Play Mega-Million-Miles and Complete Algebraic Problems

thorthor posited an interesting hypothetical recently on FlyerTalk:

Suppose you won a lottery type thing where they pay you out monthly over your lifetime (or at any rate, over a very long period) and were given the choice:

 

1,000,000 miles a month or:
$20,000 a month

 

where miles = any American based program including TY, MR, UR etc.

 

Which one would you go for?

Several people have responded and the near unanimous decision is to take the cash. It makes sense – what are you going to do with 12 million miles every year? In fact, the only people who say they would take the miles really just seem to want to mess with the IRS.

Imagine the fun of explaining the value to the IRS of the value of the miles as income ~JudyJFLA

Still, it raises the question as to where the tipping point would be that would cause most people to take the miles. Just for fun, let’s think about this another way. If you had the choice between receiving 1 million miles per year or X in cash per year, how low would X have to solve for before you opt for the miles?

For me, the answer would be about $5,000. Below that and the allure of carefree first-class travel to anywhere my wife and I want to go would become too attractive. Above that and I think my logical brain would overwhelm my emotional brain.

What about you? What’s your tipping point?

Read the thread in its entirety: Miles vs. cash: annuity scenario

here’s hoping” by Robert S. Donovan. CC BY 2.0.

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