I Can’t Afford To

It almost seems like ancient history, but back in September 2018 I penned a piece that contained a blurb on tariffs.  Specifically how I was going to take a page from the former president’s playbook and tariff myself on certain purchases as the US consumer is really the one paying the freight in a trade war as most levies are generally passed on through.

Now I didn’t follow up on the results for which I apologize.  I did, however, have an ulterior motive in that I wanted to illustrate an investing concept that could be easily used by anyone.  Like my sister.  Or my good friend.  What both had in common was a belief that they couldn’t afford to invest and refused to comprehend they couldn’t afford not to.

My sister is a regular at Starbucks.  Though she has no qualms in plunking down $5 for a drink, when I suggested putting $1 aside with each purchase to become a part-owner her retort was, “I can’t afford to!”.

My friend is self-employed.  In his line of work, he uses 3M products.  I suggested he invest $25 from each job into 3M stock and his response was eerily similar.

Perhaps the fault resides in my corner as I did not provide a diagram highlighting potential future rewards.  This week, dear readers, I deliver the results I attained by tariffing myself $10 for each purchase of Band-Aids, mouthwash, toothpaste and deodorant from September 2018 to today.

Surprisingly, I would have expected more purchases during this timeframe but the lack of buys does reinforce the theory of affordability.  Also a word of caution – these results were during a bull market so a bear market would probably yield a significantly different outcome.

Someone like my sister should not focus on the $16.00 (including dividends) gain over two years as this is only a pittance of the possibilities.  Rather the 7.8% total return is the key to motivate and reinforce behavior – and increase the personal savings/investment rate. It matters not as to whether $100 or $100,000 was the seed money – 7.8% was the result in this experiment.

I’m pleased to report my friend has now opened a brokerage account. Still waiting on sis though …

SPAC Report

Item 2 this week is the new EV charging SPAC announcement.  EVgo will be going public via the Climate Change Crisis Real Impact I Acquisition Corporation SPAC (CLII).  Although on my list I didn’t buy this one.  If I had, I’d probably let it ride.  Since I didn’t, I MAY buy AFTER the merger.  The concerns I have with this one (perhaps unfounded) are:

  1. It appears to be a way to monetize an existing asset at top dollar (partial exit strategy)
  2. The press release is a sales job
    1. The GM relationship is essentially a leveraging of tax breaks, government grants and a little corporate largess thrown in.  Nissan’s is a $250 charging credit.
    1. Though data is hard to find, it appears many retailers cannot justify the cost of maintaining and installing equipment without subsidies.  (Costco, for one).  I’m uncertain that their business model incorporates subsidization.

While they may lay claim to being “the largest platform for EV public fast charging in the U.S. “, their roughly 800 stations pale in comparison to Chargepoint’s 115,000 or EVBox’s 15,000 worldwide.  I believe it’s more so how the numbers are parsed.

Don’t get me wrong – my thinking is they (along with others) are on the right track heading towards the future.  To hype the narrative makes me think twice and will choose to wait for their first reported results as a public company before choosing to invest.

Just my opinion though …

Hope your week is good. Next week’s month end summary will probably post Tuesday as I’ll be receiving January dividends the evening of the 1st. Can’t believe two of my companies are paying on Saturday the 31st …