Valuation of points and miles
 

I don't get how people value miles sometimes.

For example, there are some bloggers who say they used x number of miles for a 32,000 first class ticket! "That's 16 cents per mile!" But no, because you can buy miles for 3/3.5 cents per mile, so you have to be really stupid to actually buy the ticket, considering your credit card miles and "paid" miles take award space from the same bucket, right?

And then there's milevalue and lucky who more sensibly value the miles at a fixed amount, like 0.8 cents for Hilton, which is slightly better, but that doesn't make sense either because your cpm redemption value is dependent on the actual redemption. So what they're saying is like "I value 100 USD at 80 USD, but since I got 100 USD worth of stuff, I made a good purchase."

That simply doesn't make sense to me...

I agree with your first paragraph. It's a pet peeve of mine. The value you get out of a mile is only the cost you would have spent in the first place. If coach is $1000 and business is $5000, I might personally value business as $2000 for a particular trip. Therefore, the price I saved is $2000, not $5000. It's why the 100% US Airways buy miles promos make sense -- some people don't mind paying $1800 for a business class ticket to Asia (even if they forgo earned miles).

In your "I value 100 USD at 80 USD example," you're confusing two ways to think of money, which are
(1) An instrument that holds a set amount of value
(2) A liquid currency that can be used to purchase goods and services.

Instead, think of it as "I value 100 widgets the same as $100, but if I participate in this loyalty program, I can purchase points that are good for 100 widgets for only $80."

It's arbitrage, which is what this game is all about. Get points at a low cost, redeem that at a higher cost.

My "value" of a point is the price at which I'm indifferent between it and cash. For an easy example, let's look at Ultimate Rewards, which can be redeemed for cash at 1cpp or redeemed for travel at 1.25cpp. Since I like to travel, I'm indifferent to them at 1.25cpp, because I know that I will be able to get at least that much value out of them. If you came up to me and said, "I'll sell you Ultimate Rewards for 1.2 cents each," I'd take you up on that (if it weren't against the T&C).

However, if I needed to book a flight for my cousin (who flies once a year and doesn't care about earning miles, so earned miles leave the equation), and I redeem 25,000 Ultimate Rewards via United miles for an otherwise $550 ticket, then I can say "I value 25K UR at $312.50 but got $550 out of them, so that's a good redemption."

I agree with this to a certain extent, though not entirely.

Firstly, what if you would've never taken the trip if not for miles (in coach, even)? Is the value of the flight 0? Sure, you didn't save anything relative to if you had not taken it at all, but surely there's value there--subjective value, beyond simply crunching savings.

Valuations based purely on the absolute savings relative to the revenue price are flawed; yet, so too are valuations based strictly on the cash outlay that you would've made.

If someone gets you a new blender at christmas, and you would've only bought the $40 version, but your benefactor gets you a much nicer $200 version, what is the value there? Did you save $160? No. But is the value of the objectively better (let's assume) appliance somehow borne out in your subjective valuation? I think it's reasonable to think so.

I've pondered this thought before too. I know some people that book a hotel room at high season and in a certain area because cost per point has great value, this is a stupid reason to book an award stay. I never let my points dictate where i stay or fly but rather let my desire do it and use the points to lessen the burden on my pocket. Obviously you want to maximize your value per point but that shouldn't be the ultimate factor.

I think the proper way to value should be a need based valuation factoring in the lost opportunity. Skymiles are a great example, most value them as Skypesos but I actually value my pesos more than the average FF member because of the open jaw and 120K redemption to Africa. Trying to come up with a standardized fixed value for each point is silly i think, everyone should have their own individual valuation based on their needs and desires.

The other aspect is that the milevalue tote board is really a long-term approximation of value, to be used in making accumulation decisions.

If I know that, on average, I can use a particular point for 1 cent of value, I can make the decision to not spend 1.1 cents for it.

What I ultimately end up getting at redemption time is another matter. I should really be computing that based on the lowest of: the best alternative cash offer available to me from among all acceptable purchase methods (retail, priceline, similar item, etc.) OR the most I would have spent if I could have chosen the price.

Hopefully, over a reasonable time frame, the long-term valuation and the actual redemption value are the same. Otherwise I estimated poorly.

(I also want to consider cost - what did it cost me, in lost cashback, extra purchases, etc., to earn the miles? Need to keep the cost below the value at all times.)

