Blog

Short blog posts, journal entries, and random thoughts. Topics include a mix of personal and the world at large.

Price sensitivity

The goal of President Trump’s tariffs threat is to bring manufacturing back to America, right? The downside of course is that things will become more expensive. Manufacturing didn’t leave America because of some evil corporate plan. The simple reality is that labor is cheaper elsewhere. Lowering cost of goods sold is a big lever to increase profits. Or have profits in the first place.

Tariffs are merely tacking those labor savings back onto the purchase price. There’s one for sure loser, and it’s the consumer.

For sure there are plenty of cheap crap coming out of China. But in the year 2025 it’s beyond pass time to acknowledge that China can also produce things of the highest quality. Did we forget the iPhone has been made in China since inception? The Apple smartphone is as precise a device as it gets.

“Made in the U.S.A.” still denotes a higher quality in people’s minds. Whether or not it’s actually true is up for debate. What is definitely true is that it’ll cost more compared to foreign-sourced manufacturers. I recently bought a barbell, and the unit made with American steel is $85 dearer than the Chinese-made equivalent from another company. The decision was easy.

Coming out of the high inflationary period of the pandemic, I am always looking for the best deals on anything. And doesn’t everybody? Who has the money to boycott Amazon (because big bad Bezos)? If a particular item is the cheapest on Amazon, I am buying it there. I do not have the income to support an artisan soap business at a farmer’s market. If you do, please go ahead.

I will live life as cheaply as possible, because everything else has gone up in price. Tariffs - if they come to full fruition - is only going to make it worse.

Splitting it four ways

Word on the street is DoorDash is partnering with Klarna to offer split payments. So now you can pay for that $30 (in total) delivery burrito in four easy monthly payments. Wonderful. I can finally afford to use DoorDash! Peasants who actually drive to the restaurants to pickup their own food: I cannot be you.

It’s hilarious to me that in response to high inflation, instead of abstaining from things that’s gotten too expensive, people are seeking methods to lower the initial cost! Can you really afford that couch if you have to split it over four months? I would argue no, though I understand the pressure. Even couches from famously inexpensive retailer IKEA are getting up there in price.

A used couch with curious provenance on Facebook marketplace it is.

Maybe our university can attract more students if it also partners with Klarna: tuition payments over many months. Oh wait, those already exists. it’s called student loans.

How another person spends their money (or borrows money to spend) is their business. These are consenting adults consenting to a purchase agreement. You cannot be victim of capitalism if you choose to participate. Of course we can’t not participate, but the bare minimum to subsist is not overwhelming. I get it, though: eating rice, beans, and chicken breast for every single meal is torturous.

So get that sushi takeout delivered via DoorDash! You deserve it. And by splitting it four ways using Klarna, you can afford it, too.

True cost of buying

If the economy is in the dumps, you know how they can spur spending? Give a tax holiday. Perhaps I’m the only one who thinks about this component? The sales tax is highly salient for me when it comes to big ticket purchases.

Remember in the early days of Amazon they did not charge sales tax? Those were the lucrative times. You can buy a television by the thousands of dollars and save hundreds on tax. Now I think we’re suppose to report that come tax time, but honestly, who the heck did that? Besides, doesn’t sales tax go to the state and city?

Never mind! As an employee of a state (at least until Elon Musk’s DOGE gets around to state public workers), I’m a big fan of the sales tax.

Look at buying a new car. The (let’s just say) $30,000 sticker price is not inclusive of the addition thousands in taxes the buyer must pay. Obviously it’s obscured by the mechanism of spreading it over multiple years in payments. (That’s how they get you!) I tend to look at it holistically: do I want to pay additional thousands to not even for the car itself?

What scares me from a mortgage (not that I can afford a house around here) is the amortization table. The amount of interests alone over a 30 year term is freaking outrageous. It seems more prudent to me to keep renting until I am able to pay a majority portion of a house in cash. Keep that money in investments in the meantime and let those interests come to me, instead of the bank.

The true cost of buying something significant is super important to consider.

A credit card person

After four years, my Yamaha CP88 keyboard is finally paid off. Why did it take so long? Well, Guitar Center allowed me to open a store card to spread the high initial cost over four years with zero interest. Of course I am going to take that arbitrage opportunity. That lump sum has instead been growing in my investment account.

You offer me free money, I am going to take it every time.

I recently had to buy new tires for the M2. For the occasion I opened a new credit card with Capital One. The company is offering a signing bonus: $200 cash back on a $500 spend within the first three months of account opening. There’s also zero interest for 15 months. That’s just easy money. I paid for the tires on the card, got the $200 as a statement credit, and will pay the amount in full sometime early 2026.

Buy now, pay later - splitting payments over four equally small ones - services like Klarna and Afterpay are showing up more and more on online checkouts. I’ve not use those services before, but if I ever need to split a large payment and take the zero interest arbitrage, it’s an easy decision. Heck, even my bank - Chase - offers a program to split large credit purchases over time, with introductory zero interest offers.

