Transcripts Including Tag: travelrewards

Description: Expenses :: Travel rewards

These are the transcripts that include the tag travelrewards.

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001: The Journey Begins Brad Barrett So our goals are really twofold here with with the Web site the podcast the community. It's really to take the entire financial independence retire early community or the fire community and build a gathering place to bring everyone together. There are so many of these separate silos. There is the real estate community, there's the bloggers, the minimalists, people who focus on efficiency, investors, entrepreneurs, travel hackers, and we want to create this place to bring those separate tribes together. So for those of you who are in this space we want to help you reach a new audience with your message. We want this podcast to be the source for the fire community. And if you're just discovering this podcast for the first time, maybe you're discovering fire for the first time, maybe you saw an article about Mr. Money Mustache somewhere and it led you down the rabbit hole and you found us. We want to teach you what financial independence is all about, and most important we want to convince you that what society has told you is the American dream. That really sucks frankly. And you're going to wake up 20 years from now you're going to be broke just like everybody else. If you follow that American dream. But if you can just make a couple of small changes and follow what this community is doing you can wrest control of your life. You can get freedom. You can reach financial independence. You're not going to be beholden to corporate America the government whatever else is holding you back. You are going to have the control in your life and honestly it's pretty easy. It's not a short process but it's an easy one. And once you're there it is truly magical it's transformative.
002: The Power of Failure Brad Backstory Brad Barrett Yes so I mean there are as we know thousands of personal finance sites and I would say I would say it's twofold. One is personal relationships I feel in life and business even though this is the online world right. Personal relationships still matter. They matter really more than anything you know once you're minimally qualified. Right. In just about anything it's creating and this is not networking in that scammy kind of here's my business card. Look how great I am type of way. But just creating genuine personal relationships. And I've gotten links and people helping me out just because I was a genuine person and I help them out and I'll kind of come back to this in a minute. But really where my site gained some attention was was through this concept of travel hacking and we'll talk about this in the future in depth. But basically using credit card rewards points to travel for free or close to free. And I wasn't the originator of this concept by any stretch of imagination. You know I came into the game pretty late but what I wound up doing was researching a trip to Walt Disney World for my family. There are millions of families who go to Disney World every single year. And it's expensive. It costs four to five thousand dollars just for the hotel the flights the park tickets. I mean it's ridiculously expensive and I kind of realized OK maybe there's a way to tie travel hacking into this trip to Disney and also on my website because I know if if my family could benefit from this that the hundreds of thousands if not millions of other families could benefit as well. So I had it in the back of my mind that this is something that could take off. Like this is something that could really resonate with people and get national level attention.
002: The Power of Failure Brad Backstory Brad Barrett Yeah so from the bloggers perspective from my perspective as the web site owner it was how can I help people do this and how can I earn some money in the process. Right. And I think ultimately if you can get your incentives aligned properly where you're not screwing over your audience or doing something terrible like that's not what I traffic in mine is a win win scenario. Right. So my thought was here's what I can do. I can work with people essentially one on one you know kind of take it as a hybrid business. This was this was what I was thinking and this kind of goes back to what we talked about in the first episode which is taking a skill set getting this toolbox of information that allows you to look at problems in a slightly different way. Every single person who in the travel blogger space they are all about online. Right it's just produce as much content as you possibly can get as many visitors and just by sheer the Law of Large Numbers you're going to make some money. Well I realized my site was never going to get in all likelihood millions of visitors. But what I could do was look at look at the numbers like an account and say oh wow you know these credit card affiliate programs actually pay reasonably well. And if I can help someone one on one they can put together this trip to Disney World or wherever it may be. But I did focus on Disney. They can save thousands of dollars they can get all of these points. They can tell friends this could spread. You know they're getting this trip for free. I'm getting money from the credit card company so all the people who I'm working with all they had to do was just simply click on links on my web site. There is no harm to them. They obviously were only going there if it was the best possible link. So again incentives online.
002: The Power of Failure Brad Backstory Brad Barrett Yeah that's exactly right. And being an expert quote unquote I don't love that word because I think a lot of us still have that imposter syndrome where you know we talk about down the road but being an expert is being better than not better than but knowing more than 95 percent of people and clearly I have that on travel hacking. you know am I the world's foremost expert on travel hacking. No I'm not.
002: The Power of Failure Brad Backstory Jonathan Mendonsa I mean if you go if you go meet if you go down to just some sort of meeting place say a library and you find 100 people and you ask them about travel hacking. They're going to think you're talking about putting extra stuff in your suitcase. I mean they're just people just don't talk. So it's a pretty low bar to be even a moderate expert in that space.
