The maldives was a basic example to see if I was calculating things correctly.

Obviously that & Bora Bora are no brainers. What I want is a method to evaluate my not-so-glorious redemptions, like a US domestic flight.

For example ... if I can get a better valuation transferring MR points to Delta vs using MR as cash option, things like that

stupidzbu's question has been appended to a very recent discussion of the topic.

The only way to compare across options is to come up with your own, personal subjective value of what each point is worth. And, in my view, the only way to decide what a point is worth, is to ask a simple question: What is the dollar value at which I would be ambivalent between being given cash and being given the point?

So, using that formula, here are some values you might assign. (I'm just throwing these out there):

SPG: 2.2 cents
Amex MR: 1.6 cents
Chase UR: 1.9 cents
Hilton: .5 cents
British Airways: 1.25 cents

These values do not always remain static -- sometimes you may be very low on a certain currency and want to build it back up. Let's say you're shooting for a redemption on SQ, and the only way to get it is with SQ miles, so you want Amex and so your value goes up. But, in general, let's just stick with those numbers so the process make sense.

These values help for two things: (1) how should I accumulate, and (2) how should I spend?

Let's say you have a purchase to make for $1,000. It can be manufactured spend, or a real purchase, etc. Let's say you have a variety of different cards to make the spend. Which should you use? Just apply your values.

Let's say you can get 2x Amex on this purchase, plus be 1/30th of the way toward the spending cap of 30k, which nets you 15k extra miles (which you intend to hit). I would say that for this purchase, you will get 2,000 Amex, plus the .5 bonus, for a total of 2,500 Amex. (Put it another way, this is 1/30th of your spent toward the 15k. 1/30 x 15k = 500.) So, now, what value are you reaping if you use your Amex card on this purchase? 2500 x 1.6 cents per point = 4000 cents, or $40.

Is this the best option? With 2 percent cash back, you would have gotten $20 in value. Let's say the best you can do on any other card (SPG, for example) is 1x, so that you'd get 1,000 SPG points. Do the math? 1,000 SPG points x 2.2 cents per point = 2200 cents, or $22. Etc.

Now, use the same process for redeeming points. Suppose there's a British Airways flight you want for 25,000 points. You could use 25,000 amex, which is a cost to you of 25,000 x 1.25 cents -- or $375 in value. You could use 20,000 SPG, which transfers to 25,000 BA, so that's 20,000 x 2.2 cents -- or $440 in value. So, the Amex is better. Etc.

The key is that everything requires, at the outset, a rudimentary understanding of your personal, subjective value of your points.

In your account, travel program miles/points are worth zero, and bank program points are worth whatever you can get in the form of a statement credit or usable gift card.
When you redeem them for travel you would paid cash for, they are worth the price you would have paid minus 1% of what you had to spend to get them (the statement credit you could have easily gotten from any number of credit cards).
When you redeem them for travel you would have otherwise not taken (or not been able to afford), they are worth (financially) what you would have otherwise spent on less interesting travel, and you have a really cool inexpensive hobby!

But you're overpaying for the room. If you had purchased Hilton points outright, and used the points for the exact same AXON award, the cost would be much less.

Good point. Hilton Points are purchaseable at 10k for 100$, so 145k points would cost $1450. That's the upper bound on what the 4 nights in the room would cost. It's just like you wouldn't compare it to a full price room if there was a 50% off coupon that you would have used if paying cash.

Exactly, and that goes back to my first comment. Even if you have millions, you can't value the full price of the room if you can get it for cheaper.

You imply that your 'internal' value of the trip is simply the function of the cash price and thus 'people would gun for the MAD'. And from this point of view F class redemptions on certain carriers is hard to compete with in terms of points valuation. If I were to choose between MAD and BOS though there's a good chance BOS would win regardless of the ticket being 1/3 the price the MAD one.

Take for example my own experience - last summer I wanted to visit Yellowstone. It cost me 60,000 miles RT ticket to get there from DFW. Following your logic I should have used these 60,000 miles to fly somewhere in Europe to get a better value. The only challenge is I didn't care for Europe. Or for Hawaii. Or Alaska. I wanted to see Yellowstone, not Iceland with a creative routing including stopovers in Europe. I saw what I wanted and have never regretted a single mile I redeemed for this trip regardless of the value.

Different people have different attitude - some with choose a destination and then try to minimize the miles to get there while some don't care about the destination as long as they get a mind-blowing c/point value. There's simply not a right answer to the original OP question.