I agree, and I made this same argument in an earlier thread. http://www.flyertalk.com/forum/19553740-post14.html

Sure, you didn't save $x by using points for that transcon F flight, but that is different than value in my opinion.

In any event, OP, this point gets debated frequently on FT and elsewhere. There is no set answer and trying to divine one will create stress in a hobby that is supposed to give pleasure.

Another place where mile redemption trumps paid tickets is in the last-minute category. Most times, there is availability in the standard awards category for last-minute trips that work out to be way more economical than a piad ticket. If you are the type of person who waits till the last minute or makes impulsive travel decisions, having the option of using miles helps quite a bit.

But, for the most part, I agree with amolkold in that the value per mile should be based on what you would have been willing to pay for it. While I understand that there are instances where you would have never bought a ticket for a certain price and the only reason you are making the trip is because of miles, I think this is a rare care. As in, say, out of 5 trips or so, there might be 1 where this line of thinking holds true...

Ultimately, you also need to look at the amount of time & energy you put into acquiring miles. As long as you are having fun doing the grind, it's great, but once it starts feeling like a chore, it changes everything.

The fixed value is an accounting measure because, like any currency, it has no real value until you want to exchange it for something else. I say my Ultimate Rewards points are worth 2 cents per point because, on average, I can find ways to use them that save me from spending at least 2 cents for every point redeemed.

But the idea that the points are only worth 2 cents and never more or less is nonsense, just as the idea that a dollar is only worth a dollar is also nonsense. Say a parking garage charges $10 an hour. If it's a slow weekend and it's not raining I'll park on the street three blocks away and walk. If it's the Christmas shopping season and it's a torrential downpour, I would gladly pay $20 an hour. The rate the garage charges doesn't change, but my assigned value changes. When the value I get is more than $10, I am willing to exchange the cash for a parking space.

A short or a long domestic award might both cost 25,000 miles, but if they have very different cash prices one is worth it and one is not. That doesn't change my accounting practice of valuing miles at 2 cents each.

And yes, the people who say their miles are worth 16 cents each are wrong, unless they would actually pay $10,000 for a first class ticket.

I think two useful ways to look at valuation are as follows:

If you receive miles/points in a transaction where you cannot find a tax rule that allows you to exclude the "income" on your tax return, what "value" of the miles/points would you list as "income"?

If you were making a loan to someone and he listed the miles/points as collateral, what "value" would you assign to this collateral?

Do I hear a lot of $0s?

To me, these miles/points are simply a coupon system that allows me to buy travel at a discount. I almost always have to pay something when I obtain miles/points and I almost always pay something when I use them. The value of what I purchase is the post-coupon price. The coupon itself had no value.

Most of the time I never would have purchased the travel at all if I did not have the coupon. Every once in a while I might use my coupon to buy at a discount the travel that I otherwise would have paid the non-discounted price for, but that is rare.

If I get a coupon to get an $8.95 burger for $4.95, I do not think that my coupon had a value of $4.00. That does not mean that I do not enjoy the burger I buy with the coupon. But the burger was worth the $4.95 I paid for it, not $8.95. The $4.00 coupon did not have any value to me. In fact, if I did not have the coupon I probably would have gotten a 99 cent McDouble off of the value menu, so my $4.00 coupon likely made me spend more than I otherwise would have.

This is all very interesting. Didn't we leave intrinsic value behind in the 19th century? To be completely honest, I find that Lucky values miles in a very pragmatic way that can be applied more generally, not unlike the way an asset might be valued by a major bank. Those who consider the value to be based off a specific redemption are going for a particularized approach that has little value outside of the individual redemption. At bottom, the points have no value beyond that which is given to them by the market, which in this case isn't the NYSE and therefore is not even remotely static.

Were I to value my stash across 54 hotel and airline programs I might say $20 per k. This is an estimate of average value after years of consuming miles in the same manner as your congress consumes debt.

Valuation
 

I work in investment banking, and regularly do corporate valuation. Although points & miles is different, the approach is similar.

Most people understand the concept of "intrinsic value", that is, to most people a $10k flight is not really worth $10k. This is similar to sticker price on an overpriced car - some people will buy it, but most will buy it closer to its true value. This concept is applied to miles: Most people wont purchase miles at 3.0 cents/mile, but might do so at 1-1.5.

