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Negotiate Better Deals With BATNA: A Winning Uber Transaction

Updated: 01/14/2021 by Financial Samurai 65 Comments

Negotiating using the BATNA technique is huge for saving you money or making you more money.

Last year, after playing an afternoon tennis match at my club, I decided to switch on my Uber driver app to try and catch a fare heading home. Making money by going in a direction I planned to go anyway feels great if it works. This was before Uber came out with their new tool to allow for direction-based rides based on a pre-inputted destination address.

My tennis club is in the middle of the city, so I knew my chances were less than 30% to head back west since 70% of the population of SF lives on the eastern half. I’m a gambling man and this time I lost. I picked up a mother daughter couple close to my club who were headed northeast to their hotel at Fisherman’s Wharf. Oh well, at least I’d make about $15 and perhaps catch some surge fares down there heading back west.

The daughter told me she just started attending Cal Berkeley, my business school alma mater, so we got into an engaging discussion on the importance of figuring out how to leverage the internet to make a a better living if she learned only one thing in college. She agreed. 



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What’s It Like Driving For Uber? Mixed Emotions Of Hope And Sadness

Updated: 01/14/2021 by Financial Samurai 91 Comments

Joining Uber As A Driver With $50 Gas Promo
Rhino getting lured in to join Uber

Today, driving for Uber sucks. The pay is too low and the customers are not great. With the global pandemic, business is down a lot. This post highlights what it was like driving for Uber back in 2016, when it was all the side-hustle range.

I never planned to drive for Uber. It just happened. When I pulled up to a gas station to fill up Rhino, my 2015 Honda Fit, there was a fella setting up a tent that promoted a free $50 gas card if I signed up to become a driver.

“No obligation to drive!” he tempted me, so I figured why not. With gas prices rebounding from their lows, what used to cost me only about $26 to fill up now cost $35. Moose, my old 2000 Land Rover Discover II sucked down $80 – $100 a tank, so in comparison $35 isn’t so bad.

After uploading my driver’s license, registration, and inspection form, I waited to get a confirmation via text or e-mail. Twenty-four hours later and nothing. I went back to the nearby gas station the next day and asked what was up? He said he didn’t know, and that I should e-mail support. So I did. He gave me another $50 gas card for my troubles. And then another $50 gas card for referring my friend in my passenger seat. YES! Who doesn’t love free money baby?!

Several days later, I finally heard back from Uber via e-mail, and they said they had wrongly entered my information. But if I simply logged in and re-uploaded everything again, all would be fine. When I logged into my account via my laptop it said, “Get a $100 bonus if you go down to the driver center at 130 Vermont Street to get everything set up.” So instead of re-uploading everything myself with no guarantees, I just went down to the driving center given I planned to be close by anyway.

After about 10 minutes of paperwork, the inspector said I was good to go. “All you’ve got to do is download the Uber partner app, take a selfie, and Go Online! After your 10th ride, you’ll get a $100 bonus for coming down to the driving center, and another $300 bonus after your 20th ride for signing up via our gas station promotion.“

Wow! $400 worth of bonuses plus another $150 in gas cards. So that’s where Uber is spending all their billions raised. The offer was too tempting to not try things out. Now let me share with you my first Uber passenger experience, some earnings figures, and the emotions I experienced over the next couple of weeks driving. 



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The Time I Almost Bought A Bentley: The Crazy Ways We Justify Our Spending

Updated: 08/19/2021 by Financial Samurai 83 Comments

Range Rover Sport Supercharged 2017

I almost bought a Bentley Continental. Let me share how I almost wasted six figures on a car I didn’t need.

After going down to City Hall to get my reconveyance letter (proof of ownership) for a property I paid off in 2015, I decided to pop into the Range Rover dealer several blocks away for fun.

The Range Rover Sport is currently #1 on my list of mid-life crisis cars to buy. It looks good. Performs well in the snow. Feels luxurious. Sits up high and is probably safer than my Honda Fit in an accident.

My only hesitation is that it costs about $95,000 out the door for a Supercharged version with 21″ rims like in the picture above. That’s a crap load of money for a machine that takes you from point A to point B just as well as a $10,000 vehicle. So I kept looking to see if there were cheaper options. 



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Why I’m No Longer Willing To Drive For Uber

Updated: 01/04/2022 by Financial Samurai 78 Comments

Surging Everywhere But Where I Am Uber

Over a two-year period, I gave over 500 rides driving for Uber. It was an eye-opening experience that helped me also build up my Solo 401(k) balance. Let me share why I’m no longer willing to drive for Uber.

In part one of this two part series, we discussed seven reasons why everybody should work a minimum wage job at least twice in their lives – once during school, and again after they’ve made a comfortable sum of money.

