The Cost Of Analysis Paralysis In BRS

Those lucky few that just joined the military in 2017 get to have instant 5% matching in their TSP if they Opt-in between 01 January 2018 and 31 Dec 2018. Otherwise you would have to wait 2 years before becoming fully vested! This is not the case those suckers that joined after 31 Dec 2017 only get 1% automatic match after 60 days and then 4% additional match after 2 years! If you are planning on never doing 20 years in the military then this is a no brainer to have opted into BRS in January 2018. The chart below is from the DFAS handout found here.

For those new O-3s that are still on the fence, I made a handy guide that shows how much money you have thrown away in match today, and what is worth after 30 years of compounding at the 2% with G Fund:

Base Pay Match Lost 30 yr @ 2%
Jan
$4,143.90
$0.00 $0.00
Feb $4,143.90 $207.20 $375.31
Mar $4,143.90 $414.39 $750.61
Apr $4,143.90 $621.59 $1,125.92
May $4,143.90 $828.78 $1,501.22
Jun $4,143.90 $1,035.98 $1,876.53
Jul $4,143.90 $1,243.17 $2,251.83
Aug $4,143.90 $1,450.37 $2,627.14
Sep $4,143.90 $1,657.56 $3,002.44
Oct $4,143.90 $1,864.76 $3,377.75
Nov $4,143.90 $2,071.95 $3,753.05
Dec $4,143.90 $2,279.15 $4,128.36

Now for those that have been in 8 or more years and are a O-4, but recently married some one that is about to hit their 20 in AD. Then it might be worth switching over for some free money in your last few years of Active duty if you are planning on getting out and not hitting 20 on your own:

Base Pay Match Lost 30 yr @ 2%
Jan
$6,601.20
$0.00 $0.00
Feb $6,601.20 $330.06 $597.86
Mar $6,601.20 $660.12 $1,195.72
Apr $6,601.20 $990.18 $1,793.57
May $6,601.20 $1,320.24 $2,391.43
Jun $6,601.20 $1,650.30 $2,989.29
Jul $6,601.20 $1,980.36 $3,587.15
Aug $6,601.20 $2,310.42 $4,185.01
Sep $6,601.20 $2,640.48 $4,782.86
Oct $6,601.20 $2,970.54 $5,380.72
Nov $6,601.20 $3,300.60 $5,978.58
Dec $6,601.20 $3,630.66 $6,576.44

For the rest of us here is what our LES shows since Feb 2018:

Since I opted in January 2018 the match did not show up until my February 2018 LES. The AGCY-AUTO is 1% and the AGC-MATCH is 4% of my O-4 base pay just like Chart 2-1 of the DFAS guide promised. I hope that more people take this BRS thing seriously, and not wait till December 2018 to realize how much money that screwed themselves out of.

-Derp

Booking Co-Pilot Seat With Points

I love XKCD and I came across this comic long ago:

Turns out you can actually get a commercial flight where the co-pilot seat is an option for passengers. On some Cape Air flights the seat next to the pilot is open for passenger use (Video Here). This of course does not give you legal control of the plane like in the comic.

I was looking at a flight from ORD to DEC and was suprised to see that Air Choice One no longer services that route. They had lost the EAS route to Cape Air. Of course the big wigs at ADM wanted SkyWest with their CRJ-200 jet planes, but let’s face it that was not going to happen for awhile. For General Aviation Plane geeks like myself, I was happy to see a change to another company.

Cape Air has an even smaller plane than the Cessna Caravan that I took last time. The Cessna 402c has two piston engines, and because of it’s tiny size there is no requirement for cockpit doors or even any restriction of needing more than one pilot. On top of being able to fly in row 1 seat B next to the pilot, I was able to book this adventure for 1.5 cents per US Bank Altitude Card Points! I just went to their portal and found the flight for 3,933 points. The flight is normally $59:

The booking engine then uses Hahn Air of Germany to book the flight at 1.5 cents per point:

Now I earned the points by getting 3 points for every Apple Pay transaction I ever made. For this flight, the 3,933 points came from $1,311 in Apple Pay spend. Now if you get the card it comes with 50,000 points and they have been good at waiving the $400 annual fee for military. I get noting for the referral, but you must have an existing relationship with US Bank to get the card. I outlined my experience here in my first month of use.