002: The Power of Failure Brad Backstory Brad Barrett Yes. Yes. So yeah that's how we got to know each other. He was another personal finance guy who was interested in travel hacking and you know somehow or another we came across each other or just started emailing and spoke on the phone a couple of times just this perfectly organic friendship like we're talking about right. And I had this idea in January of 2015 for a travel hacking course we called it which to people in the know in the blogosphere it's just it email auto responder but it was more than that. It was again we build it as this course and it was at the time it was 30 days and you know we've iterated a million times since then and got it down to shorten that. But it was an e-mail a day for 30 days and we would give you bite sized lessons at the end of that 30 day period you would be able to confidently move forward as a travel hacker both on the earning and redeeming side.
002: The Power of Failure Brad Backstory Brad Barrett It was originally that one that was where we got mentioned for the Disney the Disney article literally the writer just saw that article in New York Times they didn't even interview me. I don't believe for that. They just wrote it up about it. And I actually have an interesting story about life hacker that ties into the personal relationships that I was talking about 10 minutes ago which is I had befriended a writer she had her own personal finance site. I helped her with travel hacking personally. So this was part of how I got my name out there which is I offered my time and advice and expertise for free to anybody. It wasn't just bloggers. This was not some master Machiavellian plan to become successful this was I would help anybody that came to me. And you know my name got out there in the personal finance blogger community that hey this guy knows what he's doing. He'll jump on the phone with you for 30 minutes and help you out. And he's not looking for anything in return. Yeah. And I wound up helping someone a couple of years before and I went up writing her an email just to say hello and tell her about this project that I was doing with the Disney World trip and just seeing if she could help in any way. And she said you know no it doesn't really fit into my audience. Really targeted towards millennials. But she's like you know I do write for life hacker and I could see my editor be interested in like a ask me anything Q&A with you just for credit card rewards or travel hacking and I'm like OK you know that sounds amazing.
002: The Power of Failure Brad Backstory Brad Barrett Yeah and well I appreciate that. And you know so that was that was what we thought of right. So you know this is something that can scale because it doesn't matter if we have one person sign up a day or 10000. It's just an email service. Right. So we spent a boat load of time putting this course together and creating these videos creating all this content and really coming up with a sequential way to teach people travel hacking. And I guess you know the most interesting thing is that we started advertising this quote unquote advertising will talk about that in a minute. But advertising it before we even had a course literally. So we are both members of the Mr. Money Mustache online forum community which is you know one of the most thriving if not the most thriving personal finance community online certainly in the fire community. And we up just putting a post saying hey everybody we'd love to help you travel hacking is perfect for mustachians. And this is the perfect community we want to help. We're going to take our knowledge put it together and this course sign up. It's FREE. We're not looking to get anything out of you and we end up getting something in the first couple of months we we're getting maybe like 500 people to sign up. That's awesome just from this one post essentially. And then we put that post up before we had created the first lesson of the course. So it was a sink or swim moment because we said that.
002: The Power of Failure Brad Backstory Jonathan Mendonsa Brad has been featured on multiple podcasts and video podcast over the last several years. And I've always wanted to go deeper into this because it's not just the travel hacking it's not just it's not his specific course or his specific site it's the perfect example that thousands of other fire community members and bloggers and business owners have gone through. It's this process of sharpening the steel and figuring out what your goal is and getting you a little bit closer in learning a new skill and then learning how to turn that. And you always hear well you learn best from your mistakes or you know well that was his success but he's got a lot of failures behind him. That got him there. But this is what it actually looks like. I mean this is your. Yes. Yes. You have failures but what are those actual gems that you're finding in the failures What are those what are those things that you're learning from it and how are you using those in the next ones. So what I'm hearing specifically in this last transition is scalability. Are you going to when you pick a goal if at the end of your goal you have to be there every day and you're helping one person and that's the most you can help before you have to get a second person to help another person you're screwed. That business model is not going to be sustainable for you or gets you to where you want to be. You have to be at a place where you can affect thousands and hundreds of thousands and have the opportunity to affect millions of people. So when you take your idea and you learn all these skills the next step is figuring out how can I reach the masses and how can I make this a win win for me and for them because they're all going to win. But if they get excited about it and are using my services I'm going to win too. So thank you Brad I really appreciate you coming in and sharing your story with us today.
