Paying TOO MUCH for internet?

According to Reviews.com the US lags behind the rest of the developed world in both internet speed and affordability. In Tokyo, Paris, and Bucharest, $40 will get you around 300 Mbps; in Kansas City and most of the US, it’ll buy you 30 Mbps, according to New America’s The Cost of Connectivity 2014 report. So what do you do? Well, the best thing to do is figure out just how much bandwidth you need. To do that go to the FCC’s Broadband guide. Don’t ask your provider. Their first line of customer service is to sell you more product. As an example, my family is a light to moderate user according to the FCC. When I signed up with Comcast they didn’t even ask me any usage questions. They went ahead and signed me up for the Blast which is about ten times what I need.

Now figuring out what package you need from your provider is a little trickier. Take Xfinity for example. The way their website is set up you can’t just go there and find out what package gives you X amount of Mbps at what price. You have to talk to one of them. Why do you ask? It’s because the few telecommunication monoliths have created local monopolies. Your options from the major providers will depend almost completely on where you live. And in order to take advantage of that local monopoly and charge you the most that they can they don’t publish national rates. Check it out. Go out to Xfinity and try to find a price structure before you put in your address. You can’t.

You can do an internet search on “internet speeds” but be prepared to search. The information isn’t compiled in a specific area that I can find as of yet. Here are some of the speeds: Comcast Xfinity, CenturyLink. Once you’ve purchased a package you can make sure you get what you pay for by periodically checking your upload and download speeds. You can do that at Speedtest. The nice thing about Speedtest is that after you’ve checked you speeds you can answer a survey that allows them to track those speeds.

Your internet provider can also do something that is called “throttling.” This is where the ISP slows your download speeds for whatever reason. How many of you have been watching a movie on Netflix when all of a sudden the movie begins to buffer? This could be a case of your ISP throttling you. Lifehacker addresses the issue and tells you how to measure whether you are being throttled by using Glasnost.

My partner had her car broken into a few months back. When talking with the sheriff about it afterward his advice was “don’t be a victim.” When choosing an internet provider don’t be a victim. Do your research first. Broadband Now will help you find the internet providers in your area.

 

Give Yourself a Raise

The Multiplier Effect as talked about on the AMIBA website is a way to give yourself and your community a raise. The way the multiplier effect works is that when you buy local you recirculate that money through your local economy in more ways than you do if you shop at a national chain. The impact happens in three ways:

Direct impact happens when the business spends money in the local economy to operate the business, including inventory, utilities, equipment and pay to employees.

Indirect impact happens when those other businesses recirculate that money to other local businesses.

Induced impact happens through consumer spending when employees and business owners spend money at local businesses.

The difference between spending your money at a local business versus a chain is that when you spend at a local business 48 cents of every dollar recirculates through the local economy versus 14 cents if the money is spent at a local chain. That’s a difference of 34 cents.

Now if we look at the GDP (Gross Domestic Product) per capita then we can measure how much of a raise we give ourselves when we shop locally. As I’m currently living there, let’s look at New Mexico. Per capita GDP in New Mexico in 2015 was $41,551. If all of that money was spent at national chains then each resident of New Mexico is giving themselves a raise of 14 cents of each dollar spent or $5,817 per year. Now if everyone spent their money at local businesses the amount of a raise everyone would be giving themselves would be 48 cents of each dollar or $19,944 per year. That’s a difference of $14,127 per person, per year.

This assumes that every dollar you spend is spent at local businesses and that everything you need is manufactured locally. Which is never the case. But, by shopping as much as you can locally you end up paying yourself more than if you shop at a national chain.

Look up your state’s per capita GDP and figure out how much of a raise you can give yourself by shopping local.

F#ck You Money

The popular definition of “Fuck You Money” is that you have enough money that when your boss asks you to do something you don’t want to do, like take a pay cut, you can say “Fuck You.” Following is a simple formula for creating “Fuck You” money.

Save 1/2 of what you make and invest it.

The nice thing about this formula is that the more you use it the longer you can say “Fuck You.” To make my point. Let’s say you get paid $200 every week. If, with your next paycheck, you take $100 and invest it at 5% interest you can tell your boss “Fuck You” for 1.05 weeks or 1 week and about 8 hours. If you do this on your first pay check you’ll probably be looking for a job, so I wouldn’t suggest it. But look at what happens if you do it for a year. Investing $100 a month at 5% compounded monthly will give you enough money to say “Fuck You” for 1.115 years or one year and 4.5 days. Having a year and 4 days to find a job before you run out of money is better than only having a week don’t you think?

Now look what happens if you do this for 5, 10 and 20 years.

5 years: “Fuck You Money” = 5.797 years or 5 years, 9 months and 17 days.

10 years: “Fuck You Money” = 13.131 years or 13 years, one month and 17 days.

