Did your Comcast bill go up recently?

Comcast has a reputation not only for atrocious customer service, but also slyly hiking their monthly rates for services without any notice or explanation.

A simple Google search for “Comcast increasing my bill” will yield thousands of disgruntled customers bitter and confused as to why their bill was increasing. One customer went so far as to say “I would NEVER recommend Comcast to anyone unless you want to add more stress and frustration into your life.”

It seems that Comcast has a tendency to inch up their rates a couple of dollars some months for certain services, or package deals like their Triple Play for phone, internet and cable.

Another customer who experienced particular issues with their Triple Play package pricing. “I signed up for the triple play in December 2014 that was supposed to be $79 the first year and $99 the second year.  They have been charging me $148 the entire time, they are not able to give me any of the money that I overpaid,” the customer said.

People who call Comcast are greeted with hold music, infamous customer service, and a generic response about the increasing costs of installing new Fiber Optic technology. Unfortunately, the customers who are paying for these upgrades are far from receiving the benefits. They are never warned of emerging price hikes, and have to wait on the phone for hours to get explanations, rarely resulting in a price adjustment.

Comcast hopes that users will:

(1) Not notice the change in the price of their services or

(2) Be so sick of their customer service that they won’t bother to inquire.

So watch your bill carefully!

To the Moon: Why Are Credit Card Interest Rates So High?

No matter which credit card company you choose, you will inevitably find one major thing in common – a very high interest rate, and a zero-tolerance late payment fee. In fact, if you compare this interest rate to that of a mortgage or car payment it might even be twice as much. As of this month, the average annual credit card purchase interest rate (APR) lies at a hefty 16% for travel reward credit cards, all the way up to 21% on average for cash rewards cards.

But why are they so high?

The answer lies in a combination of profit and risk. Many credit cards charge no upfront cost or annual fee for use, but instead capitalize on monthly $35 late fees (which luckily the government capped!) and interest on statement balances at these soaring rates of 20% per year. As long as banks charge interest rates that are more or less on par with their competitors they will do their best to hike the rate as high as possible.

They start with this thing called a “prime rate” which is an index of interest rates banks charge their most reliable customers. The Fed also helps determine this rate – it’s normally around 3.5%. Then, depending on your individual situation and credit history, the bank will add a margin. This is usually a pretty healthy chunk if they ultimately end up at around 20%. The worse your credit history, the more risky a customer you are and thus the higher your APR. Credit card interest rates (and late fees for that matter) are significantly larger than those for mortgages etc. because banks have no collateral against your use of their credit cards (like a house or a car), so they adjust the rates to account for this increased risk.

How do you solve this?

Well, the 🔑 here is managing your credit history and credit score so that banks “trust” you more and in turn lower your respective interest rate. This comes from:

  1. Consistently paying your bills on time (and in full when you can)
  2. Budgeting to spend within your means and;
  3. Cutting out any frivolous expenditures.

Finally – do your best to avoid running a balance on your credit cards! That’s the only sure way to avoid these killer APRs.

First Person: Get It Together, Bank of America

First Person: This is the first in an ongoing series of personal stories about our broken financial system. This article is written by Kabir, Marketing Intern @ Trim and recent Bank of America customer.

Credit card companies make exorbitant profits by exploiting their customers’ unawareness of shrouded costs and terms of using their cards.

I’ve experienced these unfair tactics myself with Bank of America’s credit card offerings. BoA’s mobile and online banking technologies are far behind their competitors, and they made me jump through countless hoops to set up a recurring payment. While most credit card companies will easily let you pay your statement balance via an auto-debit, and set this up online, BoA (the third largest retail bank in the U.S., you should note) takes “the road less traveled.”

After I messed around with their ancient website for about an hour, I found that online you could only set up recurring payments for fixed amounts or for the minimum payment. I called the bank up, and was then transferred to four different people before I was told the process required of me to auto-debit my statement balance. It was as follows:

  1. Print out a form;
  2. Fill out the relevant details;
  3. Attach a voided check with my bank account and routing number information and;
  4. Mail it in to Bank of America.

