Poll:Do you include CC bonus points in your net worth?

[sengsational]

In http://www.early-retirement.org/forums/f28/poll-are-current-credit-card-charges-debt-83551-3.html
we discuss the all-important topic of whether your credit card bill that's paid off monthly is debit or not. But what about the asset side?

Collectively, we probably have billions, or millions, or maybe just thousands in assets that could increase our FIRECalc success percent. It's right in front of our eyes, yet it might not make it into the balance sheet: Discover card bonus points (and equivalents).

Do you include these assets in your net worth? Are they managed in your financial tracking software?

[Helena]

.

I don't put enough on my cc each month for the rewards to affect net worth.

[Meadbh]

If and when I convert them to cash, they become included in the cash portion of my net worth. That happens about once a year, and it is a very small amount. When I do annual my net worth calculation, I do not search out the potential monetary value of points, because it is not material.

[Fermion]

I did when I had 200,000 miles with Capital One. I counted it as $2000 and eventually took it all in Amazon and Walmart gift cards at $100 per 10k miles.

[Nemo2]

Our bank CC is affiliated, (in a limited manner), with Expedia......we redeem points, (IF Expedia offers the best deal, otherwise we book elsewhere and maintain the points/dollar value in reserve), on flights/accommodation/cruises etc.

[pb4uski]

Immaterial.

[Car-Guy]

I typically only have a few hundred dollars in accumulated points before I cash them in. Not enough to even consider in round offs when I'm calculating net worth.

[travelover]

No, but I do include the coins in my couch cushions and the deposit bottles stored in the garage.

[48Fire]

Wow, no

[FUEGO]

No.

I have around 1.3 million points or miles right now spread across a few airlines and one hotel. Collectively, the are worth around 1.5-2 cents per point/mile. So that's about $20-25000 in value.

I don't count them in my net worth but I do incorporate them in my FIRE financial plan by mentally adding several thousand dollars to my travel budget each year. We currently have $10,000 per year in the travel budget, but with all these points and miles we can actually get $15k+ of travel in by getting free flights and hotels.

For example, on our 7 week trip to Mexico last year, we spent $4500 cash plus received another $4500 or so in free travel (10 one way international flights; 6 (??) free hotel nights that would have cost $80-220/nt). This year, I'm about to spend 300,000 points on five round trip tickets to Europe plus five one way tickets within Europe. That will save us $5000-6000+ compared to paying cash.

So the net impact is that I can expect around $5k+ worth of points/miles each year indefinitely which means I need $166000 less in my portfolio (at a 3% SWR) to spend what I want in my travel budget.

[Rustic23]

I just figured it out. My credit card rewards is equal to 2.08333333333333e-4 percent of my approximate net worth. This is the last and only time I will calculate it.

[mamadogmamacat]

NW nah But i only calculate NW perhaps once every 2 or 3 yrs..a check on how it is trending. I do include the now approx. $2500. in my 2 to 3 yr cash cushion to carry me thru a downturn

[Aerides]

No, i use those for bonus things so I can get a new shiny and say "but that was free!"

[Lucantes]

Quote:

Originally Posted by Meadbh If and when I convert them to cash, they become included in the cash portion of my net worth. That happens about once a year, and it is a very small amount. When I do annual my net worth calculation, I do not search out the potential monetary value of points, because it is not material.

+1 and Wow for the poll on this topic!

[Fermion]

I thought $2000 was reasonable amount and definitely the $20,000 to $25,000.

Figure that $2000 is more interest than you get in an entire year with $100,000 of 10 year treasury bonds.

[Golden sunsets]

Quote:

Originally Posted by FUEGO No. I have around 1.3 million points or miles right now spread across a few airlines and one hotel. Collectively, the are worth around 1.5-2 cents per point/mile. So that's about $20-25000 in value. I don't count them in my net worth but I do incorporate them in my FIRE financial plan by mentally adding several thousand dollars to my travel budget each year. We currently have $10,000 per year in the travel budget, but with all these points and miles we can actually get $15k+ of travel in by getting free flights and hotels. For example, on our 7 week trip to Mexico last year, we spent $4500 cash plus received another $4500 or so in free travel (10 one way international flights; 6 (??) free hotel nights that would have cost $80-220/nt). This year, I'm about to spend 300,000 points on five round trip tickets to Europe plus five one way tickets within Europe. That will save us $5000-6000+ compared to paying cash. So the net impact is that I can expect around $5k+ worth of points/miles each year indefinitely which means I need $166000 less in my portfolio (at a 3% SWR) to spend what I want in my travel budget.

Wow. That's a lot of points. Did you earn them prior to your retirement? How do you plan on having that amount of points indefinitely, without charging large dollars annually on the cards?


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[ShokWaveRider]

No.

[Danmar]

Really? Is this a joke? Way immaterial. What about gas in your car's tank or utility deposits?

[DrRoy]

CC points are small change. Frequent flyer miles and hotel points are worth more, but I don't count that for NW. Still small on that scale.

[Bestwifeever]

Some people seem to enjoy managing CC points, like a hobby, and the points make up a big part of their leisure budget so they maybe should be included. We just credit them against the account once in awhile--they really aren't on our financial radar.

Are points and other rewards a legal obligation on the awarders (and a liability on their balance sheets) or do the awarders have the ability to change the programs and the rules on rewarding existing points? If the points can be taken away, they probably aren't really assets til they are redeemed for cash. I don't think you'd list them on a mortgage application.