of aspirational travel, meaning longhaul, international, business and first class, luxurious five-star hotels and resorts. Because airlines, while this is a shift, they haven't fully shifted to the point that a business class ticket might cost 10 times the dollars, but it might only cost two times the points. And a really nice luxury resort might be 10 times the cost of the Holiday in downtown, right?

30:01 If you're paying in dollars, but it might only be three or four times the cost in the number of points you'd need. That's where you're going to get the most value. That doesn't mean that if you're someone who's only traveling domestically, you can't find good value because there are a lot of cases where you're flying between small airports, you're flying during the holidays, you're flying last minute, and you'll see a flight where it's just astronomically expensive for what it should be and it's a great deal with points. I'm realizing, I guess, a couple of things that I'll throw out there to act as a standin for some listeners, right? So number one is that and I want you to poke holes in this or it can just be fodder for conversation because I'm realizing that our conversation is always meaning the last handful of weeks at

30:47 least focused on what the hell should I do with all these points like staring at this just makes me feel like a sucker playing a sucker's game or someone with undone homework and they expire, right? Which is ridiculous cuz it's engineered. Some of them some of them expire. But I've realized that there's how to use the miles and then there's how to accumulate them. Now, I have not focused on the accumulate because 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 folks certainly why haven't I done this to date? Time, right? So the MX is, let's just say using the MX on Amazon, it might be a bad trade on the value per point if I assume my time is worth $0, right? But

31:34 if it takes me an hour to do something to get a bunch of stuff organized to find a better value per point, it could be a Fouian bargain if my sort of value of time per hour is high enough. Right? So that's always been sort of the crux of the challenge for me. And also I should say just for people listening, we can assume that my hotel points are usable even though they've expired if that is in any way informative to the conversation. And also, I just want to explain one of the motivations for reaching out to you was not just how do I use these points, but like is there anything crazy I could do with these points? And I'm not convinced there is. And there may be things that I can do

32:19 that seem crazy that are just a poor use of points, right? But I was like, "Okay, I realize I could use some of this for travel, but I can also afford to pay for travel, which doesn't mean I should pay dollars instead of points if I'm just looking at the kind of value per point. But is there something big and nutty I could do? Like one trip where I just blow all of these points?" Let's start there because I think the reason why the points game is exciting in the first place is that it feels like it's free. Right now, I could poke a hole in that and say if you just used a cashback card the entire time, instead of having 12

33:05 million points, you probably would have been sitting on $300,000 depending on the card you were using. And if someone had done that, they would probably feel very differently about taking $300,000 they've saved and blowing it with no regard. Whereas if they had 12 million points that in their mind, you know, could not fund their kids' education, pay their mortgage, etc., why not blow it on some wild vacation or something else? So there's this psychological element of I've earned these things. They are not dollars. Why not spend them flying Emirates first class, taking a shower in the sky, you know, eating caviar and sipping champagne? Why not do that? Because it's not like I'm dipping into my kids' college fund where where

33:52 it might feel differently if they had earned cash back the whole time. Oh, it would feel totally differently. I wouldn't even do it necessarily. But those points are so constrained that it's like okay if the only place that I can use these is in say travel. It's like well they either never get used or they get used but I can't apply them to paying off my mortgage or paying for my kids college tuition. So yolo. Now I would say in the case of Ammex if you were like my time's too valuable to play this stupid game. I would say two things you could do. one, tell yourself or whoever books your travel to just book the travel using the points instead of using the dollars. And it's not going to take any more work to go on Ammex's site and say New York to LA, business class flight on United,

34:40 book, check out, pay with points instead of dollars, and you'd at least get your 1 cent. You could open up a brokerage account at Schwab or Morgan Stanley and open up one card that's the Morgan Stanley or the Schwab MX. just transfer all your points to your brokerage account. What does that do? Just turns it into dollars. Oh, I see. Depending on the card, what the rate is between 08 and 1.1 cents. But like there is a way that's better than Amazon to just dump them into a bank account where you don't have to think about it and you just have the money. So, I will say like that is an option. And for people for whom that feels like the better path, I would argue that they'd probably have been better off from the start just using a cashback card and getting 2.625%

