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Proprietary Data Insights Top Restaurant Stock Searches This Month
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Protecting Your Pocketbook In case you missed it, in the first Juice newsletter of the new year, we outlined our plans for 2023: We’ll double down on our promise to make sense of the economy, so together, we can be better with money and become better investors. We’ll also share more hacks, ideas, and strategies about spending, saving, debt, and other important elements of your personal finances. Plus, in February, we’ll spend some time going back to basics on two areas we expect to get even more popular with investors in 2023 than they were in 2022: ETF and dividend growth investing. No matter how much money you make, basic to advanced personal finance, as it merges with investing, matters. Because you can have money problems or simply benefit from small tweaks whether you earn $35,000, $350,000, or somewhere north, south, or in between. Case in point: The latest data shows that 63% of Americans live paycheck to paycheck as of November 2022, up from 60% in October. Among six-figure earners, a surprising 47% live paycheck to paycheck, up from 43% in October. The way we not only spend money, but also view spending money, often matters more than how much money we make, especially if we’re making decent or better money. Scroll with us for more interesting, if not alarming, data and important distinctions on how we spend. |
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Spending |
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What’s Worse, $30 for a Pizza or $1,000 per Car Payment? |
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Key Takeaways:
The problem with taking money advice from millionaires and billionaires is the personal finance tenets they live by often don’t apply to the rest of us. They don’t because they can’t. For example, Dallas Cowboys owner Jerry Jones apparently once said something to the effect of he passed on buying an expensive pair of boots, but didn’t think twice about investing in a private jet. Do You Really Have to Spend Money to Make Money? True or not, the Jerry Jones story is one of those legends that led to the present overabundance of money articles touting what people such as Mark Cuban and Elon Musk do with money and how you ought to do likewise. And the corollary distinction between alleged frivolous spending and investing money in yourself, your business, or both to, theoretically, make more money. Which leads us to the aforementioned interesting, if not alarming, data:
The Juice has a real estate agent friend here in LA who calls himself frugal. He’s the kind of guy who, under no circumstances, will pay $30.00 for a pie or $5 or $6 for a slice. He claims it’s throwing away money. Like Jerry Jones not buying boots. Meanwhile, he’s a proud member of what we’ll call the 15%. Just over 15% of people who financed a new car in Q4 2022 took on a monthly payment of $1,000 or more. That’s the highest this number’s ever been. Our real estate buddy calls it an investment. Like Jerry Jones’ private jet. He can’t drive up to a showing or open house in a “shitty car.” In an Audi, he both looks and plays the part of a successful real estate agent. Currently, he rents a $5,000-a-month luxury apartment in Downtown LA. His two biggest expenses are all about status, appearance, and, in his words, “how it makes me feel.” The apartment and car make him feel successful, which “manifests a mindset of success.” Also his words. Also, so LA. Dropping $6,000+ a month on your two biggest expenses and living paycheck to paycheck. Scoffing at the $30 pizza not on principle, but because you can’t afford it. That is, unless you put it on your credit card. When you live beyond your means on your biggest expenses, you can barely make ends meet at the end of the month.
The Bottom Line: There’s a difference between splurging on pizza or even a trip to Europe and consistently living beyond your means because you rationalize the latter as an investment. For most of us, it’s not the pizza or vacation that makes things tight at the end of month, it’s what we pay for our biggest obligations. For goodness sake, park around the corner and walk to the open house. And give up the den, terrace, and extra bedroom so you can cut your rent 40%. Take those thousands of dollars you save each month, buy $30 pizzas almost at will, and marvel at how much cash you have left over after you pay your rent on the first day of the month. That’s how you construct a budget and should view spending when you’re a mere money mortal – not Jerry Jones, Mark Cuban, or Elon Musk – in a way where priority #1 is to have monthly surpluses you can use to live, save, and invest. |
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