The California Muni Bus system recently raised their one way fare from $1.5 to $2, as they desperately try to pay for another mismanaged government agency. When the fare was $1.5, sometimes you had to just eat the 50 cents change you were owed because you only had two dollar bills. Fine, your fault, no big deal. But is this the right type of thinking for those who are really looking to save money? After all, $2 is 33% more than $1.5. Would you be ok with paying $200 for that jacket if it was only $150, because the store has no change? Heck no. Government transportation systems around the world rely on this type of consumer laziness to pad their profits and make more than they normally would. Retailers who sell gift cards, either count on the consumer to lose the gift card, forget they even have it, or let the usage date expire to reaping in millions of dollars each year.
As I was on my way way home from work this afternoon, a woman told the bus driver after he started moving that she didn’t have correct change and only had a $20! He muttered something under his breath and told her to go ask fellow passengers. Come on lady, how many of us bus riders are going to have one $10, one $5, and five $1s for your $20? We take the bus! Change for $5 bucks ok, but $20? So sorry. In the end, none of the 20+ passengers had any change, and she sheepishly put the $20 bucks through the feeder!
If we’re taking the bus in the first place, we’re generally more frugal than the average person, so why would we be so lazy as to not give correct change? The answer probably has to do with convenience. Convenience is definitely valuable, no doubt. However, I want to challenge the RB30RB40 readers on this type of thinking, because collectively, over our life times, not giving the correct change ads up. Laziness is what results in late charges, and over draft fees and robs us of our financial freedom. So much about personal finance is about making conscience decisions that allow us to prosper going forward.
When the lady got off the bus, the bus driver yelled, “Correct change appreciated as always unless you got a $20! Hold on!”
Wealth Building Recommendation
Manage Your Finances In One Place: One of the best way to become financially independent and protect yourself is to get a handle on your finances by signing up with Personal Capital. They are a free online platform which aggregates all your financial accounts in one place so you can see where you can optimize your money. Before Personal Capital, I had to log into eight different systems to track 25+ difference accounts (brokerage, multiple banks, 401K, etc) to manage my finances on an Excel spreadsheet. Now, I can just log into Personal Capital to see how all my accounts are doing, including my net worth. I can also see how much I’m spending and saving every month through their cash flow tool.
A great feature is their Portfolio Fee Analyzer, which runs your investment portfolio(s) through its software in a click of a button to see what you are paying. I found out I was paying $1,700 a year in portfolio fees I had no idea I was hemorrhaging! There is no better financial tool online that has helped me more to achieve financial freedom. It only takes a minute to sign up.
Finally, they recently launched their amazing Retirement Planning Calculator that pulls in your real data and runs a Monte Carlo simulation to give you deep insights into your financial future. Personal Capital is free, and less than one minute to sign up. It’s one of the most valuable tools I’ve found to help achieve financial freedom.
Refinance Student Loans With SoFi: SoFi is a fantastic social lending company that provides rates as low as 1.9% variable with auto pay and 3.5% fixed with auto pay. The reason why they can offer lower rates than the rest is because they analyze you based on merit, quality of employment, and education besides just a credit score and financials. There is zero origination and prepayment fees. Offer terms are from 5, 10, 15, 20 years in both fixed and variable. Both private and public student loans can be refinanced.
Besides low rates, one of their best features is their unemployment benefits. If you lose your job while repaying your loans, you don’t have to pay your loan for up to 12 months while you look for a new job! Interest will still accrue, but having this cash flow break is a huge benefit. They also provide job assistance guidance as well. You can apply to refinance or apply for a new student loan here.
About the Author: Sam began investing his own money ever since he first opened a Charles Schwab brokerage account online in 1995. Sam loved investing so much that he decided to make a career out of investing by spending the next 13 years after college on Wall Street. During this time, Sam received his MBA from UC Berkeley with a focus on finance and real estate. He also became Series 7 and Series 63 registered. In 2012, Sam was able to retire at the age of 35 largely due to his investments that now generate over six figures a year in passive income. Sam now spends his time playing tennis, spending time with family, and writing online to help others achieve financial freedom.
In 2017, MUNI still sucks ass!