35:27 which I think is like a good target cash back and never having thought twice about points at all. What's your current favorite cashback card if you had to pick one? US Bank launched this amazing 4% card. you had to put $100,000 in a brokerage account and then they were like, "Oh, wow. This isn't profitable." Like, the amount of money that issuers get from swiping cards is not 4%. It's not even 4% before you pull the margin out for everyone along the way. And so that that's gone. Robin Hood has a card that's 3%. But I've heard some, you know, if you start putting too many business transactions on there, they have problems. The most scalable platform that I'm aware of for earning

36:12 cash back at scale is the Bank of America. I'd say platform. If you have $100,000 with Bank of America or in a Maril Lynch brokerage account, you effectively can earn 2.625% cash back on everything with their unlimited card, their travel rewards card, their premium rewards card. And if you have the premium rewards elite cards, it bumps up travel and dining spend to three and a half percent. So everything you spend on travel and dining, three and a half% back. Everything else 2.625% back. Obviously, that assumes that you have the ability to put $100,000 in a brokerage account. You can just invest it in US treasuries. You can move over a Roth IRA. You don't have to have some

36:58 Meil Lynch broker manage your portfolio. But I would say that is the most scalable thing. You know, I know people with large limits can spend lots of money, don't have cards held up, and transactions not post and points disappear. That I think is a a solution. If you want something even easier, Fidelity has like a 2% cash back card. Mhm. So, if you're not earning 2% back on everything, I would say you're missing out. everyone. I think if you want the simplest solution for everyone, you should say, "Am I at all flexible enough that I'll be able to get good use out of these points?" And by flexible, that doesn't mean I'm flexible in every vertical. You could be flexible that you could book a trip last minute. You could

37:43 be flexible that you have to plan it super far in advance. You could be flexible with the destination, but not the dates. You could be flexible with what route you take, whether you go non-stop or not. So, I'd say if you have any amount of flexibility, I think you could get a ton of value and these tools have made it so much easier. 5 years ago, I'd say, you know, it's tough. Now, I'd say if you were like, I want to go to Europe this summer and we want to book it more than a month out and we're kind of flexible where we go, you can get incredible value that will make a cashback card look like a poor return. But if every time you travel, you're like, I want to fly on this date. I don't want to change planes and I want to go to this city and I want to book it 3 months out. I don't want to have to think about it after that. You probably would be better off doing cash back the whole time. Okay. So, let's talk about

38:30 what I should do with this print out that I'm looking at. It's not actually what I'll do with the printout, but what it represents, which is these various points that are scattered across however many recognizing that AMX is kind of the 800 lb gorilla, right? That's where the vast majority are sitting. Yes. After looking at my full picture, we'll talk about, I guess, a couple of things, right? So, for people wondering, we're going to talk about like what might I do with all this? What do the options look like that pass the sniff test by Chris? And then understanding my like psychological profiling and then also if it could be done again, right, what should I have done? Yeah. Right. So, why don't you

39:15 take us into the land of what might be done with this stuff and the easiest way to do it? So, I looked at all the points and I would say if we focus just on the AMX points, it's the bulk of everything. It's a little bit easier to tell a story. Yep. You got 12 million AMX points. The easiest thing you could spend them on Amazon, they'd be worth $85,000, right? Y you could just book flights. They'd be worth $120,000. Can you just repeat this again? All right. Use them on Amazon. 85,000 12 million 85K. All right. Got it. Then I don't think you should, by the way. Yeah, I know. You could book travel in the portal or transfer them to bank and brokerage accounts. It'd be around $120,000. Just book flights, no problem.

40:01 Okay. If and I think you do have an MX Business Platinum. Yep. Right. You could just book your flights with points in the travel portal. you're capped at how how much you can do a year. But if every year you used up to 2.85 million, which would take you about five and a half, six years, you'd get $187,000. So more than the $120,000. Mhm. And then if you transferred them and booked, you know, aspirational things with airlines on Longhaul International, I think you could get reasonably $250 to $600,000 of value. So that's the range. But what should Tim do? Well, let's come back to that. So on

40:46 the low end, we have use the MX points on Amazon, right? Cuz my credit card's already attached. It's one click. for a checkbox. It's very easy. That's taking 12 million plus points and converting it into $85,000 roughly of value. Right now, on the very high end, longhaul International, we've got 600K or more. I did some quick math just for fun and I said, "Okay, what are some things I've done?" Right? I just looked. We've been to the Conrad, which is a chain within Hilton, the Conrad Bora Bora, an amazing property. We've been twice now. We're about to go to the wall new Waldorf Histori in Costa Rica. So, I looked at those two properties. They have tons of availability using Hilton Points. AMX

