Yesterday I reported my success in earning 1.2 million Virgin Atlantic miles which I plan to use for a week on Sir Richard Branson’s private Necker Island. In response, a number of readers wanted to know what it cost me to do this. The short answer: it wasn’t easy and it wasn’t free. And, if I were to do it again today, it would be even harder and more expensive.
As I reported in the previous post, most of the miles came from 8 Virgin Atlantic credit card signup bonuses, one Platinum signup bonus, and a couple of Citibank signup bonuses. All of those bonuses required manufacturing spend… a lot of spend… and most required paying first year annual fees. Here are the cost breakdowns:
Annual fees
- 8 Virgin Atlantic cards @ $90 each = $720
- 1 Platinum card = $450
- Total first year annual fees = $1170
Gift card fees
- $638
Reimbursements
- Cash Back Portals: $1,132
- Airline fee credits: $200
- Airline fee credit (expected next year): $200
- Total Reimbursements: $1532
Totals
- Total Fees: $1808
- Total Reimbursements: $1532
- Net Cost: $276
$276 isn’t bad! Of course, I’ll have additional expenses related to getting to the Necker Island since flights aren’t included. But, I’m sure I’ll use miles or points of some sort to do so.
Opportunity cost
While the net cost does not include my time, fuel, or mileage on my car, I’m pretty happy with the final estimate of $276 out of pocket. But what if we look at opportunity cost, instead? In total, I had to manufacture approximately $120,000 (yes, you read that right). If I had manufactured that much with a no-fee 2% card instead, and if the final fees came out about the same, then I would have earned $2,400 – $638 (gift card fees) + $1,132 (portal rebates) = $2,894. Would I exchange $2,894 in profit for $276 and a week on Necker Island? Yeah, maybe. Necker Island looks pretty special and the usual cost for a week is just short of $30,000.
The opportunity cost equation looks much worse, though, when one considers signup bonuses. I could have signed up many other cards instead. Or, I could have used the same points for more valuable vacations. For example, the Membership Rewards points and ThankYou points I earned could have been converted to Singapore miles and redeemed for extreme luxury flights by booking Singapore Suites class. And, the 1.2 million Virgin Atlantic miles could have been converted to 1.8 million Hilton points. In my first post about Necker Island I wrote a bit about what could be done with that many Hilton points: 18 nights (or more) in top tier properties; many weeks in all-inclusive properties; or close to a full year in a category 1 Hilton.
Harder and more expensive today
Two of the key techniques I used for manufacturing $120,000 in spend are no longer available. When I started this pursuit, Target allowed REDbird loads by credit card for no fee. And, high denomination Amex gift cards were available through portals for up to 2.25% cash back. Some of my manufactured spend cost nothing: I simply used my credit card to load REDbird at Target, and then I paid my credit card bill with REDbird. And, some of the spend was better than free. I ordered Amex gift cards through portal at a profit, and then I liquidated those gift cards at Target through REDbird. Even when Target stopped allowing credit cards (but while they still allowed debit cards), I bought Amex gift cards for a profit, then used those gift cards to buy prepaid Visa debit cards, and then I liquidated those through REDbird. Even with the extra step, I still earned a profit doing this.
Today, REDbird is useless, and portal profits from buying Amex gift cards are a thing of the past. And, signing up for multiple Virgin Atlantic cards has become more difficult too. Today, if one were to find a way to sign up for the same number of cards and the same offers that I did, they would most likely have to manufacture spend at a significant cost. Let’s assume that all $120,000 would be manufactured today through Visa credit card purchases at $3.95 per $500 and that they would be liquidated for free through Bluebird or Serve:
- Purchase 240 $500 Visa gift cards, each with a $3.95 fee: $948 in gift card fees
- Total first year annual fees: $1170
- Total reimbursements (Platinum card airline fee reimbursements only): $400
- Net cost: $1,718
Advice: Look elsewhere for best value
I don’t regret the decision to book a week on Necker Island. I love the idea of using miles for a trip that I would otherwise never consider. But, I don’t recommend it to those looking to maximize value. As I discussed briefly above, points and miles earned from credit card signups can go much further. And keep in mind that the cards I signed up for had unusually high minimum spend requirements. Every Virgin Atlantic card required $12,000 in spend, and the Business Platinum card required $20,000 in spend. Most reasonable signup bonuses require $3,000 to $5,000 in spend, and some good ones can be had for much less. My recommendation: you can get much more bang for your buck looking elsewhere.