I will let you know how it is from the flight deck!

-Derp

7.96% Return on Derp Report Portfolio

As promised I cashed out exactly one year after investing $12,275 and 202,000 Membership rewards points as well as receiving the $200 bonus in my Charles Schwab Derp Report Portfolio. Keep in mind I took out the free $200 new account bonus from the cost, and then I considered the 202,000 at the 1.25 cent valuation I got for it in using the AmEx Schwab transfer. The numbers are kind of bleak:

Ticker Quantity Price Bought Price Sold Dividends Gain/Loss Fees Net Profit
PUTW 100 $28.33 $28.11 $102.41 -$22.00 $0.06 $80.35
SCHE 200 $24.20 $28.20 $129.26 $800.00 $0.13 $929.13
PCY 200 $28.79 $27.87 $247.14 -$184.00 $0.13 $63.01
SGOL 13 $119.46 $127.50 $0.00 $104.55 $0.04 $104.51
Totals $478.81 $698.55 $0.36 $1,177.00
% ROI 7.96% Total Invested $14,783.95 Total Returns $1,177.00

You can see if I had just put it all into SPY (S&P 500) or VTI (Total Market Index) I would of greatly outperformed myself in the same period:

Even worse is the fact that I could of used the 202,000 MR points for $4,040 in flights since I had the AmEx business Platinum card at the time which was offering a 50% points back when used to book on the airline of choice. In the end the $200 bonus was not even worth it to tie up $12,275 for a year. I did get $200 in Uber credit (one year) and then another $400 for AA Gift cards ($200 in 2017 and another $200 in 2018) from my new AmEx Schwab Platinum

At the 6 month mark I was getting exactly the same return as you can see the dividends and year end capitol gains made up for the devaluation of share prices! I never did sell at 6 months, because I decided to wait one year in order to capture the long term capitol gains tax treatment. So this is a rare event where a blogger shows proof that they suck at this whole investing thing and should just stick with filling teeth.

My wife on the other hand deposited $1,000 and got $100 in Schwab bonus and spent 40,000 MR points to buy 70 shares of DSUM at $22 a share costing her $1,540. If she was to sell today she would get $1,703.80 at $24.34 a share.

Too bad the market is closed for Good Friday! If we include her $163.80 in dividend as well as subtract her $100 bonus we get $218.92 in profit at a cost of $1,440 for a sweet 15% return!

Her single ETF portfolio had outperformed me and Morgan Stanley! She had picked it because of its very cute name for the Hong Kong Breakfast of Dim Sum as the RMB bonds are traded off shore in Hong Kong.

Meb Faber’s 99th podcast touched on this subject about how investing time is more important that investing money. At my current age I should be investing time in family, working out, and working on the next step in my education. This will allow me to improve myself and increase earning potential. It takes a shit ton of work to beat the index, and I should of done the set it and forget it thing with Vanguard indexing.

I should just not seek alpha (excess returns above indexing) because it takes so much time, and just be happy with beta (expected returns on the index). The time it took to make less money than SPY or VTI, I could of studied for the GRE and gotten into residency. I hope that is a better investment in the future!