The concept that most people don't understand in valuation is Opportunity Cost. Simply put, this is the next-best alternative you forgo. In other words, let's assume you value American Airlines miles at 1.5 cents. If you have a credit card that earns you 1 mile per dollar, then you are actually not maximizing your utility, since there are credit cards out there that will earn you 2% on everything. You are essentially "losing" 25% of your maximum utility. In other words, assuming no sign-up bonuses, if you don't value any of your points higher than 2%, your opportunity cost is higher than the value you are deriving from spend.

Another point is "relative utility". This is similar to the example of a bottle of water. You can buy a case of water for $4 per 20, or roughly $0.20, $1 at a mall, or $5 at a sporting event. Let's assume this is the exact water bottle. Why do we pay literally 25x more at a sporting event for the same product? It's because of relative utility. We know it isn't "worth" $5, but at that moment, the value you get from it is. The way this relates to points is this: I won't ever use additional $ or points on a suite if I am staying in a hotel alone, but if my girlfriend comes with, the value of a suite goes up, as I am willing to part with my $ and/or points for the upgrade.

I have a pretty detailed excel model where I have all of my valuations, albeit subjective valuations. Although I have gotten amazing redemptions, keep this in mind: Your points values for redemptions should never exceed the cost at which you can buy them directly

It is not correct to say "I got 5 cents per mile on that last minute United miles redemption". No you didn't because no one would ever pay more than the cost to purchase them outright.

People do this all the time, especially in the corporate context.

Valuation, Part 2
 

Not really. As the consumer, you don't pay $30 for a stock that's trading at $20. What you are referring to is when a company pays over the enterprise value for another company. This does regularly happen, since synergies can sometimes justify this.

For the purpose of miles and points, my "quick" rules are:

1. Always get over 2% in value from spend, since that is the baseline
2. Never value your points or miles at an amount greater than you can buy them at.
3. When redeeming, always calculate the NET cost/mile.

For instance, let's say you redeem 50,000 miles for a $1,000 trip that is 10,000 miles away. Most people would say "Oh I got $0.02 cents per miles ($1,000/50,000). However, you must take the forgone miles you would have earned, into your redemption. In this example you forgone 10,000 miles by redeeming an award.

You basically "spent" 60,000 miles instead of 50,000. This example also does not include elite status, which further supports reason 3.

Sorry if I was unclear -- I was talking about airfare, not mergers and acquisitions. My point is that even if people can fly LAX-NYC for $x or they can buy 25,000 miles for $x-10 and use those miles to fly LAX-NYC, many people will still buy the revenue ticket. By the "corporate context" above, I meant corporate travel. But this happens even among leisure travelers.

Your statement that "no one would ever pay more than the cost to purchase [miles] outright" assumes people are (a) rational, and (b) have perfect information. Both of those assumptions are often wrong in the real world.

All of this also ignores the fact that booking an award ticket comes with additional annoyances and restrictions. But even assuming booking award tickets and buying miles do not entail any additional transaction costs over buying a revenue ticket, I still stand by my statements. :)

I think what LPR is saying is that its stupid to say "I redeemed my 50K miles for a $5000 ticket so I got 10 cents per mile", if you could have just bought 50K miles for $1500. Since you are dealing with all the restrictions of using miles they can inherently not be more valuable than the cost of buying the miles. It might be rational to spend the $5000 on the ticket because you earn miles, or its tax deductible, or there are no award seats available, but you simply cannot say that the miles were worth $5000 if you can buy the miles for $1500.

Another example might be my Panasonic plasma TV. If might be worth $5000 to me. I enjoy it that much and if that's how much all tv's costed I might be willing to pay that. But I do not say its worth $5000 because that's how much I would be willing to spend, its worth at most $1000 because that's how much it would cost me to replace it.

Put most simply:

The value of something is the lesser of the value derived from it or the replacement cost.

If 50K miles gets you a flight that cost $5000 retail but you would have only spent $1000 and 50K miles cost $1500 then the miles are worth 2 cents each. If instead 50K miles only cost $750 then the value of the miles is only worth 1.5 cents.

I also question even 2 cents as the value of a mile because I have seen plenty of opportunities to buy them for less. If everybody is valuing them at 2 cents then there should be a mass rush to buy when they sell for 1 or 1.5 cents.

