My job in The Rich Investor is to help you make money. It’s what I spend most of my waking hours thinking about.
But today, we’re going to take a break from all of that.
Rather than talk about making money, I’m going to focus on having a little fun with it. After all, you can’t take it with you. The whole point of making money is to eventually spend it.
I recently got back from a trip to Greece and Turkey, so I have travel on my mind. I travel often. Both for business and for pleasure. I’ve wasted more money than I care to admit by doing things inefficiently in the past. But by now, I’ve figured things out.
Nowadays, I generally travel better, smarter, and, in most cases, cheaper.
And as some of you may be traveling next week for the 2019 Irrational Economic Summit in Washington, D.C., what better time to cover smart, more efficient travel tips than now.
For those of you who were unable to make the trip to D.C., don’t worry. For a limited time, you can gain access to the presentation via the Livestream. If you’re interested in learning more, just click here.
Without further ado, let’s cover a few ways you can make your precious travel dollars stretch a little further…
All About Airmiles
Airmiles are a familiar concept. They can be a fantastic way to significantly lower your travel bill.
Last year I used my accumulated airmiles to fly business class to Paris with my wife, saving thousands of dollars in doing so.
Every airline has some version of a loyalty program in which they reward their frequent flyers. You should sign yourself and your entire family up for an airmiles account with every airline you’re likely to use on a semi-regular basis.
In addition to free travel, accumulating miles with an airline gives you other perks: occasional upgrade to business class, access to the VIP lounge, the right to board ahead of the unwashed masses, and better baggage allowances.
And accumulating airmiles is relatively simple. Actual travel with the airline of your choosing is one way; purchases uses a credit card with rewards — like the Chase Southwest card, for example — is another.
On the first count, there is a tradeoff. If you consistently fly a small number of airlines, you can obviously accumulate miles more quickly. But you might not always get the cheapest price for that particular flight.
So, you have to ask yourself: Is it worth paying a little more in order to better accumulate airmiles?
There’s no “right” answer here.
But my rule of thumb is that I’ll pay $50 more on a domestic flight and $100 to $200 more on an international flight in order to fly with one of my go-to airlines. I’m naturally frugal. I hate paying a penny more than I have to. I do it thought so I can enjoy a decent scotch in Admirals Club while the rest of the poor slobs fight for seats at the departure gate. It makes travel almost bearable.
As for accumulating miles with a credit card… Just be careful. You can easily use that as an excuse to spend more money than you normally would or should. You might think, Well, I don’t really need this new big screen TV, but think of the airmiles… Don’t fall into that trap.
Get those thoughts out of your head. I believe it’s better not to have a credit card at all. But if you’re going to get a credit card, and you’re going to use it on core expenses — utilities, groceries, gas, etc. — then you might as well accumulate miles in the process.
The “right” card depends on what airlines you tend to fly. I tend to fly American Airlines, so the Citi AAdvantage MasterCard is a good option for me. But every airline will have a card that is best tailored to them.
Next time you fly, ask the flight attendant. She’ll likely have a card application on her person.
Again — and I can’t emphasize this enough — only get an airline credit card (or any credit card) for expenses that you were planning to make anyway. The road to financial ruin starts with a credit card, and if you know you have poor spending control, it’s better to leave the airmiles on the table and use a no-frills debit card instead.
To Upgrade or Not to Upgrade
I love flying business class. It takes some of the misery out of travel and makes it almost civilized.
But I’ll be straight with you… Usually it’s not worth it.
I have a rule of thumb for this as well: For flights less than four hours, I won’t even consider paying for an upgrade.
If they give me one for free, I’ll gladly take it. But for short flights, what are you really getting? A little more legroom and a free cocktail or two. If you’re as rich as Jeff Bezos, sure, go for it. But for the rest of us, the money can better be spent elsewhere.
The longer the flight, the more likely I am to consider an upgrade. This is particularly true for overnight flights.
On flights to Europe, Asia, or South America, the seats in business class will often fully recline, allowing you to sleep in relative comfort. Trying to sleep in coach with your seat tilted at a 45-degree angle and your knees being crushed by the seat in front of you is utter misery.
Arriving at your destination well-rested and fed clearly has value. It’s just a question of how much it’s worth to you and what you’re willing to pay.
Buying a business class ticket outright is usually punishingly expensive. But you can sometimes get a fantastic upgrade deal at the last minute. When you check in for your flight, check out the price to upgrade. If it seems reasonable, go for it.
On my outbound flight to Europe last month, I got a fantastic price on an upgrade, so I took it. The deal wasn’t so sweet on the return flight, so I opted to stay in coach.
Now that we’re more than a decade into an economic expansion, it’s a little harder to get a cheap upgrade to business class.
As the economy starts to cool, the cheap upgrades will be back.
Be on watch for them.
Hotels: Take Transport into Account
I try to scrimp on hotels when I can.
There are times when the hotel is the destination. For that, you should plan to spend accordingly. You don’t want to cheap out on your honeymoon or a romantic getaway and ruin the experience.
For most travel though, the hotel is a place to crash and nothing more. I’m rarely willing to pay more than I have to.
Cheaper isn’t always better. You have to factor transportation costs as well. It doesn’t make sense to save $10 per night on a hotel room if you’re going to end up spending an extra $50 per day in taxi fare. Plus, your vacation time is a precious commodity. You don’t want to spend your entire vacation commuting in from a hotel on the fringes of the city.
So, as you look for hotel deals, make sure to check the hotel’s location on Google Maps to see if it’s close enough to the attractions you want to see. I’d gladly take a less luxurious room or pay a slightly higher price to be in a convenient location.
Alas, my pleasure travels are over for the time being.
Hopefully yours are just getting started.