I also have access to airline buddy passes, which many times can be a curse. Nevertheless, in my head the value I assign to a mile is more than what I would pay in service charges to use a buddy pass but less than I would otherwise pay for a full fare ticket.

Example:

ORD-PVG-ORD is about $850RT flying as a buddy pass
ORD-PVG-ORD takes 135,000 miles to fly RT in F

There is a value to me to not have to fly standby and worry about getting on or getting stuck in Y. Let's say I'd pay double, so $1700.

That means, to me, that 135,000 miles are worth $1700ish or about $0.0125/mile. I won't go much higher than that because I'd just break down and fly on a buddy pass if it cost more.

Another example:

I just jumped on the recent LAN C class deal and bought JFK-SCL for $927RT. A buddy pass in C would have cost me around $650RT. It's totally worth it to me to pay the extra $275 and fly confirmed.

JFK-SCL RT in C using AADV is 100,000 miles, so I got those 100,000 miles at $0.00927. So if my value sits at around $0.0125, then I got a great deal (to me).

The value of miles to you is the lower of:
- how much it costs you to obtain them
- how much value you ascribe to free stuff you cvan get with them

Exactly.

Plus I often don't want to be captive at a resort either paying ludicrous prices for things ($10 cokes), or taking a bunch of meals in a hotel lounge to save cash. The Maldives don't appeal to me because they're the ne plus ultra of captive resorts for people waaaaaaay richer than I am, with corresponding prices.

Why would it be the lower of those values, rather than the higher?

I love the discussion that is summed up with "it is a subjective valuation," however when people who continue on this premise use what IMO is correct for CPM or CPP valuation which is the cash price, they get flamed relentlessly. You can't have it both ways. Either it is subjective or objective. If it is subjective as it most certainly is IMO, then the debate is only personal preference and there is no rulebook of laws for valuations. I don't see how anyone can get around the real world price of using the cash price which is set by the market as what you judge your CPM or CPP valuation off of. I always do and will, this is why I am savvy about miles/points, to enjoy luxuries I can't afford or too cheap to spend my own money on. Live the millionaire lifestyle, on the FTer budget.

I don't think it's the first. I value my miles considerably higher than the cost at which I acquired them. Unless you are importing some pretty sophisticated opportunity cost issues.

If what you mean by number 1 is "the cost at which you can easily acquire an unlimited number," then maybe it's closer. But I can acquire 6k Hilton for $3.95. I value them at much more than 6 1/1000ths of a cent.

I also don't really agree with "how much value you ascribe to the free stuff you can get with them" as the value either. It's too abstract and there's a timing issue.

I really don't understand what is wrong with the most basic formulation: the price at which you would be ambivalent between taking the money or taking the points. This may well, for some, be the value they ascribe to "free" stuff they can get with the points at a particular instant in time, but not always.

Ask yourself at what price you would sell your points. Ask yourself at what price you would buy more. If those numbers are different, figure out why. Either way, they bracket your value of the points.

I agree it is entirely subjective and personal, and that is the hard part. What I value now (subjectively) may not be what i value in the future (subjectively) which makes the decision hard. Additionally, as someone who tries to look at things objectively or rationally there is a desire to have some numeric value that i can use to help make a decision.

Those two are generally at odds, and that is where i feel most people have problems with this decision.

I have less trouble with the decision of when you use points. As echoed by other here, I feel I either found a good deal (CPM wise) or not using cash is more important. Where the real trouble i find is on the earning side (eg, credit card spend or bonus mile promotions). With so many options we all have a desire for an objective measure to decide the value of each currency. Would i rather earn 1 UR, 1 MR, 1 SPG, 2% cash for this purchase and it becomes more complicated when you bring in bonuses categories and a desire for either concentration or diversification.

Sure, one could say they desire hotel rewards more than air or cash, but even then they need a yard stick between different programs. What I value is likely not what you value so our measures are going to be different, and that is the personal conflict.

On the redemption side, I use the cash price. I do not believe you can ignore the cash price set by the market no matter how stupid it is. I'll generally use the lower of the equivalent cash price in my calc (e.g. the lowest business class fare to my destination even if that in not on the carrier the award is on) that way it is a more objective valuation (I also will exclude the C fare as that is not realistic). I am not a big fan of the subjective approach of "how much of a premium" i would put on the economy fare (adds too much subjectivity) and is not actually achievable in the real world.

For example, I'll sit in Y on a transcon/Hawaii if the price is right. It's not that bad. But i likely will not sit in Y on any ~7+ hour flight. There about is my line. As a result, the cash price becomes relevant.

Obviously, each person has to decide what they value.