The worst part: the payment scheme only activated two cycles after they had approved all the details. Wanting to pay my bill in full and on time should NOT have been such a difficult process!

This is one example of a disease that enables the credit card industry to force late or forgotten payments, and it needs to be stopped. 

I am a young adult, managing my mounds of work in college, trying to sort out job opportunities while staying on top of other commitments in my day-to-day life. I need something to keep my finances in order, because otherwise they fall by the wayside.

No Weird Tricks: Get On That Resolution

BOOM! 2017!

“New year, new you,” right? Or same you, with a few new, ambitious goals. Perhaps they’re health or job related? What about the moolah? If you’re making resolutions, don’t forget the 🤑.

While exercise and getting a raise at work are both important, it’s also worth taking this clean break from last year to give your finances a review.

With the current transition of virtually every service to some form of a subscription, it would be worth your time to have a look at your bank statement. What’s the plan? What are your recurring payments? Do you want to save for a vacation? After all, you just had one.

Maybe take some time to do some budgeting. Where does it all go? Cut the fat. Burn it, if you have to. Sign up for Trim, of course. Look at your new dashboard and marvel at the account balances. Or cry, depending.

Start 2017 off right before you get too busy, or run out of money. Happy New Year from Trim.

If It Seems Too Good To Be True, It Probably Is: The 7 Biggest Financial Scams in American History

From the Wild West to Wall Street, the tradition of fast-talking confidence men pulling a fast one on unwitting customers is American as apple pie. In the search for a great deal or a phenomenal return on their investments, it’s all too easy for even the savviest consumers to fall prey to fraud — and this holds even more true in this brave new world of anything-goes online content.

Besides a healthy dose of skepticism whenever you get an email about a “sweet new investment opportunity” from a “deposed Nigerian prince,” hearing the scoop on previous scams could help you avoid becoming a victim: the past repeats itself, after all, and some of these swindles aren’t quite so easy to detect.

Without further ado, we present the seven biggest financial scams in American history. A quick note on methodology: we define “biggest” as the total dollar value lost, adjusted for inflation when necessary. This effectively limits the scope of our list to the past one hundred years.

  1. WorldCom

Total losses to investors: ~$100 billion

Led by CEO Bernie Ebbers, by the late 1990s WorldCom was the second largest telecommunications company in the United States, employing an aggressive growth strategy to gobble up competitors. But the company began to show signs of trouble during the market downturn that began in 2000.

In 2002, a small team of internal auditors uncovered evidence that Ebbers and members of his executive team had employed fraudulent accounting methods beginning in the early 1990s, eventually inflating WorldCom’s assets by a whopping $11 billion in order to maintain the value of the firm’s stock. WorldCom filed for Chapter 11 bankruptcy protection in 2002, and its stock price plummeted from $64 to $1, costing its investors nearly $100 billion.

Lesson learned: This scam would have been tough for an average consumer to avoid; it’s always a shock when a company that seems like a “blue chip” goes under. One lesson is to avoid investing in individual stocks and instead buy index funds, which broaden your exposure so you’re less affected by unpredictable tail risk.

  1. Enron

Total losses to investors: ~$74 billion

Before the name Enron became synonymous with fraud, the Houston-based energy and services company was the darling of the financial press: in the late 1990s, Fortune magazine named it America’s Most Innovative company for six consecutive years.

But in the fall of 2001, skeptical reporters began to peel back the morass of corrupt practices underlying Enron’s soaring stock. The company’s CEO and COO, Ken Lay and Jeffrey Skilling, and other executives had cooked the books in countless ways, hiding billions of dollars in debt from business failures within opaque corporate entities that never showed up on the company’s balance sheet.