-Derp

 

 

CitiBank Denial of MLA Waiver For AAdvantage Executive

Looks like we are getting some pushback on the generosity of the interpretation of the MLA from Citibank. This change of mind became apparent just weeks after the datapoint of getting denied MLA annual fee waivers for the Alaska Airlines by Bank of America. Senior O-4 reader reporting in from his Miami trip noted that when the MLA was instituted in October 2017 he was able to get the AAdventage Executive card’s $450 annual fee waived for his wife. However when he got the card for himself a month ago he got a different response. They are no longer counting the $450 as an excessive and unreasonable fee and therefore not waving it under MLA protection. I am assuming because the Lounge Membership for the Admiral’s club is worth $500 if you got it directly. So these last datapoints are reminiscent of the Barclay $995 annual fee shutdown two years ago.

So you all have been warned that this fee waiver route has been shut down for Citi and Bank of America. On the Brightside, I just got the Iberia Avios card from Chase and instantly got a MLA protection letter from Chase even before the card got to my house. AmEx fee waivers seem to still be going strong! So please use the following links for known good fee waived Chase and fee waived cards here (for amex).

-Derp

Spending at Sky Club Triggers $100 Credit On Plat Delta Card

Thanks Gary from View From The Wing for the link to this site!

I spent 16,500 Delta Skymiles on a flight from ORD to DCA via CVG which normally runs about $282 one way. I was able to get about 1.7 cents per point which is not great, but not terrible. In hindsight I could of gotten 2 cents per point by popping $250 Champaign bottles at ‘da Delta Sky Club.

I might cash out all my points for bottle service in Atlanta’s most exclusive club at ATL. It is high security, everyone gets searched on the way in, and you got to be on a Delta flight just to get in. It is not a bad way to use points just like these kids did. I really am not kidding on this one, who is down to drop points for champs before the next devaluation?

I just got this card last week and I already spent enough for 70,000 points worth $1,400 in drink redemption. This could buy 5 bottles of Dom Pérignon and $150 worth of other drinks. I asked at CVG if they had Dom, but they said only the larger hubs have that sort of thing.

Instead I decided to get a nice glass of Bourbon since I was in Kentucky. I got a single barrel for $14 and charged it on the Delta Platinum.  Today I got the $100 credit as part of the 70K bonus miles, 10K MQMs, and $100 statement credit. Last time I bought a $50 gift card before which works. I wanted to buy an inflight beverage, but they didn’t have service because both flights were too short.

Please use my link here to get the same deal.

-Derp

MLA for BoA: Denied AF waiver for O-6 Reader

An O-6 from Jacksonville just called in to report that despite his best efforts with Bank of America. He was unable to get MLA protections to get his $75 annual fee waived. I logged into my account and did not see a new annual fee charge, but the charge back in Nov 2017 was reimbursed.

I suggest we proceed with caution here with any BoA products till more datapoints come in. As of opening his card in January 2018 he did all the paperwork I did but was unable to get the $75 back. Report back below for those out there that denied!

-Derp

iberia Avios by Chase

Thanks to an O-5 Okinawa reader that alerted me to the new Iberia Avios product from Chase:

There is already a lot written out here, but I just wanted to document two excellent datapoints for active duty here. The O-5 applied 17 March 2018 and was instantly approved despite being well over 5/24. I applied today 20 March 2018 and I was instantly approved as well despite having an incredible 24 new cards in 24 months! I assume the $95 annual fee will be waived per the MLA as all of Chase cards opened by active duty after September 2017. I will post this info here once I find out myself.

Count all my 24 accounts and weep! There was an hard pull on my credit for this product.

Despite my staggering collection I got approved in 30 seconds:

I am sitting on two Avios cards now: Chase British Airways as well as Chase Iberia. BA and Iberia are both airlines which I never have flown on, but use their Avios points system hard. I got the cards for the bonus and use it exclusively on Domestic American Airlines flights as you can get round trip flights including all connections based all on distance! The redemption chart is here:

12K Avios can get you a 600 to 1,000 mile flight round trip (including all segments) which is much cheaper than the 15,000 same Avios via British Airways per segment. You can also transfer points from British airways Avios, Membership Rewards, and Ultimate Rewards. If you hit both cards up you can get 150,000 Avios worth 12.5 round trip flights. The best overview article is over here at frequent miler. A handy map of airports in the 1,000 mile radius from ORD is right here:

I will report soon on the MLA waiver on this card as well as redeeming my first flight.

