Just about every other travel blogger out there will tell you never to hold on to your miles because they have a horrible rate of depreciation over time. See: http://milenomics.com/2013/11/time-decay-miles/ and http://thepointsguy.com/2015/07/points-miles-bad-investment/

I’m going to argue a contrary point: you *should* hold on to your miles, even though yes, they do have a horrible rate of depreciation. And by that I mean you absolutely should spend any miles you have for any travel needs you actually have right now, but you shouldn’t go out of your way to frivolously throw them away and dump them on things you weren’t going to use them on or use them excessively lavishly on first class flights you otherwise wouldn’t have booked like many other travel bloggers do. Those extra miles? Keep them for next year.

The reason for this is twofold:

1. Miles don’t depreciate *so* fast that it’s worth wasting them on frivolities just to spend them.

They might decrease say, 10% a year on average, but if you blow 200,000 miles on a first class flight, well – that’s like a 90% loss you just invested in (assuming a generous 10% value gained over an economy seat from that 5-10 hours you spent sitting in a nicer seat getting complimentary alcohol. 20,000 miles, or ~$400, to sit in a nicer seat for 5-10 hours? I don’t know man. 200,000 miles, or ~$4000? Fuck no.)

And 2. Unfortunately, even if miles depreciate, the signup bonuses don’t seem to increase that much year over year. When I started doing this 4-5 years ago, 50,000 bonuses were the standard maximum on a lot of cards…and they still are. In fact, a lot of cards seem to have fallen slightly over time. I had 60,000 United Mileage Plus card bonuses back in the day, and now I only see 50-55,000 offers.

So sure – the value of your miles may depreciate over time, but it’s not like you’re going to be able to get any more in the future to compensate for that depreciation. So 50,000 miles today will take just as much work to get as 50,000 miles tomorrow – and if you blow your 50,000 miles today because you don’t want them to marginally depreciate, then you’re going to have to do the same amount of work in the future to get those miles. And you’ll have to do more work, since you’ll need more miles in the future, but have less ability to get those miles as bonuses won’t increase as fast as depreciations.

So yes – the fact of the reality is you *will* lose value every year if you hold on to your excess miles after you meet your reasonable travel needs. But if you frivolously spend them on excessive things that you really don’t need, you’re going to lose far more value.
(Seriously, consider first class. It’s insane. In what other circumstance would you possibly be willing to pay thousands of dollars more to just sit in a nicer chair or even get a nice semi-bed for a few hours? Do you complain about this when you’re at work 8 hours a day sitting in a standard chair? Would you pay $2000 more to sit in a much nicer chair for one day at work?)