Once the extent of the scandal became clear, Enron’s stock plummeted from a high of $90 in mid-2000 to below $1 by the end of 2001, wiping out close to $75 billion in shareholder value. The Enron scandal was so unprecedented in size and audacity that it led to the creation of new legislation — the Sarbanes-Oxley Act — which increased penalties for defrauding shareholders.

Lesson learned: Again, it’s tough for everyday investors to dig deep enough to uncover this kind of fraud, so the best way to protect yourself is diversifying your investments.

  1. Madoff Securities

Total losses to investors: ~$64 billion

One of the most recent major swindles to grace the newspapers, Bernard Madoff ran an exclusive investment fund that produced unusually steady returns — about 10% — for decades, in good markets and bad. His statistically improbable consistency prompted many in the investment management industry to wonder about his investment strategy.

In one of the most dramatic revelations of 21st finance, Madoff’s own sons discovered that Madoff Securities was in fact a giant pyramid scheme. For decades, Madoff had used a constant stream of new investments to pay out his old investors, but his lie couldn’t sustain itself when the 2007-08 financial crisis incited his investors to ask for their money all at once.

Prosecutors estimated that Madoff’s liabilities to his investors were on the order of $64 billion; the damage was made worse by the fact that many of his investors were charitable organizations. Madoff is currently serving a jail sentence of 170 years.

Lesson learned: Most of Madoff’s investors went along when he refused to give them any details about his investment strategy. If someone tells you they can make you money but refuses to tell you how, run away as fast as you can.

  1. Bayou Hedge Fund Group

Total losses to investors: $350 million

One of the more dramatic scams on our list, Sam Israel promised his investors that the $300 million they invested with him would multiply more than twenty times into $7.1 billion over a ten year time horizon.

When the investments began to underperform in 1998, Israel lied to his investors and then made a break for it, only getting arrested when his mugshot appeared on America’s Most Wanted. Unfortunately, by this point his investors were out more than $300 million.

Lesson learned: If someone promises you an investment return that’s too good to be true, it probably is.

  1. Financial Advisory Consultants

Total losses to investors: $311 million

Over the course of two decades, James Paul Lewis Jr. collected hundreds of millions of dollars from investors, often elderly retirees. Relying on trust and word of mouth to build a reputation for his innocuously-named company, Financial Advisory Consultants, Lewis told clients he was investing their money. Instead, he used it to fund a high-flying lifestyle, blowing client money on luxury cars and fancy homes.

In 2003, investors raised the alarm when Lewis stopped paying dividends; soon after, he went on the lam, eluding authorities until 2004, when a FBI manhunt cornered him in Houston. In 2006, a judge judge imposed the maximum sentence of thirty years on Lewis; at the time of his sentencing he was sixty years old, around the age of many victims who lost everything.

Lesson learned: Diversify — never put all your investments in one basket! Try to insist that your investment managers have their funds audited by an independent third party.

  1. Charles Ponzi

Total losses to investors: $20 million (~$230 million today)

The original swindler, Ponzi was a habitual schemer who now has the unfortunate distinction of having a whole category of fraud named after him. Back in 1920, Mr. Ponzi promised investors a 50% return in 45 days by buying discounted postal coupons in other countries and reselling them — a promise he fulfilled, for the first few investors, by paying them with funds received from new investors.

News of Ponzi’s “strategy” spread fast, and soon even banks sought to get into the deal. But as is the case with all pyramid schemes, Ponzi’s endeavor reached an explosive end when his publicist found evidence that indicated Ponzi was simply “robbing Peter to pay Paul.” He went to jail.

Lesson learned: The more “exotic” a money-making scheme is, the more likely it is to fail or be totally made up — especially when pitched by an amateur with no real experience.

  1. Stratton Oakmont

Total losses to investors: $200 million

If this name sounds familiar, it’s because Stratton Oakmont was the brainchild of Jordan Belfort, the erstwhile “Wolf of Wall Street.” Operating as a classic “pump-and-dump” scheme, Belfort and his accomplices would cold call unsuspecting consumers and convince them to buy penny stocks, driving up the price until Belfort’s own firm could cash out and send the stock plummeting back to bottom.

