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Perfect is the Enemy of the Good

Voltaire once coined the phrase loosely translated that “Perfect is the enemy of the good”. In general this terms means that for want of perfection one may never complete a task.  That being said even an imperfect execution may be a preferable outcome to nothing.  The pursuit of perfect is particularly a common road block for all things financial we all need to get over. Typically change is better than stasis, even if it’s not perfect.

For example, recently I came across another blogger’s post on travel hacking. I respect this blogger greatly but I was surprised to see he came to the conclusion that credit card churning was not worth the effort. I read this post with great interest as I’ve always found travel hacking to be one of the best bangs per hour worked of any pursuit. So why did we have differing opinions?

Perfect in Travel Hacking

As I read his post I noted he devoted significant words to pursuing the best usage and earning of travel hacking points. From where to go to get the most value per point to what to spend to get the most points per dollar he mentioned spending days on end maximizing his outcomes. He was right, with the hours he spent travel hacking was a waste of time. The thing is, if you read my travel hacking posts I do almost none of this. I will readily admit I could maximize my points and earning better. If I increased my hours spent I wouldn’t be surprised if I could make at least 20% more in cash back/bonuses. But I don’t.

Maximization is a Time Sync

The thing is travel hacking maximization is a colossal time sink. You can spend thousands of hours maximizing every last bonus to the point that you spend. Meanwhile I spend just 10 hours a year on travel hacking. This gives me about 80% of the benefit of maximization with minimal to no impact on my life. How much benefit is that? Well in 2017 it was approximately $5,000, or the equivalent of 500 dollars an hour. I don’t know about you but I don’t have many income sources paying me 500 dollars an hour which makes it a steal and a strong recommendation. But if I spent 1000 hours on it and it earned me $5800 dollars would I still be a huge fan? No. At $5.80 an hour I could find something better to do with my time

Don’t Waste Time Maximizing

So on the one hand I wouldn’t recommend maximizing travel hacking, or frankly even finances in general. You can tweak your finances and analyze spreadsheets 365 days a year and no doubt you will improve. But it would likely be a waste of dollar per time compared to other pursuits.

Perfect and the Pareto Principle

Statistics illustrates this point very well. In general studies have mathematically shown that 80% of effects come from 20% of the causes. Put differently you can address 20% of the concerns or do 20% of the work and typically achieve 80% of the outcome. This is known as the Pareto Principle. The ramification of this point is you can likely cut out 80% of the work towards perfection, the maximization, and still achieve 80% of the outcome. I try to apply this to many parts of my life.

Travel Hacking and the Pareto Principle, My Spend Implementation

My credit card strategy, for instance, is definitely not maximized. I don’t shift spend to cards based on which category returns the most. On spend I simply shift all my funds to a new card until I get a bonus. I then move on. The card statement warns me of impending annual fees, so when I get a warning I call and cancel the card. I might spend 10 minutes online researching which card to switch too, 10 minutes reading the statement, and 20 minutes calling to cancel. That is it. With some cards returning $500 or more in bonuses, that’s quite a return.

My Travel Hacking Point Usage

On the points usage side I do not maximize either. Instead I long ago determined which categories have an extremely low rate of return and avoid them. These are typically purchasing merchandise with card points and usually cash back. If a card is an exception to these rules, rare but possible, I take note. Otherwise I simply use the points for the remaining categories that tend to have higher returns to capture 80% of the value. I might get 1.2 points per dollar for one option and 1 point per dollar for the other, but in both cases avoiding the .3 per dollar credit card store is enough of a return for my purposes. Simple with no fuss.

My Finances

I do much the same with my finances. I don’t formally budget and I don’t pursue exotic investments to gain a tenth of a percent in return. These would maximize my situation but be a waste of my time. Instead I control my general spending and I actually use index funds. 20% of the work, but again 80% of the outcome.

Start Something, Do Not Wait for Perfect

It’s an important point to not spin your wheels for an extra dollar, or I wouldn’t have spent a whole page on it. But there is another lesson here that is probably even more important. That is don’t forgo doing something because you are afraid you can’t maximize it or how long it will take to do so. The time it takes to do something like daily scrutinizing a budget is not something that should be a barrier to getting your financial life in order. No the single biggest impact is the first few steps where you start to reign in your behavior. Even if you never get to perfect you’ll likely be better off.

Don’t let Perfect stop you from getting your life in order and turning it to the better.

Do you travel hack? Are you susceptible to not starting things because they won’t be perfect?

12 Comments

  1. Mr. Need2Save
    Mr. Need2Save March 12, 2018

    It is amazing how applicable the Pareto Principle is. Sometimes I do catch myself going down the perfection road. As you point out, the infinitesimal gains typically aren’t worth it.

    We’ve done some basic travel hacking, primarily through the Chase Sapphire Reserve card (100,000 signup bonus) and an Amex Hilton card. Throw in our Citi 2% cash back card and Southwest miles and we’ve gotten some really inexpensive vacations.

    • FullTimeFinance
      FullTimeFinance March 13, 2018

      I too catch myself from time to time, I think its probably human nature.

  2. Dreamer in Chief
    Dreamer in Chief March 13, 2018

    I just grabbed my first card for the sole purpose of travel hacking around six months ago, and my wife and I have since added three more. Just those four cards have already nabbed me $4,000 in flight savings with a little less than half my points left. They were all to places we were going to go anyway, and the time spent looking for flights was the same as if I were paying cash.

    I’m just miffed I didn’t dive into this life earlier!

    You’re totally right, you can look to maximize points, but the whole reason for doing travel hacking shouldn’t be to figure out where you can go for as little as possible, it should be to go where you want to go for as little as possible. I’ll be doing lots more of this in the future!

    • FullTimeFinance
      FullTimeFinance March 13, 2018

      Not a bad haul for six months!

  3. Jason
    Jason March 20, 2018

    You make some great points though in terms of choosing where to spend your time. I think about this idea often, especially when it comes to delegation. You can choose to be perfect (or strive for perfection), but in the meantime, you might lose sight of the prize.

    – Jason

    • FullTimeFinance
      FullTimeFinance March 22, 2018

      Time, the most valuable resource in the world.

  4. Dads Dollars Debts
    Dads Dollars Debts April 8, 2018

    I am with you. I do not maximize…but just do. I also use credit cards only for travel. I currently have a south west, alaska air, and chase card all for air travel. I maximize the points and rewards then switch. It seems to work for us though I have never calculated how much I save.

    • FullTimeFinance
      FullTimeFinance April 8, 2018

      Do you churn at all or just pick good cards and go? Next weeks posts will go in depth on credit card churning.

  5. Jim Wang
    Jim Wang April 10, 2018

    So many people don’t pick up the quick easy gains in search of the optimal, I think it’s a bit of that FOMO. “If you’re willing to do the work, why not optimize???” but maximizing takes up too much time and you give up such easy gains while you fiddle around!

    • FullTimeFinance
      FullTimeFinance April 10, 2018

      It is pretty easy to fall into that trap. “If this is so great why don’t I just make it that much better.”

  6. Peerless Money Mentor
    Peerless Money Mentor April 10, 2018

    I don’t try to maximize when it comes to travel hacking or budgeting. My latest travel hack was getting $600 bonus points for hitting my minimum spend on the Southwest card. For budgeting, I just use the power of automation.

    • FullTimeFinance
      FullTimeFinance April 10, 2018

      I love the power of automation, it works fantastic once you’ve established a baseline. Thanks for commenting.

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