20 years: “Fuck You Money” = 34.621 years or 34 years, 7 months and 14 days.

What do you think having the ability to say “Fuck You” for 5, 13 or 34 years is going to do to your presence of mind? I’m thinking it’s going to make you a hell of a lot more confident, less likely to take shit from anybody, make you a better employee and definitely allow you to negotiate your pay better. It makes sense doesn’t it? If you want to work out your own scenario go to the savings calculator on dinkytown.net.

The trick is saving half of what you make and investing it in something that will give you 5% interest. As for saving half of what you make check out my other blogs on how to save money: Affordable Nutrition, Buying Used, and Buy Local.

To get a consistent 5% return on your money you’re going to have to educate yourself on investments and there is plenty to trip you up especially the lure of higher returns. All I can say about the lure of higher returns is beware. If it’s sounds too good to be true it most likely is. A good place to start your education is with index funds. The other thing you can do is find a good wealth manager. But again, you’re going to need to do your homework. I would suggest against wealth managers at investment banks. There is something about that combination that stinks “conflict of interest” to me. Also, you don’t want a manager who gets paid commission on what they sell you. Instead pick one who gets paid on the value of your investments. That way they get paid more when your investments grow. So the incentive is to grow your investments. In the mean time start socking away the cash.

 

Top Reasons to Buy Local

The biggest benefit I see to buying local is that, compared to an online retailer, you return almost fifty times the amount of money back to your community. This increases the wealth of everyone in the community. It decreases taxes because it puts less of a strain on infrastructure. It employs more local people. It fosters choices more in line with the values of the community. It creates a more cohesive community which leads to less crime. It is healthier because with the increased cohesiveness there is the tendency to address health problems more effectively and the food is better for you.

Buying local also increases the unique characteristics of your community which increases tourism. When you go on vacation do you eat at a chain restaurant or do you sample the local fare? Do you shop at Walmart or do you try the local shops who have a more unique selection? Do you engage in the cultural activities that only your destination has to offer or do you choose the same types of entertainment you can find in every major city? You choose the local color of course. Otherwise, why would you go on vacation? Encourage others to enjoy a richer cultural experience when they come to your town. Support your local businesses.

If you want to increase your wealth and the wealth of your community get  involved with your local business alliance. They can help.

 

Buy Used

One of the best ways to save money and keep it in your community is to buy used. This can be done with everything from automobiles, furniture, power tools, lawn equipment, hand tools, bicycles, camping gear, sports equipment, construction material and just about any other kind of hard good and even some soft goods like clothes. Buying used means that you’ll enjoy a 30-90% reduction off of original price and if you use a local thrift store or buy from a private party virtually all of that money stays in the community.

Let’s look at automobiles as an example. The minute you drive a new car off the show room lot it loses 20% of it’s value. That’s 20% that goes directly into the pockets of the wealthiest people in the country. On a thirty thousand dollar auto that’s $6000. So what do you do? You buy used. You want a new car. Don’t buy one. Instead buy a car that has less than 10,000 miles on it.

Let’s take an example. Say you want to buy a Chevrolet Malibu. To buy the LTZ model new you’re going to pay about $30k. If instead you spend that $30k on a used car you can get a 2014 Chevrolet Equinox, a 2011 Audi Q5, a 2009 Dodge Challenger, a 2006 BMW M5, or a 2009 Corvette. By buying a car that is one to five years old you upgrade your ride and keep a bigger portion of those dollars in the community.

Now there are some drawbacks to this, like the warranty will have less time on it or the car could have been in an accident. So you’ll have to do your due diligence. When you buy from a dealer or a private party have the car checked out by an auto body person and an auto mechanic that you trust.

Also, if you use a local dealer rather than one of the manufacturer’s franchises; more of your money will stay in the community, many times the shop rate is lower than the franchises and the customer service is often more personal.

How to Save a Million Dollars

Screen Shot 2016-05-25 at 6.17.37 AM

Here we have how to save a million dollars using Dinkytown’s Future Value Calculator. All of these scenarios use 5% interest compounded monthly with weekly deposits. What changes are the amounts of the initial and weekly deposits.

Time: 40 years, initial deposit: $190, weekly deposit: $150, Future Value: $1,000,006

Time: 30 years, initial deposit: $373, weekly deposit: $275, Future Value: $1,000,004

Time: 20 years, initial deposit: $533, weekly deposit: $557, Future Value: $1,000,001

Time: 10 years, initial deposit: $1981, weekly deposit: $1472, Future Value: $1,000,000

Naturally the future value will change if you change the other numbers but this is a good baseline to start with. The trick is to find a good solid investment that’s going to give you that return on a consistent basis. That’s where your Community Financial Institution comes in. Generally they have investment advisors that can help.

Once you have the plan all you have to do is save the money.