005: Dave Ramsey Brad Barrett Yeah I think that's going to be really interesting for the audience just because I know essentially nothing about Dave Ramsey. I know he has some steps. He has something called the debt snowball I believe. And I also know that he's very anti credit card and I am potentially you know very pro credit card and in many instances that's a lot people know about travel hacking. So yeah I mean I think I think this will be kind of cool to come in this you know into this as me essentially knowing nothing and we can talk through it see where we agree disagree and kind of go from there.
005: Dave Ramsey Jonathan Mendonsa So let's say that I'm very close to step seven. Yeah. OK. I'm getting there. For me there's a couple of things that I'm going to do one I reject Dave Ramsey's approach on taking out debt for real estate I have no problem with it. He crashed and burned but there were a lot of other circumstances surrounding that. I feel like there's probably a better way of doing it than he did it. And so I plan on tiptoeing into real estate starting in a couple of businesses so I started two new businesses this year. Now neither of them have made me a single dollar. I think that it's important to point that out. I have not earned a single penny in passive income from my businesses and I am completely ok with that because I plan on growing them and they will. They will return money for me at some point and I am growing them from scratch and it's pretty cool. I mean I'm learning a bunch of new skills it's engaging my brain. I'm planning on starting two more businesses next year so I mean these are different things that I am approaching and enjoying. Also I'm learning new skills like travel hacking. Dave Ramsey hates credit cards. He hates them and you know he's talked to a lot of people were they have ruined their lives. But that doesn't mean that we need to completely throw out credit cards. Credit cards have a very useful place in my life and we're able to use credit cards to allow us to travel the world for free and without spending a single extra dollar to still be extremely frugal and self-controlled. And get five to 10 grand in free travel each year nobody knows about that and you'll never know about that. If you're only listening to Dave Ramsey by actually talking to other people and learning new techniques and actually that was one of the things I learned when I met Brad is just this wonderful world of travel hacking that there are literally hundreds of thousands of people that have figured out a way to travel the world for free. And that's another thing that I'm looking into it of but a lot of fun and I think you all are going to get experience of that. So one of the things that we want to do is we want to one share with you where we've been and where we're going. And two the things that we have discovered the things that we're really good at how we got there what our decision tree was how you can get started if you want to do that and we want to make your life simpler. We want to make your life less expensive and then we want to open up doors for you if you want to try some of the things that we're trying.
006: The Power of Partnerships Jonathan Mendonsa So I would say probably eight months ago I was listening to a podcast and I was listening to the mad Fientist podcast who interviews influencers in the financial independence space and he interviewed Brad and Alexi who had a site travel miles 101 and he was really interviewing about what travel hacking is and how they got where they did. And that was my first introduction to Brad and I found out through that episode that he was in Richmond and I am very interested in this space although I had not yet started to build any sort of business myself and when I heard that Brad was in Richmond I reached out to him really just to have a conversation and talk a little bit more about travel hacking. And Brad agreed to meet me and we met up for lunch and we just got to hash out all these different ideas and it was awesome.
006: The Power of Partnerships Brad Barrett Yeah we had a great conversation over delicious burgers and I am someone who always wants to take these lunches or take a phone call with someone. That doesnt mean if you email me and say hey lets hop on the phone I'm going to do it with everyone obviously my time is finite and I do guard it because I have a family and such but Jonathan seem like a really super cool guy. He lives right here in Richmond VA with me and I was thrilled to sit down with someone whos in this quote unquote space which is you know for me it's it's just being aware of personal finance you know financial independence travel hacking was how he was introduced to me I suppose so we had a lot to talk about. You know frankly like in real life there aren't that many people that you can talk to about this right.
006: The Power of Partnerships Jonathan Mendonsa So now Brad and I three months four months later have created something that has the potential to be this platform we've gone from nothing and we've created this idea and there's nothing more powerful than an idea this place that people can meet from different walks of life but they have this one thing in common this financial independence and we can all get better together I can get better from Brad. He's going to learn stuff from me and we're going to learn stuff from your audience. And I'm amazed at how quickly this all came together. It came together so quickly and I have to look and say all right was there anything there that it was just us it was only something that we could have done. Or is there any actionable tips that we could put back out there into the community to say hey these might be useful to you you might want to take a look because I think this is what allowed us to get here this quickly and I think that there is so here's what what I've come up with as I've as I've looked at this one if you're going to find a partner find someone don't find someone that's completely at the finish line find someone that is one or two steps ahead of you. So in Brad's case I think he had developed himself as a genuine authority in travel miles and travel hacking. People do respect him in that space. He knows what he's talking about but I could tell he also had an interest in financial independence. I've never seen him not wear a T-shirt that's branded with some type of financial independence label. And that is the space that he loves. In fact his other site Richmond saver's is dedicated to that. Now that is not a national platform that's a that's more of a it attracts seems to attract more people from our local geographic region. But I could tell that there was real potential there and that he was ready for that next level spotlight. He had been on multiple podcasts. He has a great speaking voice he has an engaging personality. People connect to him frankly at a level that I can appreciate. But I am not as good at it. And that is powerful. I enjoyed listening to him and I would like to hear him talk more about things that are that are relevant to me so I guess what I'm trying to say is when you're finding someone when you're thinking about someone as a potential partner I think that there's something there. You can't go to that person that has it completely all figured out they've got a complete business model that's running begin and because they don't need you or have time for you. There was room and Brad's life for someone to help introduce a new project and take it to the next level. He wasn't at the finish line yet. He was he was really close. He was really close but he wasn't completely at the finish line yet. And so I had to bring something the table and so I brought an idea and I brought sweat equity I built something from the ground up and then I was able to merge that with his site authority. I mean he has an incredible amount of authority on the web now in this certain space and we can leverage that into creating this new platform and it will jumpstart a Web site that frankly should have no business being ranked into something that's going to be seen all across the Internet very very quickly.
009: Travel Rewards Jonathan Mendonsa They are according to Mr Ramsey. They are evil and so I just ignored them and had my one single credit card that I got my 1.5 percent cashback on and that was basically it. In the meantime Brad was teaching people how to travel the world for free.
009: Travel Rewards Jonathan Mendonsa And this was my plan. I was I was saddled with this plan. I wasn't excited about it but I was very grateful that she married me I definitely married up. And that was going to be what we were going to do. And when you're paying for a trip like this these are obviously with post-tax dollars. So in order to save six grand you've got to earn close to 10 grand. And then I heard Brad on the Mad Fientist podcast talking about travel hacking now. Now I had heard of travel hacking before but to be honest with you I was a Dave Ramsey guy and I kind of just ignored it as probably something that people did that were really reckless with credit cards.
009: Travel Rewards Brad Barrett Yeah I think Jonathan is exactly right. And the reason why this chase gauntlet exists is chase now has a rule that is loosely known as five 24. What that means is Chase will deny you getting approved for a new credit card if you have open five or more credit cards in the prior 24 months. And it's not just chase credit cards it's any any credit card so that any credit cards from any bank including and this is important including authorized user cards. So for instance what my wife and I used to do was I would open up an account in my name but say the Southwest premiere card right. I would add Laura as an authorized user and then we would both put our normal spending on there and hit the minimum span and then put the card down. And then in that case Laura would open up a Southwest premiere card that's another crucial point is that each each person can open up a card in their name and social. So that's important. Just kind of a sidebar. But in that instance for my account my southwest from here I would get one card against my 5:24 and Laura would get one card against 5:24 because she was an authorized user on my account. So that incentivizes you to not add authorized users at this point that is now a losing strategy.
009: Travel Rewards Jonathan Mendonsa And I think one of the reasons that it's really cool that you're listening to this podcast is if you just haphazardly got into travel hacking and were doing it without a strategy you could be too far along to go back and collect some of these. And I would say that even some of the people that are the best known people in the space wish that they could go back and do it slightly differently.
009: Travel Rewards Jonathan Mendonsa So I wanted to start off just by telling you a little bit of a story and how travel hacking has improved my life in the hopes that it might give you some ideas about how it might help yours. So my wife is from Zimbabwe and she lives with me in the United States and there's some implications for that because her family is still overseas. It is important to us that we go visit them on a regular basis because she's living here but we don't want it to be a situation where we never get to see them or we only see them when they come to us because we're living on a budget. So from the start Danny and I decided that we were going to set aside a certain amount of money every single year to go visit them. And these tickets to Zimbabwe are incredibly expensive running anywhere from 2500 upwards of $3000 and that's for an economy seat. And so that's for one ticket roundtrip and we would need two of those. So we this is not something that we can do every year we would typically set out to save $3000 a year and every two years we would take a trip back home to visit her family.