The reasons cited are:
* Develop a stronger work ethic
* Develop better social skills
* Be a kinder, more empathetic person
* Get out of a bubble
* Make extra money and become a more disciplined spender
* Become more business savvy and entrepreneurial
* Get accustomed to life not being fair

After seven months since first testing out the platform, I’ve decided to no longer drive for Uber except to occasionally pick up someone along the way. The 10% – 20% fare cuts in January 2016 have made driving not worth it beyond the initial sign up bonus period (e.g. $300 after 20 rides in SF).

I’ve learned everything there is to know about the existing technology and I’ve already benefitted from all the additional non-monetary benefits I’ll be highlighting in this post. 



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How To Not Get Pulled Over For A Traffic Ticket: Race And Sex Matter!

Updated: 11/12/2018 by Financial Samurai 89 Comments

Never get a traffic ticket, rolls royceWhen I got my speeding ticket for going 35 mph in a 25 mph zone, all my friends laughed and jibed.

“Are you sure Moose can even go 35 mph in two blocks?” (Moose was a slow, 14 year old Land Rover Discovery)

“How the hell can you speed during rush hour traffic at 6:45pm? It’s bumper to bumper then!” (SF traffic is horrendous thanks to robust employment compared to five years ago)

“Dude, you’re a victim of racial profiling. Out of all the cars out there, they chose your piece of shit? Don’t they have something better to do?”

I laughed at all three responses, but then I was asked again, “What color were the police officers?”

“They were both White,” I responded.

“Ah hah! Proof right there. You were targeted!” responded my Hispanic friend.

“Come on, that’s just a coincidence,” I replied, even though I was miffed at getting pulled over when everybody was going the same speed during rush hour.

“Never forget Rodney King, Don Sterling, Trayvon Martin, Eric Garner and the town of Ferguson!” shouted my friend with one fist raised up high!

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Fix The Car Or Buy A New One?

Updated: 08/13/2021 by Financial Samurai 83 Comments

Are you wondering whether to fix the car or buy a new one? Used car prices are up huge post pandemic. Therefore, new cars may be of better value. That said, buying any type of car that costs more than 1/10th your annual gross income is a waste of money in my opinion.

This month is turning out to be an expensive one.  Originally, I was planning on joining the no-spend November movement given I’ll be spending more than normal during the holidays.  I’ve been tempted to buy a new or new used car for the past year since Moose is 11 years old and needs some work done.  It was basically sell Moose now and avoid the extra expenditure, or buy a new new/used car in great condition.

After much deliberation, I decided to keep Moose and do some work. After 4 years, his brakes finally needed replacing. My auto-mechanic of 10 years recommended I change both rotors and pads in the front since Moose is heavy up top, and just change the pads in the rear.  

I followed his directions for a total cost of $705 ($400 parts, $300 labor).  $705 after tax is pretty darn good, especially after 4 years.  I’ve also heard folks spend $1,200-$1,500 on brakes before.  Expensivo!

When I went to pick Moose up, he wouldn’t start!  It turns out the battery only had a couple months left to live after 5 years. I’m glad Moose didn’t start at the shop, rather than somewhere in the snowy Sierra Nevadas this winter!  That would have been such a disaster. I spent another $90 for the new battery for now a total cost of $795.  Tick, tick, tick, things are getting up there.

DECIDING ON WHETHER TO FIX OR BUY A NEW CAR

The reason why I spent months deliberating on whether to fix Moose or buy a new car is because Moose only has a Bluebook value of around $4,000.  Therefore, a $800 fix equates to 20% the value of the car, and the value DOESN’T come close to going up by the amount spent.  Maybe after the new brakes and battery Moose is now worth $4,200.  So in essence, it’s almost like I’m losing money by fixing it to the tune of $600.

Five things to ask yourself before buying a new car:

1) Can you afford a new car?  You can only afford a new car if your income is at least 10X the value of the car you wish to purchase. This is known as the Financial Samurai 1/10th rule.  If you make less than 10X the value of the car, then you are hurting your finances.  Do you think Mark Zuckerberg drives around in a $800 million dollar car?  Heck, I was at a party with Mark Pincus, the founder of Zynga and the valet only went to retrieve a $75,000 BMW X5, and Mark is worth billions!

2) What percentage will the costs be compared to the value of your car?  Maintaining a car gets relatively more expensive as time goes on because the value of your car is always decreasing while costs generally increase due to labor and component inflation.  If a fix costs more than 30% the value of your car, and you can afford a new car, consider buying a new.  The benefit of buying a new car is that I won’t have to buy new brakes, tires, battery, etc.  Take the cost of maintenance of your old car and subtract it from the purchase price of your new car and re-calculate whether you can afford the new car.

