In my last post you read about the credit card game I play. Through credit card sign up bonuses and manufactured spending (explained in part 6), I am able to generate lots of loyalty points. I estimate I can generate points at a cost of about $1 per 1,000 points.
These loyalty points are not for hotels only as in the last post. But also for airline miles to be redeemable for airline tickets. This is where I greatly reduce the cost of an airline fare.
It's possible to fly economy class for much less miles, but I generate enough airline miles that I almost always fly in business class. The difference in miles for economy vs business is at least 2x and perhaps even 3x.
Relaxing in my business class pod
I would estimate a round trip business class flight to my type of destinations is around 200,000 miles. Economy round trip may be 80,000 for an average. Flights used to be much fewer for business class, but with so many in the game today the prices are inflated. Also the current occupancy on a plane is much higher today driving prices up.
If I apply the $1 per 1,000 miles it cost me to generate these miles, the cost of a business round trip is $200. That's on an airfare that might cost $7,000 or more. So I pay about 3 cents on the dollar or 3% of the flight cost.
Now there are often fees associated with the award tickets. I try to use mile currencies where the fees are not high (never use British airways to fly to London, fees are a killer). I would estimate my fees average about $100 per trip bringing the total airfare to around $300.
So now that we've covered the main expenses for a month long trip, what's the final tally?
Souvenirs/ gifts $100
Local transportation. $350
International airfare. $300
Again, that is in the ballpark of what I spend on myself if I'm home for a month. So travel is essentially free for me.
Now I'm using round numbers so nothing is exact but that's the ballpark. I may have left a few items out that you might have for expenses, but if you follow these practices you'd have a deeply discounted vacation.
There's a lot more I can write about this but I've given you the headlines. On tomorrow's post I'm going to explain how it's possible to have a one month international vacation spending none of your own money (or even making a profit). I know it sounds impossible, but wait......
Go to part 8: