All the stuff we didn’t buy.

How to save a ton on Amazon without falling into the online consumption spiral.

By Brad Beckstrom

Is Amazon getting too good? We’ve been happy with Amazon Prime, especially the perks of membership like two day delivery, unlimited movies and music, even unlimited photo storage. If you’re going to pay for Amazon Prime membership, make sure you take advantage of all the included services.

Unfortunately, over time we’ve started to see Amazon creep up as a higher percentage of our spending, showing up more frequently on our credit card bills. Usually just as a single line without much information about what we purchased or which Amazon service we purchased it from.

Example
3/20 Amazon.com AMZN.COM/BILL WA 44.27

We use Amazon to price check most purchases, especially any household staples that we have dropped off at our doorstep using Amazon Prime. I usually compare against Costco prices I’ve saved in Evernote or on Google Shopper so we’re not only getting better price on many items, I get to stay out of stores that give me hives. Staying out of stores is a good way to avoid impulse purchases. This was always a problem for my wife at Target, or myself at the hardware store. We’ve dialed back on impulse purchases over the years.

The issue now with Amazon is that they’re making things too easy. They just started offering same-day delivery in our area on many items. They’ve gotten good at making recommendations based on our purchase history. I find myself jumping on the site to do a quick price check, or reordering a case of paper towels etc., and seeing something I remembered we could use.

Stop

There are a lot of these lately. At first Amazon was great, we could quickly reorder household items and simultaneously check the price, online. Amazon would also save all of our purchases so we could go back and remember what kind of furnace filters we used. For example, furnace filters should be replaced every three months. Years ago I remember actually running to the Home Depot and buying three overpriced furnace filters whenever I needed to. By doing some research and ordering a case of these filters on Amazon, I save about 30 to 40% and can switch brands depending on what’s the best deal. I also saved myself a trip to Home Depot. How much is an hour of time worth? Think about that on your way to and from a store for a single item, make sure you include, time to park, gas wasted, time searching for the item, and standing in line to purchase it.

It’s better on Amazon or is it? Read more…

Welcome to My Demise.

Some simple steps you can take to put your affairs in order, well before they need to be.

By Brad Beckstrom

It’s An Emergency.

Sounds like the title of every email I get asking for political contributions. No donations requested here. I’m talking about a real emergency, you just kicked the bucket, vanished in the Amazon, or no longer have a solid grasp on your first name.

Welcome to my eventual demise.

Don’t feel bad, it’s something that none of us get to avoid. We all know someone that left us too soon or someone still going strong in their 90s. We don’t get to choose. If you’re old enough maybe you’ve had to deal with the estate of a relative or family member in a nursing home.

However, something has changed. When my mom passed, most of her financial information could fit in a single file folder. Things have gotten a bit more complicated thanks to the cloud, online banking, investing, social media, smartphones.

“ Where did Brad stash those bitcoins? They must be around here somewhere.”

I can imagine just dealing with passwords for all these accounts, devices, would be a bit of a nightmare for anyone. I’ve been using a program called 1Password for about five years. There are about 1000 passwords and secure notes in the app. And where do I keep the password to the password manager?  Well, I finally got around to setting up a family trust and organizing all this stuff.

Nobody enjoys writing about their own demise. Once I started working through it, I realized this was a pretty efficient way to organize your finances, imagining someone else having to figure it all out. What could I do to make this easier for them? I decided this would be a positive thing and started drafting a welcome letter, well, a “welcome to my demise” letter.

It’s not just those final moments of your life you need to think about. Many of us are living longer but those last several years can be pretty rough. You need to think about what would happen if your communication or your memory became very limited. I did this a bit backwards. About a year ago, we put together a revocable trust and will and now I’m just getting around to a welcome letter, that includes all the important details that may not be included, including where to find a copy. Read more…

Beat Last Year.

How hacking away at the unessential reveals the path to financial independence.

By Brad Beckstrom

I thought I’d always been good with money, but in 2008, things were starting to hit the shitter. Stock market declines were on their way to a 40% drop. Real estate was headed in the same direction. I was running a small business and weaving my way through the craziness.

Just like I learned in 2000, there’s not much you can do about paper losses. In fact, the more investment moves you make during a correction or bear market, the more damage you can do. It’s far better to be prepared and have a strategy, before a bear market, helping you avoid bad decisions.

Why am I talking about 2000 and 2008 in 2018? Well, we know that recessions and bear markets come along with some regularity. Now is the best time to make sure you’re prepared for the next market decline. The good news is there are only a few very important steps in this process.

  1. Track every dollar that comes into and goes out of your life.
  2. Give yourself a pay cut and invest the difference every month.
  3. Build up a 1 year emergency fund that allows you to ride out the storm, and avoid selling off investments. 

I was fortunate enough to stumble across the book Your Money or Your Life around 1993. After reading it a couple times, I had a deep understanding of the importance of tracking my expenses and investments with the end goal of financial independence. A few years later, I upgraded my computer and received a demo copy of Quicken. The difference between Quicken and some other home budgeting applications at the time was the availability of downloads from both my bank and my brokerage. This was a game changer for me. I’d been far too lazy to enter transactions in the past and absolutely hated reconciling my checking account. Read more…

Life in Spendy Town: Can Living in an Expensive City Sabotage your Dreams of Financial Independence?

By Brad Beckstrom

Who knew?  That’s what I keep telling myself. When I was in my 20s, I drew a circle around the Washington DC Metro area including Northern Virginia, Baltimore, the Eastern Shore, and surrounding areas. I said, “This is where I will live. This will be my zone of influence.” (I actually said that. Not sure why, maybe it was business related, or I was reading some Dale Carnegie books at the time). Little did I know that red circle I drew encompassed 4 of the 5 richest counties in the United States and 6 of the top 10.  Literally, all within a one hour radius of Washington, DC. This area really does make San Francisco and Silicon Valley look like chump change.  LA, New York, Honolulu, forget about it. Washington, DC is where (a lot) of the money is. Not convinced? Just take a look at the U.S. Congress and the money machine that supports it.  

There are some advantages to living in a wealthy part of the country:  jobs, great schools, museums, sports franchises, bays, lakes, rivers, beaches, mountains all nearby. So, it’s a great area to live right? Unfortunately, a lot of people feel that way. So, not only are we beating LA and New York in spendyness, we also regularly beat them with some of the worst traffic in the country. Real estate is equally ridiculous, along with property taxes. High-paying jobs and expensive real estate spillover into everything. Most restaurants are fancier and more expensive. Real dive bars and affordable local spots are getting harder to find, often being priced out of their locations even in the close in suburbs. Everybody, grocery stores, retailers, parking garages, jacks up their prices because they can (or need to.) Good deals become harder to find.

When I start comparing Arlington, Virginia to cities like Raleigh, North Carolina, Tampa, Florida or Boulder, Colorado using online calculators (links below), I start to see a trend. Housing is really driving the majority of cost-of-living differences on these these calculators. I’ve tried to use other online comparison calculators (see list) but once they add housing, it throws everything off. For instance, it might say something like a $100,000 salary in DC is worth $170,000 in Raleigh, but this has very little to do with the price of milk or taxes and everything to do with the fact that house in the DC area will cost you 3X.  

Arlington, VA. vs. Raleigh NC. From CNN Money, Cost-of-living calculator.

Real Estate Read more…

Seven Simple Money Habits I Used to Achieve Financial Independence.

By Brad Beckstrom

When I started saving in my mid-20s I was not aware of the term “financial independence.” I was, however, very aware of the wordfreedom.” I was never good at following orders. I likely would have struggled in the military or working for anyone who wanted things done a specific way.  On the other hand, left to my own devices, I was very interested in making my own plans and setting personal goals. Secretly I was a bit of a self-improvement junkie. When I got my first real job out of college, I signed up for every class offered by my employer’s training department. Time management, presentation skills, Brewing 101. Well, I worked for a brewery.  It seemed I was a much better student after college, devouring course materials and finding great books on my own.

Simple Money Habit #1

So, in a nutshell, that’s the first simple money habit: Lifelong learning. I’ve always put that first because regardless of how much money you’re able to save, the most important investment you can make is in your own development is you. Kevin Kelly, founder of Wired Magazine, once said “just read one book a month and it will change your life.” He’s right.

Simple Money Habit #2

Lifelong learning goes beyond reading and classes, it’s really also about asking questions. When I was calling on clients at my first real job, I was asking questions about their business, franchising ideas, what worked for them. Simple Money Habit #2: Ask Questions. This started early for me, even asking my grandmother if I could see her stock certificates or figure out how her calculator worked.  Now I can get a lot of answers on Google, but the ones that are the most helpful come directly from people with experience. Read more…

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