3) Do you have any debt or other big expenses on the horizon?  Think property taxes, income taxes, trips, credit card bills, student loans, and other debt.  Best to minimize your expenditure on a depreciating asset if you have other large expenses on the horizon.  For some reason, guys right after college are especially weak at controlling themselves when buying a new car.

4) How long do you believe your old car will last, and how long do you plan on driving it?  My new brakes and battery should last at least 3 years.  My existing tires should also last another 3 years since I only drive about 7,000 miles a year.  Moose has 109,000 miles on it now, and he should have no problem going to 150,000.  Moose’s survival is consistent with the time I’d like to stay in San Francisco.  I have hope he will last for 6 years longer, which happens to be when I look to change sceneries.

5) Know your car’s maintenance cycle.  The big maintenance intervals are generally after 15,000 miles, 30,000 miles, 75,000 miles, 100,000 miles, 125,000 miles, 150,000 miles, and so forth.  You should consider selling about 5-10,000 miles BEFORE the main intervals and let the new buyer pay for maintenance.  I recently did the 100,000 mile service, and want to milk it for as long as possible.  If you don’t sell your car before it hits 100,000 miles, then you might as well keep it for as long as possible.

Related: The Ideal Length To Own A Car Is Not Forever

Fix The Car And Take A Gamble

Spending $795 on Moose is taking a gamble that nothing else major breaks down on a 11 year old car.  It would be quite unfortunate if an alternator blew up, costing me another $1,000. Then Moose becomes a serious money pit as now I’m spending 50% of the value of the car on maintenance.

My desire for driving a fancy luxury car has essentially fallen to 0 given the movement against luxury. When it’s time to make the decision again on buying a new car, I will consider safety issues as the main criteria.

In 2021, I am driving a 2015 Range Rover Sport HSE. I plan to own the car until at least 2025. It’s a great family car for my wife and two children.

Related: Plug Or Patch A Tire?

Recommendation For Your Car

Lower Your Auto Insurance Costs: Check out AllState online. They have some of the best plans with the lowest rates around due to their lower overhead costs. It’s worth spending a moment filling out a quote to see if you can save some money. Car insurance is one of the largest ongoing expenses for car owners. Esurance has good driver discounts, and multi-product discounts as well.

For more nuanced personal finance content, join 100,000+ others and sign up for the free Financial Samurai newsletter. Financial Samurai is one of the largest independently-owned personal finance sites that started in 2009. Everything is written based off firsthand experience. 

Consumers Stand Up For Your Rights: Honda MPG And Recall Issues

Updated: 01/07/2023 by Financial Samurai 101 Comments

Honda MPG Advertised
Misleading Advertisement

Consumers must always stand up for your rights. Don’t let bad products get away with being bad products. You deserve the product that was advertised.

One of the main reasons why I bought a 2015 Honda Fit was due to the advertised fuel economy of 32 MPG City, 38 MPG Highway, and 35 MPG overall. My old vehicle was getting 12-16 MPG as a 2000 SUV, and I wanted something more economical to drive around town and to Lake Tahoe.

After going through 8 gallons of a 10.9 gallon tank (fuel light went on), I discovered that Rhino wasn’t getting anything close to the advertised 32 City MPG.

Rhino clocked in a paltry 21.6 MPG, or a whopping 32.5% lower than advertised. I’ve since refueled the tank and driven another 200 miles and am now getting closer to 20 MPG in the city. I don’t know about you, but I find this difference egregious.

Here are some examples of getting 32.5% less than you paid for:

* Imagine paying $80 for a 60 minute massage and only getting 40.5 minutes worth.

* Imagine paying $100 for an NBA basketball ticket, and being kicked out 10 minutes into the 3rd quarter.

* Imagine paying $70 for a MLB ticket, and not being able to participate in the 7th inning stretch.

* Imagine paying $170,000 for a private university and only getting to attend for three years.

* Imagine paying $299 for the latest iPhone and only getting 43 GB of storage instead of 64 GB.

* Imagine selling an ounce of cocaine for $1,200 to your neighborhood gangsta who discovers that 1/3rd of the weight is actually powdered sugar. You’d probably get shot.

We buy things based on the advertised features. If the company lies about the feature, then obviously the consumer is being misled and should either get his or her money back, or get a discount based on the shortcomings of the advertised feature. I’m not going to buy the latest Macbook Pro 13″ if it performs like a Macbook from 2007.

Besides the MPG, I also bought the Honda Fit due to its short length of 160″ so I can find more parking spots. The final reason why I bought the Fit was due to Honda’s history of producing reliable cars that are hassle free.

I then got a letter in the mail from Honda.



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How Much Is Optionality Worth To You?

Updated: 09/13/2017 by Financial Samurai 43 Comments

D Sharon Pruitt

Photo by D Sharon Pruitt

When we first graduate, we have little-to-no options since we know nothing. We’re a cost center that does what we are told and likes it. We develop skills that provide us more options over time. We look for better opportunities or ask for raises with more skills. Sometimes we get complacent and just stick with a company for way too long like a bad boyfriend or girlfriend.