41:33 transfers from Hilton 1 to two. So, you'd actually end up with 24 million Hilton points. It would be about 200 nights. So, if we're talking like extreme, what you could do, you could transfer all those points over and book 200 nights at a hotel that would normally be $1,500 to $2,000 a night. Like just to give people's mind, 12 million, what does that mean? Could be 200 nights at like an incredibly high-end beautiful resort. If you wanted to take international long haul, like flights to Japan and Europe in business and first class at redemption values I've gotten multiple times, not once in a lifetime, it'd be somewhere between like 130 and 150 one-way flights to Japan. Let's call it 65 to 75 roundtrip

42:20 flights in business class over an ocean. Observation question. So observation I had this like Shaw Shank Redemption fantasy of sorts to be clear towards the very end of the movie on the beach and I was thinking well one reasonably absurd thing that I could do would be like a 200 night writer retreat to Bora Bora, right? I might end up more like Tom Hanks and Castaway. That that'd be my fear. But at this crazy crazy hotel, right? So that would be one option for just if I just wanted to yolo burn the whole thing. The other I would imagine, tell me if I'm running up against restrictions here, but it's like if I wanted to take you said 150 flights, let's just call it 150 one-way

43:06 flights to say like Japan, something like that. Sure. Yeah. Okay. Now, I guess I'm going to run up against the monthly limits here, but would there be a way for me to do one flight to Japan with 150 people, myself included? Let's address the biggest challenge with getting the most out of these points is airlines do not release every seat available for use with points. Uhhuh. And when they do, sometimes they release them at tiered pricing. So there might be two seats available for 80,000 points and then the next two are 300,000 and then that's it. Y as an example, this trip we're taking to Japan next year, Japan Airlines releases two seats on every flight when they when they open

43:53 the calendar at like 360 days. So even knowing everything I know about the system, the most optimal place to put the points to get the deal, we still booked two seats from SFO to Narita and two seats from SFO to Haneda. So my wife and I are each taking one kid and then we set some alerts. So over the next year, if two seats open on either of those flights, we'll log in and change them. Like the change fee might be $25 on the airline we booked. Yeah. But we couldn't even get four seats on the same flight playing the game as optimally as we wanted. As it stands right now, it's you and one kid and your wife and one kid on two separate flights. Exactly. To two different airports. Oh, [ __ ] I would say I probably have 80% confidence that by the time we take off, we're all

44:38 going to be in business class on one flight. Like, I'm about 80% confident. 80% is pretty good. A general rule here which I'm just going to give that'll be probably pretty helpful to anyone trying to get the most value out of their points is the way I would say people that play the game at my level do it is even if you know these dates no flexibility. One of the great things about points is depending on the program you can book a flight with points and cancel it for no no penalty. Maybe you pay a $12 fee a$25 a $50 fee depending on the airline. There are different rules and I would encourage you just search award cancellation rules by airline and you'll find a list. What I will often do is say look we really want to go to destination X and obviously we love non-stop long haul

45:26 business class. That's the target. But I don't see that now. So let me use some of my points to book a longhaul premium economy flight. And then I will use these tools. Award tool points. Yeah, seats. is another one if you're like a spreadsheet nerd. It's like a little bit more database than user friendly, but it's really powerful. And I'll set an alert and say if two seats open up in business class on the direct flight or four seats, send me an alert and then I'll go book that and cancel the other one. Okay? And maybe I have to pay the $12 fee. The way most people I know do this is they book something that's good enough but not optimal, set an alert and almost always end up with something better. Okay. to the point that we've been at the airport like check in four

46:13 hours before our flight from Paris to London back to San Francisco alert pops up immediately 4 hours before departure cancel that flight book another flight that's Paris direct now you might not like that last minute I don't know exactly if I'm going to take the flight I I planned on but within two weeks of departure all kinds of stuff happens you can get on Lufansza first class you can get on direct flights So, I would say book something that's good enough. Points are often refundable and make it really easy to have speculative bookings and then you get on something. That's it. You're never going to get 150 seats on the plane. Yeah. So, you know, the best version of that would be pick a day and buy tickets for 150 friends to go somewhere, but no one's really going to

46:59 be going to the same place. So, not as far Asia. We'll meet up in Tokyo. We're all flying to Asia. Ooh, Laos. Sorry, pal. You're gonna have to figure it out. Okay, so it seems like then for the bulk of my points that are on MX longhaul, I could go to the MX website, see if I can use points for my already pending international travel, right? Or whatever type of travel I might want to add in to use points. Although I think I'm I'm at this point kind of disincined to do that. My sequence would be find something like award tool, right? Mhm.

