I used to think that buying a business class ticket was crazy. Who does that? Even if you’ve got all the money in the world, why waste a few thousand bucks on a couple of inches of legroom?
Of course, that was all before I flew business class.
I don’t want to say it was a life changer or anything, but it’s pretty sweet.
And it’s not just the extra legroom. It’s being summoned when it’s time to board instead of nervously pacing and queuing at the gate. It’s skipping all the lines. It’s the free food and immediately available WIFI. It’s the showers and the full night’s sleep.
And aside from all of that, it’s fun.
That said, I wasn’t about ready to go crazy and start spending 1000’s of extra dollars on every flight.
I’m a travel warrior! Give me a middle seat on a long haul to Tokyo and I’ll endure leg pain and a subpar movie selection with monk-like discipline.
But it all got me thinking. Certainly somebody thinks it’s worth it.
Is there a level where flying business class goes from a luxury to an investment?
Perhaps. Here’s my thinking. My (somewhat suspect) napkin math says if you earn $277,014.40 annually or more (and this number could be lower or higher depending on how your fuzzy math works!), flying business class could actually be an investment in your time.
Quick disclaimer: what follows is just a type of game I like to play. I’m not advocating this mindset or approach to personal finance.
It’s worth saying that I think personal finance math games like this can be risky if you are just getting started. A classic middle class example is to “invest in a good mattress” because you spend so much time there. Anyone who drops loot on a mattress (or similar) before they pay debts or build small assets is risking their future.
I’d sleep on the floor.
That said, here’s a scenario I went through this week when booking a flight to Spain (which I eventually booked on miles and a little cash with the help of my friends from Abroaders.com).
Long haul flight round trip to Madrid in economy class (never mind the China Southern part :)
Long haul flight round trip to Madrid in business class
Based on all the benefits listed above, I’ll not only work and sleep more, but I’ll avoid some jet lag and hit the ground running in my destination. That’ll save me an estimated (here’s the napkin math part) 7 “productive” hours for each round-trip long haul itinerary booked in business class.
My thinking is that I’d save an additional 3 hours on 25hr+ itineraries like USA -> Asia, although this is all fuzzy math and it varies from person to person of course.
Feel free to plug in your own numbers!
- Productive hours gained from flying full business class itinerary: 7
- Production hours per week: 20
- Productive weeks per year: 48
- Weeks worked per year: 48
- Total productive hours annually: 960
- Cost difference between economy and business class: $1947
- Cost per productive hour gained: (cost difference / 7): $278.14
Result: If you purchase a ticket at this price level with this rationale, you are valuing your time at at least $278.14/hr.
Verdict: if you make the above assumptions, you can fly business class on every flight if you earn over $277,014.40 annually (or if the future asset value of your productive energy can be valued on an annual basis at or over this number).
Is this insane?
Yes, probably. For somebody in a cash crunch or who is just getting started building their empire, it’s crazy to “invest” in a marginal 7 or so hours of productivity before you’ve proven that your time (as currently being spent) is a sound asset.
Ian and I have experienced something that may be something of an analog in our inventory business. Early in our business (2009 timeframe), we’d regularly be out of stock of items because we weren’t sure what the behavior of the asset would be over the long term.
Now that our business is mature, we’ve noticed that the risk of being out of inventory is greater than the risk of extending our cash (but early on cash was the priority).
The same could be true of the business class flyer.
If you are generating enough income with your productive hours, the risk of losing a few (or many!) working days a year could be greater than the cash you spent to get them back.
PS, there are a million ways to skin this cat. What’s your business class threshold? Love any tips and tricks as well :)