Are any United flyers springing for a lifetime lounge membership?

Continental has sold lifetime Presidents Club memberships for a long time now, with prices ranging from $4,600 (for Platinum members) to $5,900 (for general members). United hasn’t sold lifetime memberships since I’ve been flying with them, though now that United and Continental are matching status in each others programs, United 1Ks can buy lifetime “United Club” memberships for $4,600.

I’m pretty torn as to whether this is a good deal or not. On one hand the thought of paying $4,600 now to ensure I have access to cereal and snack mix at airports for the rest of my life is absurd. On the other hand, I’m young and could get a lot of use out of a membership, and as a frequent flyer, lounge access is a must if for nothing other than a quiet place to work. Right now I’m still able to get access to Red Carpet Clubs through Gold status with Star Alliance partner airlines, though who knows for how much longer that will be practical. Not factoring in time value of money, and assuming I could get 50 years of use out of this, that’s less than $100/year. But those are two huge asterisks. While I think I’ll be flying United for the next 50 years, that could change any moment. Besides, eventually I’ve gotta get tired of flying, right?

In the end I probably won’t do it, though I am ever-so-slightly tempted.

So, is anyone else going to spring for it? Or at least a little bit tempted?

Comments

  1. Well, I say do it. You still see AA memebrs on FlyerTalk talking about how they’re still enjoying their lifetime lounge memberships that they bought for pennies in the 1970s.

    As @Matt says, though, I’m sure people who bought lifetime memberships to PanAm or TWA lounges aren’t all that happy with their decision.

    With inflation, though, this is a heck of a deal. I’d imagine in 20 years, let alone 50, lounge membership is going to run in the thousands of dollars.

  2. Spending $4600 on a lifetime membership with so many unknowns is absurd. Here’s a much better idea: invest the money and use the interest (around $300) to subsidize your annual lounge membership!

  3. Don’t forget, 20 points for Mileathon for renewing a PC membership……

    that just might tip the balance! 🙂

  4. @Ben

    Well did you consider pulling the trigger on lifetime Fairmont Platinum?

    I’m 23, and I was extremely tempted to do it (I even had a buying group lined up to drop the price to $1500) but ended up opting against it since $1500 is still a good chunk of change and I was worried about them watering down the program in the future.

    I also didn’t want to subconsciously structure my vacations around trying to visit locations that have a Fairmont rather than locations that I truly wanted to go.

  5. There used to be a lifetime RCC membership option, it was limited but there. so, I think that UA probably has a bunch of legacy elites with lifetime RCC status. For this money, I don’t think it is worth it at all, unless a spouse card is included

  6. Better to invest the money and pay for the club.

    At 5% money doubles at just under 15 years. So $4600 goes to $9800 in 15 years, to $19,600 in 30 and $39,200 in 45. At 60 years your investment is worth over $78,000 (in today’s dollars).

    If you don’t believe 5% after inflation is achievable then just adjust the return rate to whatever you think is realistic.

    Take a look at a Vanguard Tax Managed Account. Very low fees and almost no taxes along the way.

  7. @mike: Where casn I get $300 interest on $4600? Sign me up.

    @sbe: Where can I get 5% interest on $4600? Sign me up.

    ROTFL.

  8. @sbe — The $78,000 is NOT in today’s dollars, it is 2071 dollars. Furthermore, using a return of 5%, the actual amount in 60 years is $85,900.

    Let’s assume Ben lives 60 years and that the membership price increases 3% per year. Let’s then assume that Ben takes the money that he isn’t spending on the annual membership fee and deposits it into an account that earns 5% per year. At the end of 60 years, that account will have accumulated to $254,000.

    Even so, I wouldn’t buy it because UA could go under, UA could match DL by giving free access to top status flyers, you may have access through *G, you may have access via a credit card, your employer may pay for your access, you may stop traveling, you may finally become EXP ;-), etc.

  9. I don’t trust United enough to fork over $5000 now for benefits in the ‘future’.

    Could prove out to be wrong, of course, but my bias is against fronting cash on the ‘promise’ that a company this give me something ‘later’.

  10. Did not think too much about it, but will not purchase lifetime membership. As others have suggested, we don’t know what will happen to UA in the future. While I am committed to UA until I get MM, if benefits are really bad, I’ll reconsider who I use to get around the world..

  11. “Investments” where the investment takes more than ten years to finance itself are almost always a bad deal.