47:44 And say, "I'm going on this trip. Let me search it on award tool. Can I use my points?" Mhm. Because chances are you're going to get two to five cents per point on a a good award redemption. Mhm. Nothing on award tool or any of the tools you end up liking. Nothing on award tool. Great. I'm going to go to the MX travel portal and I will book it with my points. And uh because you have an MX Business Platinum, if you're booking it in business class or with whichever single airline you choose, like AMX lets you pick one airline for your annual airline credits. Whichever one you pick, you can book an economy. Also, you book it with points. They'll give you 35% of the points you spend back as a refund. It's the perk of the business platinum card and you'll effectively get 1.54 cents per point.

48:30 So, I would tell you my guess is that if you're not that flexible with your travel, Mhm. that you will one in probably somewhere between five and 10 times find a great deal with your points and the other four out of five, nine out of 10 times you won't. and that over the long haul you'll get a blended rate of your points of probably like somewhere between 1.7 and two cents because that one time you might get 5 cents and then the other times you'll get one and a half cents and over the course of the next 5 years you'll burn through all your points you'll save you'll get twice to three times as much value as you would have using Amazon and hopefully whoever's helping manage your travel can just like have this principle of search for points don't find it use points on

49:16 MX doesn't work pay cash also I should point out to folks A few things. Number one that I do have people who help with travel, right? So I could very easily have an assistant do this and I have still do for people wondering, you know, virtual assistants in the Philippines and so on that this is going to become very different. I would say even in the next 12 months, right? I've already invested in companies that are applying AI specifically to the travel vertical. Most people will be able to use AI agents of some type for a lot of this stuff. I would have to imagine within the next two years it could come a lot faster. So having an idea of the process

50:02 I think will prove very helpful. So we got award tool AMX. So here are my two my two questions right. My two questions are I've got points on Alaska, American Airlines, Delta, Emirates, Tap, Portugal, etc., etc. Is there an easy way for me to just use those for anything? Like zero those out? What is the lowest lightest lift? I guess low makes it harder lift, but you get the idea. lightest lift in terms of using those or is it you know what like hey look you're never going to use those for anything just accept that those are basically sunk costs and they're trying to pull you into the game of accumulating points and

50:49 you Tim Ferris don't need to think about it or is there a tool where it's just like hey I'm never going to use these for anything if I can just trade them in for a [ __ ] box of chocolates and it only takes me 60 seconds I'll take the box of chocolates Is there anything to be done with these? I would say the same principle applies, right? If you look at United, you have United, Delta, American, and American and Alaska are both part of the One World Alliance. Delta's part of the Sky Team Alliance, and United's part of the Star Alliance. Those cover almost, I don't know, if I had to guess, 90% of all longhaul flights you would ever take in your life. Yeah. And so if whoever is looking to book your travel, you're like, "Oh, you want to go to Japan?" way better than any other redemption is just okay. Well, United flies non-stop to Japan depending on where what city you're in.

51:35 So does Delta and American. You're going to get at least probably one cent of value from each of those points. Mhm. Even if you book it unoptimally. United a great deal to Japan might be 80,000 points, but you might also find it for 200,000. But if 200,000 points saves you $8,000, like could you do better? Yeah, but I'd rather use that. do that five times, save 40 grand or you know like it's still a good deal. Yeah. So the same rule applies which is I would say when you're booking a trip go through that same sequence. A lot of these tools like award tool will show you United. We'll show you you know Delta and America. They're not just showing you what you can do with your AMX points. Mhm. And I would say with the caveat that because

52:21 there's no good alternative, right, with AMX, you can always use those points to just book any flight on any airline at at least 1 cent. Mhm. There's no point in cashing out for a box of chocolates. On United, you can only use them to book United and their partners' flights. Mhm. But the flip side is that there is always a price. Even if there are one last seat, they will still sell it to you with points. It might be a lot of points, but you could still use it for that flight. And so I would be blown away if over the next 3 years, you don't take at least one flight that is on each of those airlines. Oh, for sure. Or their partners. Yeah, for sure. And the good news is with United, if you want to book five seats in business class to Japan, it's going to be easier