009: Travel Rewards Brad Barrett All right. So the reason why the chase gauntlet exists is Chase. In my estimation has probably maybe 70 percent of the Tip-Top ultra valuable travel rewards cards. There are other banks certainly. American Express has some decent ones Citibank Barclays Capital One. But Chase is really the be all and all especially to get started. They have many of the co-branded airline cards that are essential like Southwest United British Airways and they also have their proprietary points which are called ultimate rewards and these are the absolute most valuable points in my estimation because they are transferable. OK so what that means is these points sit in your credit card account but they have 11 transfer partners airlines and hotels which means at any given moment you could transfer these points to United Southwest Hyatt British Airways and then a whole list of Singapore Airlines Korean Air. Well we'll talk about that a little bit later. So those points are ultra valuable because they are essentially miles or points in those 11 programs at any given moment.
009: Travel Rewards Brad Barrett Yeah I think that's that's the guarantied drop is when you apply for a credit card. There is a hard inquiry on your credit score. And yet people say it's about a two to five point drop. So that's a guaranteed thing. But that very very quickly drops off your credit score that it's only temporary. I think you'll start seeing the lessening of that within within a couple of months and certainly within 18 months it will be completely gone. So again largely irrelevant in my opinion but yes that is essentially a guarantee that your score will drop about two points for each credit card you apply for. Now that kind of. Just real quickly gets into my second point which was if you're worried about your credit score and every point matters then I would advise that this is not the strategy for you if you have a 7 0 1 credit score and you desperately need to keep it above 700 for some reason whether that's psychological or you're applying for some loan and that's the threshold. Then listen don't get into travel rewards don't get into travel and this is not your thing now. Like my wife and I when we had nearly 800 credit scores when we started this we sat down and we actually had a conversation and we said OK if our scores drop even 50 points and they're 750 does that matter to us one bit. And the answer we quickly came to was no it matters nothing.
009: Travel Rewards Jonathan Mendonsa I would trade 25 points of my own FICO score for for 75 grand in free travel.
009: Travel Rewards Brad Barrett You'd be very very happy with that. That's going to get you any loan the best rate on any loan you can possibly apply for. So for my life that drop of 25 points was irrelevant 100 percent irrelevant. I didn't care I didn't bat an eyelash. I mean I've earned at this point somewhere over 2.5 million points in my miles which I estimate you know at a decent valuation are worth about 50 grand in free travel and that's after tax so probably $75000 in pretax money. So I was very very fine obviously with a 25.
009: Travel Rewards Brad Barrett Yeah I think most people have that question right. Anything in life that sounds too good to be true generally is I'm a pretty skeptical guy pretty conservative financially. I'm a CPA so we're trained to be skeptical and conservative. I tried to poke holes in this. I mean I researched it for dozens upon dozens of hours trying to find OK what's the catch. And honestly I'm six years into this. I have yet to find the catch. I think most people are worried potentially about credit rating. I think that's people's first question and I guess my answer to that is kind of twofold. So first it would be there is a very minimal impact on your credit score. In my anecdotal experience and also like we said at the outset I mean I've worked with many many thousands tens of thousands of people at this point. I've yet to find that one person who even one single person to come back to me and say Hey Brad you screwed up my life my credit score dropped 200 points. This is a sham. I simply have not heard that your credit score is going to go up and down just naturally within 10 20 30 points just within a normal month anyway. Most people don't understand how credit scores work. But let's say you haven't paid your bill yet that month and you have twenty five hundred dollar bill outstanding at that point in time. Your credit score might be 10 or 15 points lower than it would be the day you paid it just because of what's known as credit utilization. So your score does go up and down this is not like a very precisely fixed number but just to talk about myself here for a second. I can give you exact numbers. So when I started travel hacking in early 2011 my credit score was 7 97 OK which is pretty darn good. That's a maximum Well a 850 is the max I would highly advise people and this is my second part of the credit score answer I'll get back to this in a minute but I would highly advise you only doing this if you have a 700 or more credit score. We'll talk about that in a minute. But yeah my credit score at the lowest point it dropped was 25 points. Seven seventy two was the lowest it ever was.
009: Travel Rewards Jonathan Mendonsa Wow. That's that's cool. And as appealing as this is for anybody even entry level middle class this should be even more appealing for your big spenders and your people that are in high marginal tax brackets. For instance let's say you make six figures and you fall in a 25 percent marginal tax bracket. So you have to add onto that your state FICA Medicare. You know you could easily be approaching a 40 percent marginal tax. And for you to spend five grand six grand on travel each year you are going to need to earn seven eight or nine grand. But if you just use the techniques that we're talking about right now you're going to do it for free and you're going to keep all of that money available to you for other resources. So I'm convinced and obviously Brad is convinced hopefully if you're not convinced you're at least listening a little bit closer to hear. You know what's the catch. Right.

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