LPR,

You are using 2 cents as your baseline because you argue that you can easily get cashback at 2%. I question your assumption as most 2% cards I know of have some catches like requiring money to be spent on travel. I googled some and found a link for the top 2% cards but none are a straight 2% cashback. Do you have a card that is still available and offers 2% cashback?

I am currently receiving 3 hilton points which I value at 1.5 cents because I do not know of somewhere I will actually net 2%. Granted I am also willing to pay a little more for an Amex so that might tack on another quarter cent or so.

http://creditcardforum.com/blog/2-ca...k-credit-card/

I personally value them at 1 cent a mile because they are so inflexible and such a hassle to use. (Former Northwest, current Delta flyer here.) Granted, I can and have redeemed several times for tickets that would have cost much more...but this is offset by friends and family members who have NEVER redeemed a single trip and who have gotten angry, frustrated, and even thrown away ("donated") their miles. Even with the financial crisis, there are people who have more money than time or more money than patience, and for them a frequent flyer mile (at least one as difficult to use as the Skymile) is really of almost no value at all. People who have more time and patience than money are probably a minority of people who travel regularly by air. So there is no puzzle here: my guess is few outside the ranks of dedicated hobbyists/Flyertalkers would value miles at 2 cents per mile. They may start collecting miles with good intentions but the "hassle factor" eventually makes them give up in disgust. Just my speculation...

Yes

https://www.fidelity.com/cash-manage...-express-cards

https://www.pricelinevisa.com/apply/...rerid=HOMEPAGE

As far as I know the fidelity card requires having a fidelity account.

The priceline card looks interesting.

Correct, you must have an account in which to deposit the cash, but there is no requirement to leave the funds there.

Figuring out the opportunity cost isn't so straightforward. For people who regularly book last minute tickets or who take advantage of lax change policies on certain awards (elite or not), there can be huge savings to be had over cash.

Tax-deductibility of a paid fare vs. the non-deductible award is a huge economic factor rarely considered on FT.

It very often tips the decision one way or the other for people who are paying attention.

I enjoy reading these discussions on valuation and the different perspectives people have. For me personally though, coming up with specific valuations isn't a good use of energy. I look at collecting points/miles as a hobby. I have some time to spend each day doing this, and the real value is in the pleasure I derive.

Points and miles are quantized. The value of my first 100 miles in a program is basically nothing for me, but the last 100 miles needed to attain an award can be worth spending some cash. I tend to take opportunities as I find them - going for low hanging fruit - until I notice I am getting close to being able to do something with them. That's when I start daydreaming about what I can do and go for the goal line. I don't have the opportunity to travel as much as most of you do. Maybe if I got to travel more than once or twice a year I do it differently. Kudos to you who are able to maximize your return, but I'm just thrilled to be having fun and saving some money at the same time (whatever that amount of money is).

But we in The New Economy live in Looking Glass World, not The Real World. In Looking Glass World we manufacture spend and save our money by running up credit card debt and loose our money putting it in savings accounts where any amount below a minimum balance might be assessed bank fees. So you have to add that people may be quite rational, but motivated by unseen factors. Hence the crazy customer waltzing into the bank with a dolly containing $75,000 in boxed dollar coins, stocking out money orders at a WalMart, or buying enough pudding cups to feed the state of Rhode Island may actually acting quite rationally in a world that has gone crazy.:cool:

Why would there be a mad rush? So long as I can manufacture miles for free to meet anticipated demand, I need not buy them for 1 to 1.5 cents. But when my need for miles suddenly increases beyond the capacity of my generating systems, then I buy miles in that price range. The problem is that stockpiling miles is not like stockpiling gold, but rather like stockpiling milk.:cool:

Well you obviously then think the miles are worth even less than 1-1.5 cents. Generally not the consensus of FT. Almost every "Should I use miles or pay thread" generally suggest purchase until about 2 cents. No point in spending $500 cash to save 25,000 miles when you could replace those miles for $375.

I have an HSBC--now owned by Capital One--card that pays 2% on everything. The only restriction is that I have to have $25 before redemption. I have two different PenFed gas cards--one that pays 5% cash back on each statement and one that gives 5 points per dollar spent. They are basically the same since the points can be redeemed for gift cards (5,000 points for a $50 card). I have the Citi Forward card that pays 5 points per dollar for dining which can be redeemed for gift cards also. I use my Discover cards only when there is a 5% return which can return 6.25 percent with certain gift cards.