After a wild ride through the 1990s, the firm and its principals were indicted for securities fraud by the SEC in 1999.

Lesson learned: Don’t buy stocks because someone told you so, especially not a random person on the other end of the phone; do your own research and draw your own conclusions. If that’s not a process that appeals to you, buy passive index funds instead.

 

These gargantuan frauds are the ultimate example of the cardinal rule of investing: “caveat emptor,” or buyer beware. It pays to do your diligence on big investment opportunities, but consumers also experience millions of minor instances of “fraud” every day, from overdraft charges and other hidden fees to getting overcharged by your cable company.

Trim can help you find dubious charges and get your money back — give us a whirl here.

 

How Elizabeth Warren Took Down the CEO of Wells Fargo, And Why It Matters

The CEO

On paper, John Stumpf was one of the last folks you’d expect to end up running the biggest bank in America. He grew up as one of eleven children on a poultry and dairy farm in Minnesota, sharing a single bedroom with his brothers and waking up at 4:30am to pick eggs in the family henhouse. After graduating in the bottom half of his high school class, he worked as a breadmaker in a small-town bakery before gaining admission to a state university.

Stumpf started out in the world of retail banking at the very bottom of the ladder, working as a repo agent for a local institution, but he moved up fast. Six years later, he joined Northwestern National Bank, leading it on a string of acquisitions that culminated in a 1998 merger with Wells Fargo.

Throughout his early years in banking, Stumpf honed a plain-spoken mantra for growth that would come to define his career in ways both good and bad: “There are only three ways a company can growearn more business from current customers, attract more business from competitors, or buy other companies.”

This strategy seemed to work. In 2008, Wells Fargo’s acquisition of Wachovia would double its footprint, creating one of the largest banks in the world. By then, Stumpf was CEO, and counted luminaries like Warren Buffett among his friends and bridge partners; through his investment vehicle Berkshire Hathaway, Buffett would later become Wells Fargo’s largest shareholder.

Stumpf’s rise from farm boy to top executive is the stuff of the quintessential American Dream—and perhaps that’s one reason why his fall from grace has taken on such a Shakespearean quality. On October 12, 2016, John Stumpf resigned as CEO of Wells Fargo. The end of his career roughly coincided with the end of Wells Fargo’s reign as the most valuable bank in America by market capitalization, a three-year run which had screeched to an abrupt halt less than a month before.

In different ways, both of these outcomes were catalyzed by one woman who shared his middle-class roots but took a very different path: Elizabeth Warren, a Harvard Law School professor and the senior U.S. Senator for Massachusetts.

The Senator

Some people may not know that Elizabeth Warren is one of the top five cited law professors of all time in her field of specialization—bankruptcy. Beyond her recent appeal as a popular senatorial standard-bearer for progressive social policies, it’s safe to say she knows a thing or two about how badly things can go wrong if consumers aren’t protected.

In 2007, then-professor Warren proposed the Consumer Financial Protection Bureau in a paper entitled “If It’s Good Enough for Microwaves, It’s Good Enough for Mortgages.” The agency was conceived as an analogue to other regulatory bodies like the Federal Trade Commission, but with a focus on protecting Americans in their everyday dealings with the financial institutions that issue their credit cards and underwrite their mortgages and student loans.

As the scale of the damage wrought by subprime mortgages made itself known, culminating in the financial crisis and the Great Recession, Warren’s proposal took on a new resonance. In 2010, the CFPB was officially brought into being by the Dodd-Frank Act, with the mission of protecting consumers from “unfair, deceptive or abusive practices” and “taking action against companies that break the law.”

Warren was supposed to lead the new regulatory body, but Republicans blocked the nomination, fearing that she would be too litigious; President Obama nominated the former Attorney General of Ohio, Richard Cordray, instead.

