Subscription Service Value

The Inverse Correlation of the value of Subscription Services to the difficult of cancelling

Today, August 20th, 2020 I put forth into the world a new theorem.  This one states that the value of a subscription service is inversely proportional to the degree of difficulty in cancelling it.

We’ve all had those “services”.  The ones we think, what on earth is THAT? Or, I don’t need that?  Do I?  So, you go to cancel it and it gets challenging.  Maybe you can log on to the website.  Maybe, if you’re lucky.  You find your account.  There is no obvious unsubscribe or cancel function.  You try to delete the payment method, but alas, foiled there, too.  You can’t delete or change your payment method.  If you haven’t given up and just agreed to pay this annual invoice and deal with it next year, you can call them.  Often, you get to be on hold.  Then, you get to listen to what great calamity will befall you if you cancel.  You will no longer be in compliance.  You have to have this from someone.  You need to tell us what you’re going to do before we allow you to cancel..you know..for your own benefit.

Those services are difficult to cancel because the value provided is not close to the value being taken.

CANCEL.  

And be careful to not subscribe intentionally or accidentally in the first place.  You must remain vigilant because the auto chargers and annual renewers will get you, one annual fee at a time.

Investment and Wealth Building Commandments

Commandment 1:   Don’t blow things up

    There are very few investment opportunities that will compensate you accordingly if you blow up principal.  The reward for a blow up risk needs to be outsized and that investment needs to be a small part of your portfolio.  Don’t blow things up and don’t blow up your portfolio!

Commandment 2: Build a strong foundation

Build a strong foundation of diversification and income generation that will stand the test of time.  Immediate income is great.  But, a foundation that continues to spit out income year after year is a whole lot better.

Commandment 3: Concentrate and diversify

Concentrate your efforts while diversifying them at the same time.  Don’t get too spread out in the hope for diversification. You can diversify within your geographic area and within your knowledge and interest area.

Commandment 4: Be tax efficient. 

Again, current income is great. The government likes it too, often to the tune of 40% to 50%.  Income that is deferred or is recognizable at one’s discretion can become very lucrative in tax savings or deferral alone.  Capital gains income is better than earned income but deferred income is better still followed by unrecognized income being the sexiest of all.  Notice I didn’t say NO income.  I said unrecognized income.  Earn income.  Just don’t have taxable income. 

Commandment 5: Don’t chase shiny objects 

There are always amazing opportunities that you hear from friends that are in the news. Be skeptical of these. These are being sold to you in one way or the other. Do your own homework and do your own math and don’t worry about the sex appeal or missing out.

Commandment 6: Have fun.

Do something you enjoy.  There are many investment opportunities that can be profitable.  Do what interests you and what you enjoy.  Life’s too short to make it a mutual fund, unless of course mutual funds float your boat.

PAY ATTENTION TO YOUR PHONE, CABLE, AND OTHER BILLS!

Profit doesn't happen.  You make profit happen.  Some businesses are fortunate and money just rains down upon them.  But, for the other 98%, profit is something you have to make happen. It doesn't just come to you.

One (of many) of the reasons profit doesn't just come to you is sneak charges.  I just got one of my three AT&T bills this month.  This one is for internet service.  In looking over it, I noticed this....TS360 Backup and Support = $17.61.  Furthermore, there is a separate phone number to call for questions about this charge. What is this, you ask?  I don't know either.  So, I called.  And called again.  Finally, I did get a nice lady on the phone from this AT&T product unit who explained that this was a backup system for my computer.  Yeah, I never subscribed for that.  Yeah, that's kind of expensive even if I wanted it.  She was nice enough to remove the charge that I didn't subscribe to.

The point here is that you have to pay attention.  Every month.  Every bill.  AT&T is not the only offender.  I've seen this with utilities, cable companies, phone companies, etc.  If you don't recognize a charge, call and investigate.  Don't let it go because it is small. Small adds up.  Eventually, those layers of expenses will eat away your profits. 

If AT&T eats your profits, where is the fun in that? 

POP MUSIC AND MUTUAL FUNDS

Back in the day, the radio played songs by people or by bands.  You had Madonna or Guns n Roses or Billy Joel or Yaz.  Ok..no one listened to Yaz. 

Today, all top 40 songs are collaborations.  Madonna/BillyJoel; BillyJoel/GunsnRoses, etc. 

How do mutual funds come into play here?

I look at today's top 40 as essentially a mutual fund.  The songs are basically factory produced.  To reduce risk and ensure a certain level of sales and airplay, two or three top 40 artists combine to “make” the song.  It's essentially a mutual fund of music.  They aren't trying for a 20% return but rather a steady 6.54% with a standard deviation of the ROI of about 1.24 points. 

Mutual funds are boring.

Pop music is a mutual fund.

Using that valuable transitive property, Pop music is boring. 

Now, what's next?

Obviously, index funds.  Future pop music will no longer be a two or three party collaboration. but rather a collaboration of all artists currently deemed top40.  The return will be 4.2% with a .15 point standard deviation.  I don't know how we will deem top 40 but I presume this will be via a popular vote on a pseudo-reality tv show. 

Now, some index funds are good.  Think Band Aid.  However, for every do they know it's Christmas, we will have 39 other songs in the top 40, each comprised of the same 40 artists in rotation all sounding essentially the same.

Then, there will be a music revolution.  In 25 years, some upstart band will come out with an insane "new" song and blow everyone's minds with just a simple artist's name.  At Christmas, the 10-year-olds will be listening to it and saying Great Uncle Jeff, Great Uncle Colby listen to this awesome song.  And we'll dutifully listen, because we haven't turned on the radio in 7 years and then we'll blow their minds with our intricate knowledge of Sweet Child O Mine and regale them with tales of seeing the original band (they didn't know the song was a cover) in 1992 (they also didn't know time went back that far).