But I always carry the 2% HSBC card and make most decisions based on the 2% return that I get with that card--if higher returns are not available with another card.

Like most on here, I rarely use cash.

I'm in InfrequentFlyer's camp, but even more so. I don't put a monetary value on the enjoyment I get from my friendships, my family members, my dogs, or from those perfect ski runs on a sunny day. I would never in a million years pay money for a first class flight between Hong Kong and Los Angeles on Cathay Pacific, but it is one of those experiences I will probably never forget, particularly since a few days earlier I had been trekking in Nepal. I try to maximize my points and miles so I can do the things I couldn't otherwise do. My next goal: a first class flight on Emirates. And I have no idea what it would cost if I paid for it, because I wouldn't.

I do understand, though, that for some people, part of the hobby is to try to maximize values, and I value the information you share because I find it interesting, as long as someone else is doing the math.

Each to his/her own and may the new year bring us all lost of miles and lots of upgrades.

I think the source depends also. When most of my miles were just a work perk I didn't really think about their value too much. I also was a total novice and just knew enough to keep things from expiring.

Now that I am picking and choosing credit cards for bonuses I have to assign values to them in order to pick the best offers. I am relatively conservative in my values, based more on what I'd spend than an aspirational value.

That said, I am an accountant and I take a little too much pride in the spreadsheet that I have cobbled together to track it all.

I have different valuations depending on if I have to buy the miles such as a USDM or Avianca 100% deal or if I get them for free by signing up for credit cards or directing my normal spend to one card vs another, or other free things such as E-Rewards, E-Miles. I don't value the time I spend doing the surveys because I do them while watching tv (I'm a good multi-tasker) so I am not wasting time I would otherwise be using more profitably.

The 100% buy miles deals, I only use them in moderation to cross the threshold if I am close to a redemption level.

If I have to put a dollar value on my redemptions, I use whatever the lowest cost to get from A to B is, because I would never spend cash on a full fare J or F seat.

I also take into account how difficult it is to get the miles or points vs how easy it is to redeem them. I find more value in miles such as AA and UA which can be redeemed for one-ways than others like US and DL where you have to book a return ticket. I take into account if you can book it yourself online vs having to call the airline to book.

But no, I don't put a $x.xx per mile cost on my valuations because in my case it's either use the miles or I can't afford the ticket at all.

(a) Worth vs Value.

A 25000 miles award ticket is WORTH only the COST incurred in
accruing / aquiring those miles.

VALUE on the other hand is like beauty.. ie in the eye of the beholder.

The difference is that one is an Accounting entity (worth). While the
other is a goodwill entity (Value). The difference between the two can
be astronomical (eg water front properties, first class air travel, etc).

As far as humans are concerned, VALUE is the actual "benefit" enjoyed
by this animal.. WORTH means nothing.

Purchase until 2 cents for an immediate need. But miles can turn rancid as airlines periodically devalue them. So big stockpiles of miles that will not be depleted in a year should be accumulated at about the free to 1 cent range IMHO.

This is always entertaining to read FTer's opinions on pontificating what their view is. I always use what is the cash price at the time of the redemption, period. That is your Cent Per Point/Mile redemption value. If you don't have the cash or miles you don't get to enjoy that seat/room etc. Thus the point/mile is what the cash outlay is at time of redemption. Now for the 20 sharks in the water who will surely jump on this once again like blood chum in the water, waiting to give their obtuse view and justification. Enjoy. :D

I struggle with the concept of "value" when it comes to item that one cannot otherwise afford. I had as a target 400k UA miles for a family trip. I could have purchased them for 2.1 cents per mile, which means about $8300 (because I would earn 8300 miles on the purchase).

But I can't afford $8300. My acquisition cost was about $920 in the form of gift card fees and credit card annual fees. If one assumes 2% I also gave up the chance to earn about $1k on a cashback card with the spend I generated. So $2k give or take.

I wouldn't pay $8300 for the miles. I wouldn't pay half that. I can't afford it. I can only do this trip by getting the miles cheaply. So I guess that's one way to look at value.

But then I ask myself a second question. How much would I sell my miles for? Obviously, I would sell them for $8300 plus a few bucks for the effort, because then I could just re-buy them for that. But nobody is offering and it's not permitted anyway. It's a mental exercise. How much would I take to cancel my tickets? If I couldn't repurchase miles, it's a high number. I can generate lots of miles, but don't have sufficient spend to generate unlimited miles.