Instead, Warren ran for the Senate in 2012 on a wave of support from Democratic lawmakers, defeating the Republican incumbent Scott Brown to regain Ted Kennedy’s old Senate seat.

Now, Senator Warren was in a position to put her consumer advocacy chops into practice. Her years in the legal world and in politics would culminate four years after her election, when she found herself face-to-face with John Stumpf at a Capitol Hill hearing on September 20th, ready to take him to task for the largest bank fraud in the post-financial crisis era.

The Scam

What the heck was going on at Wells Fargo?

It turned out that the bank’s rosy growth had disguised a silent plague: over the past several years, more than five thousand Wells Fargo employees perpetrated what can only be described as a gigantic scam against their own retail banking customers, signing them up for fee-generating accounts without their permission or knowledge.

These employees went so far as to create phony emails and PINs to register new accounts for their customers, transferring money to the new accounts without permission. Already derided for their lack of transparency, “normal” bank fees were bad enough—and now Wells Fargo customers were paying even more for services they never wanted in the first place.

Did thousands of line employees independently decide to swindle their customers? Far from it: Wells Fargo relentlessly incentivized its staff to push additional financial products, or “solutions,” on existing customers.

The bank imposed strict daily sales quotas on employees, and established a sales target mandating that each Wells Fargo customer should have eight separate accounts with the bank. The rationale for this goal? As expressed in Wells Fargo’s 2010 Annual Report, it was because “eight rhymes with great.”

And for a time, things were great. This practice was enthusiastically and euphemistically described by Stumpf as “cross-selling” on the quarterly earnings calls that saw Wells Fargo stock soar over the past five years. The first pillar of Stumpf’s growth philosophy was largely responsible for Wells Fargo pulling ahead of its peers: the bank’s industry-topping cross-sell rate was lauded in the analyst reports that catapulted the bank’s market capand Stumpf’s stock-based compensationto new heights.

The Downfall

That is, until the Consumer Financial Protection Bureau (CFPB) announced a record-shattering $185 million settlement with Wells Fargo on September 8th, 2016, including a $100 million fine and full restitution for consumers who paid fees for financial products and accounts they never wanted.

This settlement was the culmination of an investigation that began in 2013 with an expose by the Los Angeles Times. In their complaint, the CFPB estimated that more than 1.5 million fake deposit accounts had been created for Wells Fargo customers, incurring more than $2 million in unauthorized fees, along with more than half a million fake credit card applications. In addition to the excess fees, victims of the scheme suffered damage to their credit scores.

In a day, Wells Fargo’s reputation as a tightly-run ship, a profitable investment and one of the “cleanest banks around” took a dramatic hit. As the bank’s stock began to dip, Warren Buffet, the largest shareholder, lost more than a billion dollars.

Without the watchful gaze and punitive action of the Consumer Financial Protection Bureau, it’s unclear how long it would have taken for a regulatory body to step in and investigate the allegations levied against Wells Fargo. Senator Warren’s new institution clearly demonstrated its willingness to make big moves in protecting consumers against “unfair or deceptive practices.”

But the fine wasn’t the end of the story for Wells Fargo or its leadership. On September 20th, Stumpf was summoned to testify in front of the Senate Banking Committee, facing down a bipartisan group of senators united in their ire against the culture and incentive structures that engendered fraud at such a massive scale.

And then Senator Warren took her turn at the microphone. What followed was a takedown of legendary proportions. Brushing aside the excuse that fake accounts were perpetrated by a few (thousand) bad eggs within the company, Warren asked why no senior leaders at Wells Fargo, including Stumpf, had been punished or returned their personal earnings in light of the scam. He didn’t have an answer.

After taking Stumpf to task for “gutless leadership,” Senator Warren closed with this statement: “The only way that Wall Street will change is if executives face jail time when they preside over massive frauds. We need tough new laws to hold corporate executives personally accountable and we need tough prosecutors who have the courage to go after people at the top.”