    With the flying you are doing you could hit the 2MM mark within a few years and that gives you this benefit for free. So the question is: will you hit the 2MM mark before you start enjoying this purchase. I think you will.

  12. Given the Bernanke buck syndrome of a tripled monetary supply and near zero interest rates that has been placed upon America, one would be fortunate to get one-half of one percent interest rates now or a maximum of 2 percent for a 3- 5 year CD. If you think you will make use of it, a lifetime CO Pres club membership might be a good place to place your money.

  13. JUST KEEP IT AT “at least a little bit tempted”– KEEP YOUR HAND OUT OF UR POCKET — MY BET — UNITED WILL NOT BE AROUND IN 10-20 YEARS AND 50 FORGET IT — I TRAVELED MANY MANY — NY -FAR EAST AND NY -EUROPE THOUGHT IT WOULD GO NO FOR EVER –“WRONG ” MAN PLANS GOD LAUGHS — YOUR A SMART GUY –U WILL FIND A WAY TO USE THE LOUNGES SOMEHOW

  14. @MRE: No kidding. I too would like some investments that pay 5-10% interest, seemingly risk-free as our colleagues assume. Are they reading this stuff out of the textbooks published in 2002?

  15. @chitownflyer :rolleyes:

    So what if the most you can get out of a CD is 2% if inflation is zero? Is that materially different than when inflation was 3% and 2 year CDs were at 5%? Real rates of return on CDs have been the same for the past 30 years; basically you earn, even in the best of years, only a slightly positive real rate of return.

    I don’t get why everyone is getting their ten minute hate on Bernanke. Moderate inflation = good. Current levels of inflation = nearly zero (bad). Method to get from zero inflation to moderate inflation -> increase money supply. This is Macro Econ 101 (like the first week of class); is no one familiar with P=MV? Right now V is in the toilet; one surefire way to get it back up is the threat of (moderate) inflation. And anyway, it’s easy for the Fed to tighten the money supply in the future if we’re lucky enough that inflation looks like it *might* head back to 3% (as an empirical matter it turns out that economic growth isn’t much affected by inflation until you reach levels greater than 10% anyway, so lots of room for leeway).

    To relate this back to Lucky’s dilemma, if inflation stayed at near zero indefinitely, then there’d be no incentive to make a RCC lifetime purchase now rather than defer RCC purchases to some future period. But (expected) inflation encourages RCC lifetime purchase now which increases the velocity of money, which increases aggregate GDP.

  16. Also…guys…if you want 5% ROI, it’s by no means out of the picture. Just go onto Vanguard and put your money into Index Funds. Get an IRA, and play it safe. Even if various stocks go down, the market as a whole goes up. 5% is nothing–my 3000$ that I put into an International Index Fund is now over 4000$. When I retire in 45 years it’ll be worth a lot more to me than the Continental Club membership.

    Sorry that sounded kinda braggy and that wasn’t the point. The point was, stop saying that 5% is some impossible dream when you’re all capable of logging onto Vanguard and earning a lot more at a minimal risk

  17. I totally forgot United offers a lifetime RCC membership at 2MM. Let’s see if that benefit sticks around, but for now, that alone is enough reason not to buy a lifetime membership. I’m almost half way there!

  18. Point of reference….

    NW sold lifetime World Club (now DL Sky Club) memberships in Nov of 2008 for $2800. DL no longer offers the LT membership at any price.

  19. hobo, who claimed 10% other than you? Nobody.

    If people take the time to give a considered response you should at least do likewise.

    I didn’t say 5% interest I said 5% return. There are plenty of places to get that for long term investments and that was the appropriate comparison given he was amortizing the club membership over an equivalent time period.

  20. Wow, Ben, you should also start an investment blog. You could tap a pile of so-called experts on here for input.

  21. hobo, you certainly have an attitude. But snide is not a substitute for considered thought and useful input.

    The question at hand is whether or not to buy a lifetime membership in the club. Myself and others have noted that it is probably is better to invest the money. To support that position I posted the return on the amount of the club fee over the expected lifetime of the use (as indicated by Lucky). The 5% number is historically a good estimate of what one could expect. If you do a bit of research you can verify this but as I also noted one could use any rate of return one desired and get a range of answers from conservative to aggressive.

    I fail to see how such an answer was anything but the proper method of coming up with the data needed to make an informed decision as to which way to go. Obviously you think otherwise so perhaps you’d care to suggest an alternate approach.

