Stocks vs. Gold, Habit Stacking, & Sneaky Credit Card Perks 💪

May 23, 2023

Good morning, HTM family!

Ever heard of “habit stacking?”

It’s basically the theory that creating a new habit is easier if you “stack it” on top of an existing one. Like, “for every time I do xxx, I will also do yyy”.

Here are some examples:

  • Each morning when I grab my coffee mug, I will first fill it with water and drink that before my coffee.
  • Every night when I set/check my phone alarm, I will also write a quick text message to my mom telling her one good thing that happened today.
  • As soon as I take my shirt off each night, I’ll do 10 push-ups.
  • Every time I place an order at the coffee shop, I will transfer $5 from my checking to my investing account while waiting for the barista to make my order.

Maybe you can think of a new habit to try stacking this week? Financial or not, every time you add a positive change to your daily routine -—> it makes you a better you. 💪

OK, on to the money stuff! 👇👇👇


TO DO

Trim Your Own Hair 💇

Dumb Jim Carrey GIF - Find & Share on GIPHY

With a little skill (and a lot of confidence) cutting your own hair isn’t terribly difficult. At the very least, sometimes a little trimming can extend the time between getting proper haircuts at the salon.

Sure, those bi-monthly barber shop treks aren’t ruining your ability to retire. But even small savings add up over time. Is it worth checking out some DIY haircut vids and giving it a try?

I dare you 😬


CREDIT CARDS

The Hidden Benefits of Plastic… 💳

Did you know that a few years ago, Mastercard started including cell phone insurance with most of their World and World Elite credit cards? (cards like Freedom FlexBILTVenture X all have this benefit)

Most of them cover up to $600 or $800 per claim (max $1k in a calendar year) for cell phones that are damaged or stolen. Better yet, you can even cover multiple family members’ phones, as long as the monthly cell bill is paid for with that particular card.

As with all benefits, there’s a hefty number of terms/conditions/exclusions that apply. For example, it doesn’t cover “lost” phones that magically disappear. But still, if you have a World or World Elite Mastercard you might already have this benefit without even knowing.

Here are some other lesser-known secondary credit card benefits out there:

  • Extended Warranties: a TON of cards offer a 1-year extended warranty on top of manufacturer warranties. The only catch here is most have a $10k per claim maximum and a max length for the original warranty (usually 3yrs).
  • Delayed Luggage: If your luggage arrives over 6 hours late, you can be reimbursed $100 per day (for up to 5 days) to cover essentials. Most Chase-backed cards (Sapphire cardsSouthwest cardsIHG PremUnited Explorer) have this benefit.
  • Return Protection: Missed a return window? No problem! Your card could cover you for up to 90 days after making a purchase! Chase Sapphire Reserve and many Amex cards have this, including our fav Blue Cash Preferred card! Typically items up to $300-500 are protected, (max $1k each year). Sadly, shipping isn’t included. That’s on you.
  • Shopping Discounts via Web/App Portals: Chase, Amex, Capital One, and BOA all have shopping portals on their websites (many have sections in their mobile app) that offer discounts or additional points for buying things. Many have rotating coupons or “limited time” offers that change regularly, so it’s always worth logging in and seeing if there are additional incentives available before making a big purchase.
  • Deleting Personal Info from the Internet: Discover card customers (with the mobile app) have free privacy protection. Basically, they scan the internet every 90 days and help remove your personal information from “people-search” websites.

All in all, it’s handy to know ALL the benefits you have access to. It could make a difference in which cards you choose to use to pay for specific items or services.

Review your card benefits, peeps! And take an extra minute to dig into the fine print. Not all benefits are created equally so best to double-check everything.

Related stuff:


TOGETHER WITH BETTERMENT

Invest With Tech That Optimizes For You

Volatile markets happen. That’s why Betterment’s automated technology is designed to help you optimize your investing account. Take advantage of dollar-cost averaging with recurring deposits, employ rebalancing to keep your stock-and-bond ratio at its target, and use tools that can help you limit tax impact. Interested? Learn more.

Disclosure: Investing involves risk. Performance not guaranteed


INVESTING

Gold vs. Stocks, Perception vs. Reality

Today’s chart comes from a recent Gallup Survey, showing which asset types Americans *think* are the best long-term investments.

We hope you are just as shocked as us… Because for the first time in 10 years, more people think gold is a better long-term investment than stocks!👇👇👇

Here are the real facts though, using historical data comparing gold vs. S&P 500 performance…

  • Between 1970 and 2022, gold had an average annual return of 7.7% (pretty good actually, all things considered)
  • For the same time frame, the S&P 500 average return was 10.4%

Now you might be thinking, “The difference between 7.7% and 10.4% isn’t that much”… But here are the numbers now in actual dollars…

In 1970, if you bought $100,000 worth of gold, today it would be worth about $4.7 million dollars. (7.7% compounded for 52yrs)

But if you put that $100,000 into the S&P 500, today it would be worth a whopping $17.4 million dollars!

(And if you go back even further than 1970, it gets much worse for gold — that’s right about the time the US dropped the gold standard)

Anyway, there’s a pretty big disconnect between people’s perceptions of long-term investments vs. reality. This a good reminder to be cautious of what people are preaching out there. Perception is usually swayed by recent events or concerns about the near-term future — not actual long-term data.

Related stuff:


ICYMI

Recent News Bites…

HSA Limits ☝️
Last week the IRS released the new HSA contribution limits for 2024. Woohoo! Individuals can stuff $4,150 into their awesome HSA accounts and $8,300 for families! If you’re not familiar with HSAs, check out this post on the triple tax advantage and why they are probs the most efficient retirement vehicle that exists (if you qualify).

Car Culture 🚘
Via Business Insider — “Polls, studies, and surveys show younger generations are less likely to drive, less likely to have a driver’s license, have less access to vehicles, and when they do get behind the wheel, are driving fewer miles!” 🤩 Woohoo! These are all good trends in our book.

Eggflation 🍳
You’ve probably already noticed but egg prices have dropped massively since their peak late last year. Now around $0.78 per dozen (wholesale price) vs. $5.30 less than 6 months ago!

VHS Comeback 📼
Got any old Disney VHS movies laying around? They could be worth some serious money on eBay. Here’s a list of 65 highly desired VHS tapes. Ranging from ~$50-200 (like Pinocchio or Jungle Book) to over $30k (like Top Gun or Star Wars)!!


HOW *YOU* MONEY

Nayi, 27, Boca Raton FL 🏖️

Occupation: VP of two family-owned companies
Salary: $84,000

Paycheck deductions: None, I’m a 1099 contractor
Housing: $2,200 mortgage
Other Debts: credit card, $800/month
Living expenses: ~$500 a month (groceries + occasional dining out)

Leftover savings each month: $1,000 – $1,500

How are you investing your excess savings each month?
I need help with this!

**Editor’s note: We’d love to help!!!… Here are some next steps you might consider…
1) Prioritize paying off that credit card debt first over everything else.
2) Use the IRS tax withholding estimator calc to set aside whatever money is estimated for taxes so there are no surprises when filing time comes.
3) Consider opening up a solo 401k. It’s a great way to reduce taxable income for 1099 contractors.
4) Roth IRA time! The max contribution for 2023 is $6,500 – see if you can max this out if you still have leftover funds after your solo 401k 💪

Biggest “craft beer equivalent” splurge:
Breweries & happy hour drinks

Best savings hack/advice:
I have automatic transfers set for my savings accounts so I don’t have to think about how much to contribute

Biggest money challenge right now?
Saving more money, not overspending on random things

**Have you got a story that might help or inspire others? Fill out the form to be featured! (We won’t share anything you don’t approve first) And thank you in advance for helping our community grow richer and happier, together.


Cheers for reading. Wishing you a great week ahead, stacking habits and doing what you do best!! 👊

Best friends out 🍻

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