Eventually we stop being so parsimonious with our money because our financial nut grows to the point where we can afford luxuries otherwise foreign to us in the past. The luxuries I’m willing to pay up for now are convenience, time, and less stress. I used to be OK waiting at the DMV for 3-4 hours to register a used car. No more. I used to be fine waiting 45 minutes for a bus instead of taking a cab. But no more. Waiting in line for hours to get cheaper event tickets was no big thang. Now I am more than happy to pay a premium to get access to nice seats.

I think most of us who really care about our finances have a strong frugal side. Savings is in our DNA. We know that so long as we always spend less than we earn, we’ll eventually reach an amazing financial place. But due to the confluence of old age, awareness, and more money, we eventually change our spending habits.

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Deciding On Leasing Or Purchasing A New Car: Saying Good-bye To Moose!

Updated: 03/09/2022 by Financial Samurai 155 Comments

Deciding on leasing or purchasing a new car is a big decision that can cost you money if you make the wrong one. As a car fanatic since the 1990s with dozens of cars under my belt since, let me provide some tips on how to choose.

I have both leased and purchased cars over the past three decades.

Leasing Or Purchasing A New Car Decision

After 10 years, I’m sad to say Moose is gone! He just had too many problems that cost too much to fix as a 14 year old Land Rover Discovery II. I hated to let him go because he was like my big boy.

I still remember finding him with 87,000 miles at the orphanage (Craigslist) for $10,000 in early 2005. The owner got a sweet consulting gig in Amsterdam from Pricewaterhouse Coopers and she had to sell quickly. We agreed on the steal price of $8,000 and the fun journeys to Tahoe, Napa, and Carmel began.

Ferrari Enzo - Deciding On Leasing Or Purchasing A New Car
My new Ferrari Enzo

I actually hate driving today. There are just too many cars in San Francisco and the Bay Area now that the economy has roared back.

Traffic was very manageable just three years ago, but condos are sprouting up everywhere downtown next to main arteries, making driving very stressful. The worst is when delivery or garbage trucks double park during rush hour and traffic backs way up. Dear local politicians, please outlaw such activity.

There was a point where I almost thought about not buying a car at all, and just using UberX as it is so cheap and signing up for a ride-sharing program since prices have come down so much. But in the end, I still valued my freedom of being able to get in a car and drive anywhere whenever I wanted. 



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Free Uber Rides! Changing Lives By Disrupting The Rules

Updated: 01/04/2023 by Financial Samurai 44 Comments

Uber App Dashboard
Uber App Dashboard

Free Uber rides are great. Let me show you how to get free Uber rides in this post.

For the past several years, I’ve seen Uber grow from a scrappy startup to an enormous success based right here in San Francisco. In the Fall of 2013, the company was “only” valued at $3.5 billion.

As of 2021, Uber is now valued at roughly $70 billion! Instead of driving for them, the best way to get rich would have been to work for Uber when it first started in March 2009.

Free Uber Rides For All

Jabir, the “richest poorest person I know” actually became an Uber driver a couple years ago. He was unemployed for almost three years with a wife and daughter to support. It didn’t matter what time of day it was, he was always available to play tennis. We’d also drive all around the Bay Area to watch struggling professional players battle up the ATP points ladder for eight hours a day sometimes. As tennis junkies, we were in heaven!

Then one day Jabir stopped being available. No longer could he play pick-up tennis at Golden Gate Park at 2pm. No longer could he be my pal when everybody else had to work, so I had to find a new friend to pass the time after my morning writing was done. When I asked him what was up, he responded that he decided to drive for Uber.

For the next 12 months, I didn’t see Jabir at all. He drove ~10 hours a day for six days a week like a mad man. It was as if he was making up for lost time. When I asked him how much he was pulling in, he said well over $7,000 a month. Not bad coming from $0.

Uber allowed my friend and many other unemployed or underemployed people to find a way to earn some money and improve the inefficient taxi system in San Francisco. The disruption has been huge. I was even considering driving for them during my spare time, but Moose was too old as a 2000 Land Rover Discovery.

Starting in early 2014, Jabir began to come out and play again. When I asked him how were things going, he said that he was no longer driving for Uber, but driving a black SUV for a specific hotel instead. “Sam, I was getting too tired driving all those hours. Hotel driving is so much easier. Also, Uber kept cutting its prices so I was only making like $3,500 a month. It wasn’t worth it to me anymore.”

Jabir actually started outsourcing his car to his brother to drive for Uber so he could start collecting a percentage of his earnings and free up time for him to drive for the hotel. Smart man. There’s passive income opportunities everywhere!



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