Want to learn more about miles and points? Subscribe to email updates or check out our podcast on your favorite podcast platform.
[…] 1,200,000 miles for Necker Island: Not easy. Not free. […]
[…] 1,200,000 miles for Necker Island: Not easy. Not free. […]
[…] Another big event in my 4th blogging year was my decision to earn the 1.2 Million Virgin Atlantic miles needed to go to Richard Branson’s private island: Necker Island. I introduced the idea in the post “Considering the 1.2 million mile Necker Island challenge… Who’s with me?” Over the next 7 months I wrote up key milestones, and eventually booked my trip. My wife and I will experience our all expense paid vacation in mid October 2016. See: Necker Island, here we come! and 1,200,000 miles for Necker Island: Not easy. Not free. […]
This is a great redemption and you know it! Better than SQ suites. If Branson is there that week you will get to eat with him and meet his family – it really is a great opportunity.
When you first posted the opportunity a while back, I commented that I thought it was a terrible idea. Those points could be much better utilized elsewhere. Even if you had the ability to rack up 1.2M points quickly, it was mind boggling to me that so many points would be used on one trip that could be converted into several other trips instead. My view has not changed.
However……….
I’m going to make an assumption. As a blogger, I would think part of your motivation to host this site is to inspire others. Yeah, no doubt money is too, but at the end of the day there has to be something less tangible to keep you coming back; this goes for any occupation. So to that end, this whole Necker Island thing, from a standpoint of inspiring readers is a GREAT idea. It really hit me in the face on how conservative I am in this hobby, and it’s time to up my game. Big time. So… mission accomplished. Well done.
I’m not sure why you didn’t assign a value to the opportunity cost of the 9 card signups. As you say, it’s much worse. If you value the signups at $500 each your opportunity cost would increase by $4.5K, so you’re approaching $7500. Throw in time, effort, risk premium, etc. and you probably approach your fair trading value of 1 cpm.
You’ve totally earned this trip with all the time and effort you put in!
About ten years ago I was at Necker Island for a few hours on a video shoot. I also got a little time to also do some snorkeling. Nice place!
Yes I’m sorry to agree that you making a total joke of this hobby is the reason these opportunities close. The total abuse of manufacturing 1000000 miles in one month, and now 1.2 million in 3 months is just ramming it straight in the eye of the banks and airlines. Almost daring them to stop you. The worst part is the reason, just because you can!!
After watching his tv show we nicknamed Sir Richard, crazy rich bastard. When you announced your plan I thought crazy use of points, but somehow appropriate because IMO only a CRB would fork over 30k for a week. I’m impressed you did it so quickly and relatively cheaply.
I am looking forward to your trip report, and wish you sunny days and calm seas.
Didn’t you say on yesterday’s post that you had your wife get a Citi card and another one to transfer points over? Was it prestige or fee free? Was just curious.
Regardless man, I think it’s AWESOME!!!!! You’re going to get to experience a super unique trip that most of the world will NEVER be able to experience!! I say good job!! Hopefully your wife is stoked haha.
I forgot about the target Redbird loads before. That must have helped you a ton. Good stuff!
Thanks! To answer your question, my wife signed up for the no fee Preferrd card and the no first year fee Premier card.
What are you expecting to pay in tips while on the island?
Tips are included.
For 30k a week, they better be included.
This should be an awesome trip! One question i do have is what are you going to do as far as trip insurance? I believe in a previous post you said their cancellation policy is pretty strict and getting your miles back if you cancel is not a sure thing. Given that you are going during the stormy season i’m guessing you’ll buy some sort of policy.
Is there any one travel insurance that is best when a trip’s cost is largely covered by miles/points? If so, what is their reimbursement rate?
I’ve researched this policy and I think only Chase says that they will reimburse points that were used for to pay for the trip and only if those were Chase accumulated points.
Greg, this would be an interesting post: Figure out a way to get insurance for the “value” of the trip rather than your intangible out of pocket cost, so if a hurricane does show up, you can reschedule rather than just cancel.
I guess I could research that, but honestly I would just go without insurance and hope for the best.
So you only killed two deals on your quest? Got it.
I know I’m not being fair and it wasn’t his fault
You could call it three deals:
Redbird
AMEX GC at 2.25% CB
Multiple BoA signups
I appreciate the effort though Greg. Stuff like this is fun for all of us to read, even if it doesn’t make for the best value. You’ll more than make up the costs in extra affiliate income from readers like me.