53:06 to find five seats. It's not going to be as good of a deal, but you know what? If otherwise you're not going to use them, why not? Yeah. Also deal. There's like the micro deal and then the macro deal, right? Sometimes it just feels good to take a free trip, you know? Like who cares if it's a good deal? You went on a trip you weren't going to take otherwise. Well, totally. Also, if it's a good deal because you have five people flying to the same destination and you know it's guaranteed versus like we're going to be scattered to the wind and then have to find one another like Lord of the Rings or something. Then fantastic, right? Then psychologically that's also a good deal. Are there any options? And I think the answer is no. But outside of travel that are interesting in terms of using points,

53:53 let's just say hypothetically I was like, you know what, decided I'm going to stay in the US for the next 3 years and maybe I'll stay in Austin for the next 3 years straight. I'm tired of traveling. Oh man. Are there any uses of these points? What are the best options of the worst options? If might be the way to word it. I just looked and they shut down. I don't know if there's going to be an alternative, but there is a company that used to exist called Miles for Migrants that basically you hand over your miles and they help like refugees relocate around the world using your miles. Oh, okay. That's interesting. But it looks like they don't exist. Like it looks like they have a it's with sad hearts we we share this news. So there might be some ways to use them for like someone else, you

54:38 know, something like that. Ah yeah, that's interesting. So that's one altruist. It's a very charitable cause. It provides no value to you. I don't even think you get the tax write off, but you're helping people relocate with miles you don't need. Here's the thing, like I donate a lot of my stuff cuz if I go and I look at my and you and I both know I have no fashion sense, so it's like if I go upstairs and I've got a lot of extra clothing, I'm like from 1 to 10, how much value am I driving from like this shirt? It's kind of a very leftrained Tim Marie Condo version. So instead of sparking joy, I'm just like from 1 to 10, how much value am I getting out of the shirt? Haven't worn it in four months. That's a one or a two max. If I gave this to Goodwill, somebody would get like a seven or eight or more out of it if they really need it. Maybe a 10. That's just a better use of this thing

55:25 in the world, right? So for me, I could see actually doing something like that with points. if you found a charity that you cared about and said, "Hey, I've got all these points. Can I just help you out?" There's a listener of our podcast and he reached out to me and we talked and he runs a few shelters around the world for women that are suffering for domestic violence and all kinds of stuff and human trafficking. And he's like, I use all my points just for the business. All the points his company earns, he uses to book trips for people, for refugees, all this kind of stuff. who have a lot more flexibility. So, there's a way that I'm sure someone listening that could reach out and be like, "Hey, we could we could help put these to use if you don't want them." I'm going to get so many fake Oh, for sure. scammers

56:13 asking for points. But yes, Tim, give me your points. But I would say the easier solution is just decide where you want to give. Give with your dollars. And whenever you're taking a trip, tell whoever's booking your travel, and this applies to anyone listening, just go look what would it cost on United. Let's just book it with United this time. And it's often great deals. We're going to Cabo and it was a great deal to use points, especially because we weren't sure which day we wanted to come back, so we just booked it for both days and you can cancel with no penalty. So, even if it's not a great deal, just start cranking through them. You don't have any. But just in case anyone's in Austin, one of the best uses of Chase points is transferring them to Hyatt because Hyatt just is one of the hotel groups that just continues to deliver

56:58 great value and there's like a Miaval wellness resort right outside of Austin. Oh yeah, I've been there. It's like all-inclusive and you can use your high points there. You don't have anything that would get you high points. So that's okay. It's not relevant to you, but there are a lot of domestic ways that you could use your points even if you're not leaving the US. So, let's look at a situation on my spreadsheet here. Yeah. And let's pretend the numbers are bigger than they are. So, I have points on Emirates Skywards and I have points on Tap Air Portugal. The numbers are not as big as the other airlines. Yeah. But let's pretend that these were more miles because I'm bringing these up as you can guess because they're both expiring this year.