Is it irrational to not sell an asset for the same amount you would pay for it? I'm not sure. It seems like it isn't if you can't afford it. People give me sports tickets for example. I wouldn't buy them for more than, say $50. At that point, it would be irrational for me not to sell them for $50. But if it is a Superbowl ticket that I can't afford, it feels different. Perhaps the ebay market value of a superbowl ticket is $2500. I can't pay that. But if I got one for free, I might not sell it.

I have a joke: What's the value of a FF mile? One? Who wants one mile? I won't pay anything for a mile. Now, if you've got 150,000 let's talk.

One problem with this particular upper limit on mile value that you mention is that you generally can't buy unlimited (or even significant) amounts of miles from a particular program. If I could outright buy 135,000 miles from AA every year, you're right, I really couldn't value them at the list price of an F ticket to Asia. But I can't outright buy that many miles. So does that still mean that the most 135,000 AA miles are worth is 135,000 * $0.035? I'm not so sure.

All of the distinctions people are attempting to make between "worth" and "value" really obscure the issue in my view. It boils down to this....if you are faced with buying a ticket, what is the LOWEST $/mile at which you would choose to redeem miles for the transaction instead of paying cash.

I agree. This has been very effective for stopping redemptions for us.
Or simply put, we fly and upgrade with miles, kids fly only on miles.
If I am to keep my "elite"ness I have to fly on paid tickets.

Luckily the hotels all changed to any stay.
Can you imagine if UA / AA did that ?
I would be quadruple EXP in a heart beat just from redeeming.

DL and now UA have understood that even the paying elite needs value in redemptions and so they now allow upgrades for elites (with cards or without) on award travel.

I find that most hotel bookings make no sense to redeem as the spend is paid by employer and I do not see much value in a bigger room at night when asleep.
For the coach seat, it is all I can do at times not to call the airline and say "I will do anything, please upgrade me!"

well depending on the value you can get for the points. For example Starwood is a very nice card mainly because you can get a lot for each point.

$120+ a night Sheraton Category 2 hotels which are very nice imo can be had for 4,000 points. Value is 3 cents per point.



where most points are valued at around 1 cent a piece like Ultimate rewards points with cash back would be 1600 points would mean $16

but if you use points and pay with Starwood 1600 points + $30 to book a Cat 2 Sheraton in Nha Trang, Vietnam the cost is 3,870,000 dong (vietnamese currency) or $185.61

Since your $30 charged could equal 3x Starpoints = 90 points so it's really 1510 points + $30. Although with the Foreign Transaction fees would lower the benefit, the 3% would still make the Starpoints lucrative imo.

You would still get 90 starwood points for paying the $30 with 3% foreign transaction fee it's $30.90
(FTF is probably why it's $30 cash instead of most $35 in the States)

So for this hotel $185.61 - $30.90 = $154.71

Since you get 3x points for spending Starwood in a Sheraton that's 90 points. So technically your only paying 1510 points + $30.90

Starpoint in this case would get you 10.34 cent per point. In this case even buying Starpoints for a full 3.5 cents a piece x 4000 points straight would cost you $140.00 saving you $45.61 for booking a room here.

This is one of the reasons why people love Starwood points =) it's all in how you spend it, and if it's ideal for you. If you have a Starwood hotel in access to where you want to go.

http://www.starwoodhotels.com/pub/me...o.89851_md.jpg

http://www.starwoodhotels.com/pub/me...x.89807_md.jpg

http://www.starwoodhotels.com/pub/me...o.89809_md.jpg

this is the view from Cat2 hotel in Nha Trang Vietnam which I plan to stay in the summer, very nice view and nice hotel, I've stayed there before without the Starwood card =(

Yes, this is the issue. I think that some of the posts discussing the
hypothetical buying and selling of miles are trying to address this issue
but some of them are not.

The answer may be different for everyone, but some of the collective
wisdom on flyertalk is always useful in helping people make that
judgement for themselves, and there have been many threads.

If someone is saving their miles only for that trip-of-a-lifetime that they could never afford, this issue does not arise. Someone who gets all of their miles from work and can only use miles for upgrades has a different issue.

One thing that I find when considering whether to pay for a ticket or use miles, is that as I get more miles, and no more opportunities to use them, they are worth less (but not worthless).