Miles vs. cash: annuity scenario
Jan 29, 2015, 9:53 am
#32
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Join Date: Jul 2002
Location: MCI
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We gotta change it up a little. The original question is too much of a no-brainer. We've answered it.
Let's do:
100,000 miles per month
vs.
$1,250 per month
Assume by some miracle that you owe no taxes on either one and if you choose 100,000 miles per month, you're also granted a mid-tier elite status on your chosen alliance. (Thus you can choose to redeem coach if you want to...and you don't need to spend cash to mileage-run yourself to status every year.)
We all easily beat 1.25 cpm, right?
I think I'd probably still go cash, but if someone said that I also get SPG Platinum and every third month the payment is 100k Starpoints instead of airline miles, I'm suddenly more interested.
Let's do:
100,000 miles per month
vs.
$1,250 per month
Assume by some miracle that you owe no taxes on either one and if you choose 100,000 miles per month, you're also granted a mid-tier elite status on your chosen alliance. (Thus you can choose to redeem coach if you want to...and you don't need to spend cash to mileage-run yourself to status every year.)
We all easily beat 1.25 cpm, right?
I think I'd probably still go cash, but if someone said that I also get SPG Platinum and every third month the payment is 100k Starpoints instead of airline miles, I'm suddenly more interested.
Jan 29, 2015, 10:01 am
#33
Original Poster
Join Date: Aug 2006
Programs: SPG Gold
Posts: 162
First (I actually mentioned this part) you can choose any American based program, including the flex ones. Coincidentally that means you can always opt to get some cash/GC - albeit at a stiff penalty (generally 1 cpm but could be better depending on promotions).
Second, the straight cash option is pre-tax.
Jan 29, 2015, 10:06 am
#34
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Join Date: Jul 2002
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A couple of points I should have probably clarified in the op that would have made things more interesting:
First (I actually mentioned this part) you can choose any American based program, including the flex ones. Coincidentally that means you can always opt to get some cash/GC - albeit at a stiff penalty (generally 1 cpm).
Second, the straight cash option is pre-tax.
First (I actually mentioned this part) you can choose any American based program, including the flex ones. Coincidentally that means you can always opt to get some cash/GC - albeit at a stiff penalty (generally 1 cpm).
Second, the straight cash option is pre-tax.
But I'd still run into the issue of it simply being too many points to ever use...plus I can think of a *lot* of non-travel things I'd do with $240k extra after-tax dollars per year, whether I was in "invest it" mode or "spend it" mode.
I think it's more interesting at smaller amounts. $30k a year in your pocket vs. approximately the number of miles/points you could actually spend on 2 or 3 awesome trips for 2 to 4 people each year...
Jan 29, 2015, 12:20 pm
#35
FlyerTalk Evangelist
Join Date: Oct 2014
Posts: 10,904
We gotta change it up a little. The original question is too much of a no-brainer. We've answered it.
Let's do:
100,000 miles per month
vs.
$1,250 per month
Assume by some miracle that you owe no taxes on either one and if you choose 100,000 miles per month, you're also granted a mid-tier elite status on your chosen alliance. (Thus you can choose to redeem coach if you want to...and you don't need to spend cash to mileage-run yourself to status every year.)
We all easily beat 1.25 cpm, right?
I think I'd probably still go cash, but if someone said that I also get SPG Platinum and every third month the payment is 100k Starpoints instead of airline miles, I'm suddenly more interested.
Let's do:
100,000 miles per month
vs.
$1,250 per month
Assume by some miracle that you owe no taxes on either one and if you choose 100,000 miles per month, you're also granted a mid-tier elite status on your chosen alliance. (Thus you can choose to redeem coach if you want to...and you don't need to spend cash to mileage-run yourself to status every year.)
We all easily beat 1.25 cpm, right?
I think I'd probably still go cash, but if someone said that I also get SPG Platinum and every third month the payment is 100k Starpoints instead of airline miles, I'm suddenly more interested.
Jan 29, 2015, 7:26 pm
#36
Join Date: Mar 2007
Location: SJC/SFO
Programs: WN A+ CP, UA 1MM/*A Gold, Mar LT Tit, IHG Plat, HH Dia
Posts: 6,284
That's a more interesting decision to make because it's more conceivable to spend 1.2M miles per year. I could purchase two foreign trips in J for me and and my wife, two domestic trips in F, and use the rest to buy flights as gifts for family who can't afford to travel long distances.
Feb 14, 2015, 2:26 pm
#38
Join Date: Nov 2012
Programs: AX PLT (CA+US), Hyatt Diamond, SPG GD, CX GD
Posts: 24
I'd take miles just because of my personal travel habits (Last minute flights). It would be nice to not have to buy any revenue tickets for a while, and instead travel exclusively in F/J.
Feb 23, 2015, 1:24 pm
#41
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Well, to be fair, "anytime" seats are rather easy to find... But if that's all you're finding, you're way ahead just taking cash.