Mornin’, money tribe! 🙋♂️
I came across this old Aesop fable recently…
“A kite, flying high, wanted it’s freedom but was bound by string. Suddenly the string broke… and the kite then found out while now free, it could not fly”
This immediately reminded me of reaching financial independence and “retiring early”.
Too often I hear people hating on their jobs, envisioning instant freedom or happiness when they finally reach X amount of dollars in savings. But, shortly after reaching financial independence and quitting their job, they realize the very strings they thought were holding them back, were actually providing structure and purpose in life.
Just something to ponder this week… Refashioning your entire lifestyle overnight is incredibly hard. Instead of waiting for X date, start slowly shifting towards your ideal lifestyle NOW. You probably already have more freedom in life than you think. 💪
Related reads:
📖 First Year of Freedom, by the Mad Fientist
📝 FIRE Confessionals, by Financial Samurai
🎙 Fractured FIRE, HTM Podcast Ep 536
TO DO
Move of the week: Intro a friend! 🤜 🤛
Here is your mission of the week (should you choose to accept it)… Share your favorite money book, blog, podcast, or resource with a friend or family member.
(No, it doesn’t have to be our podcast, although we’d be flattered)… Just anything that helped you have an “ah-ha!” moment with finances… share that with a buddy! You never know, you might just help change their financial life.
Growing rich is more fun *with friends* 👯
SAVING
Sneaky Retail Tactics (and how to avoid them)
Hands up if you spent ZERO dollars on Amazon Prime Day last week!!?? 🙋♂️🙋🙋♀️ Woohoo, me too!
I don’t know about you, but whenever prime day rolls around I get an eerie feeling inside, wondering if I’m gonna get tricked into buying something I don’t need.
Retailers like Amazon are experts at triggering impulse buying. They use sneaky emotional research and build marketing systems to trick people and sell more stuff.
Common sales tactics:
- ❌ Time limits and low stock counts… Signs like “Only 3 left in stock” or “Sale ends in 27 minutes” trigger a fear of missing out and make people buy quicker.
- ❌ Anything with the word “FREE”… Whether it’s “FREE shipping!” or “FREE returns in 30 days”, everyone loves to think they’re getting something for free (even if it’s not really valuable to you)
- ❌ Personalized ads or user trends… Little notes like, “people who bought this, also bought xxxx” it makes you think you probably need xxxx too.
- ❌ Fun music, fragrance, sexy ads… These are all carefully selected to put you in a buying mood
How to avoid these tricks:
- ✅ Log out of Amazon… (and delete your auto-save password). This will make you manually enter your userID and pw each time, adding 1 more annoying step that might just prevent you from impulse buying
- ✅ Browser extensions & apps… Check out pause.fyi and icebox. These extensions detect when you’re about to buy something and force you to wait a specified amount of time. (You can always bypass this, but just the pop up is a good reminder to check if each purchase is necessary)
- ✅ CamelCamelCamel… 🐪🐪🐪 is a free website that shows you price history of individual products (you might find that this “limited time sale” actually happens very frequently!
- ✅ Take advantage of free returns!… If you truly regret a purchase, return it! Most people experience buyers remorse at some point, yet only a small percentage of people actually return stuff and correct their mistake.
- ✅ Get an accountabili-buddy… “Want to skip Black Friday and hang out at the beach with me instead?” YEP!
Not all retailers are evil. But keep in mind they are for-profit companies, and creating sales/discount programs usually makes them more money, not less.
INVESTING
Why do stocks split? 🤷
Last week, Alphabet (Google) did a 20 for 1 stock split.
There’s a bunch of hype when companies do this, but the reality is nothing really changes under the covers when this happens.
What is a stock split? 👉 It’s when a company cuts their shares down into smaller pieces. Kind of like cutting a pizza into 50 really thin slices, instead of the usual 8 fat slices. The size of the whole pizza doesn’t change… just the number of cuts.
Why do they do this? 👉 To lower the buy-in cost and attract smaller retail investors. Going back to the pizza analogy… 8 slices means only 8 people get to eat. But 50 tiny slices allows 50 people to have a nibble and try the pizza.
What actually changed at Google HQ? 👉 Nothing changed in the company itself. Their annual revenue, profitability, market cap, employee count, products, etc. all stayed exactly the same. The only thing that changed is the number of shares (there are 20x more now) and the trading price per share (20x less to buy 1 share).
Should I buy some stock now that the price is lower? 👉 Well, since nothing has actually changed under the covers at Google, there’s no sense in changing your investment strategy or performance outlook. If you own some of Google now (either directly or inside an index fund), your % of ownership stays the same and there’s no change needed on your part.
Stock splits are kind of all smoke and mirrors… there’s nothing to get worked up about — just carry on living your awesome life 😎
ICYMI
Other stuff going on…
Renting 🏠
A new trend is emerging… 20-30 y/o’s are starting to live with 60-70 y/o roommates! The young renters can offer older folks help around the house in exchange for cheaper rent. Sites like Nesterly are helping pair people up, and it’s kind of genius if you ask me.
Vacation 🌴
More than 1/4 of Americans never use their full PTO, forfeiting Billions of dollars in benefits each year! Need a kick in the butt to finally take time off work? Try getting a vacation accountability buddy! (Or just email me your phone number and I’ll call you directly and yell at you. Use your dang PTO!!!)
Auto 🚙
BMW are now offering “micro-subscriptions” to access some of their high-end car features. The Verge reports “a heated seat subscription costs $18 per month”. For now, this is offered only in select countries like UK, Germany, and New Zealand. It’s not clear whether BMW will dare bring this to the US market.
IRS Scams 👀
Each year the IRS publishes a “Dirty Dozen” list of common tax scams that people should watch out for. They hosted a boring webinar last Wednesday that I’m sure you’re all really excited to check out the recording of (not!). Just remember to stay safe out there… And the IRS will never contact you via text, email, social media, and never ask you to pay them in crypto.
Stocks 📈
A new type of *extremely risky* ETF has been launched in the US… These are called “Leveraged Single-Stock ETFs“, which basically hold leveraged (or inverse) positions on a single company stock. They are built for short term trading, not long term buy and hold investors.
Cheap Dates 💑
Check out these 30+ cheap date ideas to save you some cash, and still have fun!
COMMUNITY
Mobile inspection saves the day… 😅
We got a cool email from Vince last week…
“I wanted to say thank you for your episodes on buying a used a car. I decided to try Carvana and it was a great experience. I also used Lemon Squad to get a mobile inspection and that was great too. Unfortunately the inspection showed some engine issues, so ultimately I returned the car and with the way used prices are so close to new prices, I opted for a new car. But I just wanted to say how much I appreciate your show. I recommend it to all my friends. Keep it up!”
Thanks for sharing, Vince! A great reminder that a couple hundred bucks for a mobile inspection can save you THOUSANDS in potential repair issues down the road.
**Have YOU 🫵 got a story or money win to share? Shoot us a note, we’d love to hear what’s going on in your world**
Cheers for reading! Have a great week y’all!
Best friends out 🍻
*****
* Advertiser Disclosure: How to Money has partnered with CardRatings for our coverage of credit card products. How to Money and CardRatings may receive a commission from card issuers.
* User Generated Content Disclosure: Responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.