-Derp

Reanimation of Closed AmEx Cards

I have had a rough time with AmEx lately. The first lied to me about the waiver of the 5th card rule. I ended up closing my Ascend/Surpass to get the Aspire. Then I wrote about my woes regarding closing my Hilton Surpass Card instead of my Delta Gold card since the Delta gold was useless other than for referrals only. I then got this email from reader Dan:

hey, just fyi   i was able to reopen a basic hilton card a week after closing it, once i realized i closed an opportunity for a second aspire.  it actually worked out perfectly, i just chatted with them online, they approved the reopen, sent me a new card, then after receiving it i chatted again and they upgraded to aspire  with original military benefits intact. so as of now i have 2 aspires and my wife has 1.     i read online somewhere that you might be able to reopen an account up to 30-60 days after closing it

I am happy for Dan being able to get essentially 2 Aspire cards with fee waiver and $500 in Hilton Resort hotel credit (good for the Tropicana LV room rate) as well as $500 for airline gift cards. However I am sad to report I was unsuccessful in bringing my Hilton Ascend (Surpass) back to life. I asked online and over the phone and both times sounded promising. They asked me to close another card in order to reopen the Hilton Aspire. I chose the Gold Delta which they immediately closed, but in the end they cited the bullshit reason was that the credit limit had been set to $0. My ascend card was to remain dead, and I had an empty slot open! I think they are on to me and my double dipping. They asked me kindly to reapply, but instead I will upgrade my wife’s Aspire to an Ascend, and I went ahead and applied for this because I was getting tired of the Hilton Points game:

Use my link here if you want to get the Delta Platinum. In the mean time use Davey Nelson’s link here if you are still interested in the Aspire!

-Derp

Guest Post: AmEx Gold & Green to Platinum

Reader Dan just sent me an email reporting another benefit of separating you accounts to separate logins. Full disclosure: I have all of my accounts under a single log in, and when I add a AmEx deal to one card it takes it away from other cards. This was not apparent to me until I read this Frequent Miler article here. Also O-5 reader from Pensacola reiterated the benefits of separate accounts over the phone. As long as you have a log in that contains both an AmEx Platinum, and the Hilton Aspire it might be worth it to make new log in accounts for each card you plan to upgrade in 12 months. Reader Dan reports below:

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San Diego: Churner’s Paradise

Thanks to contributor LT Howie and Train Wreck Trader, I had another amazing adventure in San Diego! SD is just a wonderful town with some of the best beach views just steps from the best happy hours I have seen (in PB of course). I just wanted to crank out a quick post of things learned with my quick trip here.

Harrah’s Southern California Resort And Casino – Funner, CA

There is a smoky casino about an hour north of the city that participates in the Cesar’s Total Reward Program. I am not much of a gambler, but I have Diamond Status with Cesar’s that I got with my Founders Card. This point system also matches status and provides points transfers to the Wyndam rewards. You could earn points on booking a Total Rewards property and transfer them to Wyndham and book a nice hotel for 15,000 points.

 I didn’t stay the night here, but sung by and took advantage of their Salute Card program which gave me a free buffet that I had to use in 24 hours. I decided to sign up and treat myself and Davey to a free dinner. This is offered for all active duty, but it appears to be a one time reward on sign up. The gaming was unremarkable, we ended up playing the most complicated version of Pai-Gow at $25 a hand, something that I don not recommend ever doing again.

The Diamond lounge was free for a limited time only (till 31 March 2018) for diamond members with less than 25,000 tier points. After that there will be a fee to enter. Not a bad lounge, free fountain drink, and energy drinks at the bar. Boozes were not free.

More to come once I get off this flight…