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The VER System™
A three-step method for airline miles and hotel points, built on the logic you would apply to any portfolio: Value what you hold, Earn the right currencies, and Redeem optimally and only when points beat cash.
1 · The mindset
Points behave like financial assets
Most people treat points as rewards: something that arrives with spending and travel, and gets spent on the first trip they find. That habit costs money, because points have the traits of an investment.
They depreciate
Programs raise award prices by about 5 to 10% a year on average, with occasional jumps of 30% or more.
They are hard to sell
You can't turn them back into cash at full value. A travel portal often gets half of what a good transfer delivers.
Each program is its own currency
A Hyatt point, a Hilton point and an Amex point have three different values.
Every use has an opportunity cost
Points spent on one trip can't pay for another, and the best opportunities appear and vanish within days.
So ask the questions you would ask of any asset: what is it worth, how do I build the right position, and when is it worth spending?
2 · The cycle
Start from the destination, not from the card
Most people work backwards: they collect points first and then look for something to spend them on. The VER System runs the other way, as a cycle you repeat for every trip.
- VALUE Define the trip and price it in points and in cash.
- EARN Build the currencies that reach it.
- VALUE CHECK Before booking, check that this is still the best use of your points: bonuses open, charts change, space appears.
- REDEEM Book it, or pay cash if cash wins. Then the next cycle starts.
3 · The three steps
What each step asks of you
Give each currency three values in cents per point:
- Floor what anyone can get at any time
- Baseline what you can realistically repeat
- Ceiling what perfect conditions deliver
The baseline is your exchange rate. With it, price the trip you want both in points and in cash, before you earn or spend anything.
Hold a few currencies, not a little of everything. Start with about 60% in flexible bank points, such as Chase, Amex or Citi, which move to many airlines and hotels. Hold the other 40% in the programs you will actually use: usually one per airline alliance and one or two hotel chains.
Earn as fast as your normal spending allows: welcome bonuses, the right card for each category, and stacking with shopping portals and partners. Review the portfolio every quarter and rebalance when it drifts.
Buy points only selectively: to complete a specific award you have already found, at a promotional price below what it is worth, when no cheaper transfer exists. Never just to build a balance you believe will be useful someday: always have a clear plan beforehand.
Search before you transfer. Find the award first, and move points only when the seat or room is confirmed: transfers can't be reversed. The one exception is a transfer bonus that cuts the cost of the miles by at least 20%, into a program you already use.
Compare with cash one last time, and pay cash whenever it is the better deal.
4 · The five numbers
Five numbers score every booking
Learn them once and every points-or-cash decision becomes a short calculation.
Market Cost
The cash price of the trip, taxes and fees included, at the lowest fare or rate you would really book.
Out of Pocket
The cash you still pay when you book with points: taxes, fees and surcharges.
Net Cash Cost
Market Cost minus everything paying cash earns you: miles, card points, portal cash back and credits.
Investor Cost™
The points the award needs, valued at your baseline, plus the Out of Pocket cash.
Value Multiple
The value each point delivered, divided by your baseline. 1.0× means exactly your baseline.
5 · The Redemption Value Ladder
How good was the redemption?
The Value Multiple places every redemption on one of five tiers. A redemption that delivers 3.6¢ per point on a currency with a 1.8¢ baseline is 2.0×, in Tier 2.
| Tier | Name | Value Multiple | Share of redemptions |
|---|---|---|---|
| TIER 1 | Aspirational Play | 4× and above | Opportunistic |
| TIER 2 | The Sweet Spot | 1.5× to 4× | 60 to 70% |
| TIER 3 | Solid Value | 0.8× to 1.5× | 20 to 30% |
| TIER 4 | Last Resort Only | 0.5× to 0.8× | Under 10% |
| TIER 5 | Value Destroyer | Below 0.5× | Avoid |
Go deeper
Put the method to work
The sections
Value, Earn and Redeem each explain their step and give you free tools to apply it.
The Points Challenge
The method applied to real trips every week, scored with these five numbers.
The book
Every step in depth, with worked examples and a 180-day plan to a business-class seat.
The newsletter
The challenge trips, valuation changes and transfer bonuses, once a week.