    Your first post misquoted the assumed interest rate in order to disparage the analysis and then you compound matters by insulting us (me?) by calling us “so-called experts” when in fact you don’t know a thing about us. Perhaps we are investment experts but that isn’t really the point. What matter is whether or not the process was valid and you haven’t said a thing to suggest it was not.

    Lucky asked a question and I attempted to help. If you disagree with my post that’s fine. But it would be more helpful if you didn’t use false assumptions as a basis for disproving it. That isn’t going to get us to a good answer.

    Which after all is the point. Isn’t it?

  22. I think the decision matrix is different for each person. Also, it depends greatly on one’s circumstances. So no single answer applies to everyone.

    Here is an alternative approach to figuring whether this is sensible:

    – Assume typical US family of 2 adults + 2 children
    (Please pretend that’s typical for discussion; obviously,
    substitute actual numbers for one’s own situation 🙂

    – Assume 1 adult is a UA MM, so has Lifetime *G.
    This gives him/her lifetime lounge access on Intl travel + 1 guest.
    Note this does NOT give the UA MM’s entire family access !

    – Assume other adult is not a FF,
    so does not get any free lounge access.
    (or if they are FF with free lounge access adjust the equations
    below accordingly, depending on # of guests allowed)

    – Typical entry price per person per visit is $35-$50 for a *G lounge.
    Prices go up every year, but to keep things simple just
    use a fixed $50/entry for this example.

    Assume LT Club access for the other adult costs $ 5000
    (this is a fictional number to keep the math simple;
    obviously substitute the real number).

    ($5000 / $50 person-entry) = 100 club entries.

    Now figure out “how many times family of 4 would travel and
    want lounge access”. Add that to “how many times other adult
    travels alone and wants access”. Compare the sum to the
    100 club entries.

    Now, factor in the “domestic tranquility” factor of letting one’s
    spouse have lounge access in their own name and when
    they travel without oneself.

    There are 2 points to make here:

    1) Different people will have different starting assumptions,
    and different values for “how many times useful”,
    so different people will be above or below the 100
    break-even point.

    2) Sometimes the sensible person to buy the LT lounge pass
    for is not actually the Frequent Flyer, but instead their
    spouse.

    Cheers !

  23. Gene,

    My apologies I didn’t see your post until just now.

    You’re correct of course about the money NOT being in today’s dollars and it would be better if the calculation were presented that way because people think in terms of the buying power they know.

    As for the $78k vs $85k you computed I’m sure your number is more accurate. I was giving an estimate to illustrate how money compounds not an exact calculation for the precise number for a 5% return (on the theory the 5% was assumed to start with).

    I’m having trouble following what you said after that but I think we agree all things considered (risks the membership will be worthless, chances he can get in another way etc.) it sounds like a less than compelling deal.

  24. @ Andy, the reason to vent against Uncle Ben Bernanke is because he is devaluing the purchasing power of the US dollar! QE1, QE2, and all of the money printing have tripled the monetary supply, whether physical or digital. The US dollar is at record lows versus the Canadian dollar, the Australian dollar, and the Swiss Franc.

    The legendary investor Jim Rogers states massively increasing the money supply creates one thing: rising prices, this is called inflation. This is why commodity prices are at an all time high: take a look at gold, copper, cotton, sugar, and oil, but the Fed rigs the inflation numbers by excluding food and energy from its calculations. Just take a look at the price of food at the grocery store, and the cost of gas when you fill up your tank. Instead of investing their money in America, they place their funds in foreign nations for returns on their money. I long for the days of a Paul Volcker to raise interest rates. At least the ECB is mandated by law to ensure price stability and dos not intentionally debase its currency.

    Back to the subject, a lifetime CO President’s club membership may be a good value seeing that you can not earn any interest in short term funds at the bank.

  25. Comparing a long term investment (President’s Club) against a short term one is not a fair comparison (regardless if short term interest rates are low or high at the time in question). The time horizons of the two investments should be equivalent.

  26. I got a lifetime Red Carpet Club membership the year United stopped selling them. I think it cost $2,400 at the time. At that time the return on investment was 8 years. I was nervous the year United declared bankruptcy since i still had a year before break even (in theory they could have walked away from the lifetime memberships). But it all worked out and I enjoy not only the access, and occasionally the free 2 hour conference room benefit that was part of the lifetime membership when I got it. Turned out to be a great decision. Now if I had only gotten the unlimited PassPlus when they offered it….

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