Of course, in order for me to “profit” from these credit opportunities, there has to be a loser on the other side of the trade. And it isn’t Guitar Center, Capital One, or Klarna. The loser is their other customers, the ones who are not paying the balance before interest (and back interest) starts accruing. It’s the credit debtors subsidizing the profiteers.

After paying off the new tires, I will never use that Capital One card again. Therefore, they will never recoup that initial $200 in startup bonus. Not from me directly, anyways.

Right to privilege jail, right away.

Money cushion

Word on the street is a five dozen carton of eggs at Costco is now a whopping $22 dollars. (Thanks, President Trump!) Those of us reliant on a high protein supply are in shambles. At the two eggs per day rate that I eat (which is kind of low, relatively), I might have to declare bankruptcy.

Elon Musk is taking a figurative chainsaw to the federal payroll. The city of San Francisco is in a massive budget hole. San Francisco State University (my employer) has declared a financial emergency. Seemingly every day another private sector company is shedding jobs. It’s not a great time, is it? We can’t be certain of our job security. And if we are unlucky to be fired, the job hunting market will surely be ultra competitive.

What helps soothe the stress in these uncertain times is to have a cash reserve. (I know, right to privilege jail. Right away!) Those of us with a proper emergency fund, one that can last us an entire year without employment, are sitting comfortable. Of course it would still suck to be out of a job, but not having to worry about covering rent for at least awhile takes away the dread. I will be fine either which way.

The dream is to stop working, right? Short of a lucky windfall, the best way to achieve that is to slowly stockpile the money. Keep it in a savings account for emergencies. Throw the rest into the market (not investment advice, do your own research) so that it can compound. I have a much better relationship with my job when I am not actively looking forward to the next paycheck to cover some debt hole I dug myself into.

Peace of mind in a capitalist system is to have capital. We work so hard in exchange for money. Mustn’t spend it all on TikTok shop!

A million dollars now

This video of how to become a millionaire on a low income came up on my YouTube algorithm. The obvious too long didn’t watch is to spend less than you make, and consistently invest that difference into the stock market. After a few decades of that, a person will generally have a million dollars in net worth.

That’s all well and good. I’ve been doing a version of that since I’ve started working. However, I don’t think being a millionaire at retirement is what people are looking for. What we all want is to be a millionaire now. It cannot be argued that it’s better to have a million dollars in our thirties than in our seventies. The opportunities to use that million dollars is vastly more in our youth than in golden age.

Take traveling, for example. A younger person will have more energy to tackle a European grand tour, with many hikes and arduous transit days, than a retiree. What about home ownership? A millionaire retiree likely already has a home. An early working adult could really use that million dollars to secure a roof over his or her head.

A restaurant recently opened near me that operates until 2:00 AM. I remarked to my friends that this would have come in handy during our college years. Then I realized we wouldn’t have the money for it then. We have the money for it now, but none of us are staying up late into the morning hours voluntarily anymore.

It seems the timing of money and when we can best use it has an inverse relationship. Warren Buffet would surely trade in all of his billions to reverse his age (hypothetical, of course). Parents who are able to give money to their children should not wait until they themselves die to leave an inheritance. The children need money the most when they are starting out in their careers.

Don't blame the system

This video popped up on my Youtube feed talking about how credit card companies are criminals for charging such high interest rates. But that’s a bit disingenuous. People aren’t forced to deal with credit card issuers. You absolutely do not need a credit card! Cold hard cash will always be king. There’s also the debit card too, if convenience is what you are after.

I’ve had and still have many credit cards, and never have I paid a penny of interest. (Good move by President Trump in directing the Treasury to stop minting pennies.) Credit cards are a fantastic financial tool, so long as the monthly balance gets paid in full. The issuers can charge the most usurious interest rate, and it wouldn’t affect me one iota. That’s how everyone should be using the cards. Visa and MasterCard more than make enough money on swipe fees.

It’s wrong to call something predatory when both parties came to an agreement. The customer borrows money from the credit card companies, with the promise to pay it back. Interest will be charged if payments are late. It’s not the issuer’s fault if the customer did not read the APR fine print. The issuer is not evil because the customer cannot fully pay the balance in a timely manner. It’s hugely infantilizing to obviate responsibility from fully grown adults.

Again, credit cards are not necessary to living. People did just fine before their invention. Whatever life emergency that people use the cards to cover should instead be covered by an emergency cash fund. Don’t have one? Eat only rice/beans/chicken/lentils (a completely nutritious meal for very cheap) until you’ve saved enough. Sorry, DoorDash is no longer in your vocabulary.

If you’re in credit card debt, it’s time to reevaluate your expectations of what is truly necessary in life. The Amazon habit is too difficult to quit? Better increase your income, then.

I know. Right to privilege jail. Right away.