57:43 Yep. What can people do if they're like, "Oh [ __ ] I've got 3 to 6 months, maybe it's a year before these things expire. I do not have any need maybe no desire to take like an emergency trip to fill in the blank location. Is there anything to be done or is it just like ah you son of a [ __ ] you got me. No no no there's multiple things. So most of the programs in the US now don't expire. If you have the credit card with a company you earn points in. Usually the credit card points don't expire but a lot of programs do. And I'd say there's two versions of expiration. There's a couple airlines, Japan Airlines, ANA, where it's truly like 3 years and they're gone. Nothing you can do. And then there are a bunch where

58:30 it's like, I think American Airlines, if you have no activity for 2 years, they expire. Loyalty rewards. Sometimes the stick is better than the carrot. I have in the past with American, I've donated 1,000 miles. That's activity. That kicks you another two years down the road. You can buy a magazine with your miles, kick the can two years down the road. Y Emirates, for example, lets you transfer your Emirates points to Marriott. So, funny enough, it's like you've got Marriott points, they need some activity or they're going to expire. You have Emirates points. Maybe you could transfer all your Emirates points to Marriott, which you're probably more likely to find a hotel that you could use to book with Marriott points and cash out your Emirates balance. Yep. With Tap Air Portugal, you've got an

59:17 orphaned 6,500 miles. Probably not even enough to book really anything. I honestly wouldn't feel too guilty just letting them expire. The thing that I would note in the future for someone listening is Tap Air Portugal is a part of I believe it's Star Alliance. Yeah, Star Alliance. Whenever you fly on TAP, you should just put in your United number. Try not to over complicate things. You're flying on Air France, put in your Delta number. Do I think Delta points are the best ever? No. And if you want to play this game at a crazy level and have six figure balances in 25 airlines, great. But when you're getting started, if you have Delta, American, or Alaska and United, any foreign flights,

1:00:02 credit there. And and then you don't have to worry about having these little balances all over the world in random airlines. Yeah, that's a good point. But at 6,000 points, I don't care. At Emirates, if you thought one day you'd use them, great. Otherwise, I'd transfer them to Marriott. I will say there's a strange reason why I ended up with 25,000 Aian Air miles, which is a Greek airline part of Star Alliance. And I was like, what do I do with these miles? I don't need I'm not going to go to Greece, but Aian Airlines is part of Star Alliance, so I just use them to book a flight from San Francisco to Denver, you know, like on United. Yeah. Okay. Now, 6,000 is not enough to do that, so I wouldn't even worry about it. Yeah. And Emirates is not part of any of the major alliances. They have

1:00:48 some partners, but because they have the escape valve of transferring them to Marriott, I would just be done. But if you had some Air France miles, you could probably use them even if you weren't going to France to book a Delta flight or if you had British Airways to book an American flight or something like that. Got it. Okay, that makes a whole lot of sense. All right, where should we go from here? I mean, I'm tempted to sprinkle in some crazy point stories, but we could also go somewhere else, right? Because it seems like the answer is use these for flights that are coming up. They don't expire. There's definitely part of me that's like, "God, it's just it's not very inspiring." But I certainly could do it. That's the best value per point is to use award tool. And then if that fails, MX travel

1:01:34 portal. What if we did it this way? I said the best deals are with the ultimate flexibility. So you could say, "Hey, I just want to have an amazing like just blow my mind. Make me feel like I got so much value out of this. What could we do?" Right? like what could we do that's really awesome. Block off a week and say this week I'm just going to blow it out of the water and I'm going to do something awesome and I don't know what that's going to be. I don't know where it's going to be. And you go to one of these tools and you say where can I go this week? And I think you could have a good time anywhere. Yeah, I agree. So for example, seats. One of the cool things they have is they have this tool that's like the ANA first class finder and the Lufansza first class and the JAL first class finder. So

1:02:20 you can say Luanza first class. Well, for anyone who's interested, the San Francisco to Frankfurt flight today, you can book using United Miles in first class for 165,000 points. Yeah. Now, one of the best things about Lufansza first class, and I've not been able to fly it, is that in Frankfurt, they have their own private first class terminal that's separate from the other terminal. It's known for if you go take a bath there, they give you these rubber ducks that you can post on the internet to show people that you flew first class on Lufansza. But like, you could basically just schedule a I'm going to take an amazing trip. I'm going to go somewhere awesome and just see where that leads you. Yeah, we've done this a handful of times and we ended up at this amazing

1:03:06 resort in Mayorca last year called Caproat. It's a small luxury hotel of the world. It's built in an old fortress. If you just search for you're like, "Wow, that looks beautiful." Caproat, you know, if you want to go in the summer, it's like two to 5,000 a night. Yeah. And we were like, "Wow, Hilton has five nights here." We had five free Hilton night certificates. We found some points to get ourselves to Europe. I think one interesting thing for people to consider, we live in the Bay Area. We

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