Stumpf didn’t resign right then, but the damage was done: Warren’s barrage went viral on social media. After a second Congressional hearing that went no better than the first — in which lawmakers called Wells Fargo a “criminal enterprise” and compared it to Enron — the calls for Stumpf’s resignation grew louder, until he finally heeded them on October 12th.

Why This Matters

Financial institutions have scammed their customers in the past. The most notable and recent example is the 2007-2008 financial crisis, which stemmed from a large-scale victimization of uneducated consumers who were saddled with home loans that they couldn’t afford. Despite the scale of the carnage, very few executives resigned, none went to jail, and most CEOs of banks that survived are still leading those institutions today.

Responsibility is easy to share in good times, but becomes a slippery concept when things are going south. You could make the argument, as John Stumpf attempted to, that Wells Fargo’s leadership wasn’t directly responsible for creating fraudulent bank accounts, and that the blame lay primarily with “overzealous” employees who did the clicking.

But the culture Stumpf created, as CEO, had a far larger impact on the well-being of his customers than if he had been banging the keyboard to create fake accounts himself. 

It may be fair to assume that Stumpf truly meant well with his imperative to cross-sell, but ignorance of the negative externalities of a strategy is no excuse. Stumpf’s inability to take immediate responsibility, to show with deeds instead of words that the buck stopped with him, ultimately doomed him. With her uncompromising repudiation of Stumpf’s negligence — and by championing the CFPB, long before her senatorial career began — Elizabeth Warren has ensured that CEOs of financial institutions everywhere will look a little closer at the risks their business plans pose to consumers, even when their stock is soaring.

Thanks to Senator Warren and the rise and fall of John Stumpf, leaders of financial institutions are painfully aware that there are consequences at the top for deceptive practices, which means that Americans can rest a little easier.

Infographic: The Wide World of Banking Fees

How do banks make money from consumers? Surprise, surprise: it turns out that miscellaneous fees are a massive revenue driver for the retail banking industry. Overdraft fees alone constituted a whopping 8% of total net income in 2015—at least for big banks with over $1 billion in deposits, which are required to disclose their sources of revenue to the Consumer Financial Protection Bureau.

Overdraft and ATM fees are the worst offenders by sheer volume, but banks subject their customers to tons of other fees. No one’s saying that banks aren’t entitled to make a buck, but some of these fees seem questionable, to say the least. We made an infographic to break down all the ways your bank can charge you:

110716_WideWorldBankingFees_v2

There are ongoing discussions at the Consumer Financial Protection Bureau about whether regulators should cap these fees. We would applaud that kind of change, but for now, when it comes to overdraft fees, Trim can help get your money back. Sign up for Trim to monitor your spending and put ridiculous fees back in your pocket.

What President Trump Means For Your Money: 5 Key Takeaways

Early this morning, we joined the ranks of Americans who were surprised — to say the least — by Donald Trump’s victory over Hillary Clinton in the presidential election. Whether you love or hate the president-elect, it’s impossible to ignore the fact that his proposals, such as they exist, will have substantial ramifications on the U.S. economy both in the short and long term.

If you’re wondering what this stunning development portends for your money, we’ve got some advice on managing your finances in the era of President-elect Trump. Here are five tips from our team:

  1. Don’t make any sudden moves

American financial markets went on a wild ride in after-hours trading last night, with Dow Jones futures falling more than 800 points as Clinton’s softness in key swing states became apparent. The global markets echoed this uncertainty, with key Asian benchmarks seesawing as traders awoke to a Trump win. It’s clear from the reaction that investors around the world expected a Clinton victory, and if there’s one thing the markets hate, it’s unpredictability.

For the moment, U.S. equities seem to have bounced back close to pre-election levels, but one thing is clear: the markets will be incredibly volatile over the next few months. This is because we don’t know which of President-elect Trump’s many campaign promises will actually be enacted; some of them are pro-growth, like infrastructure spending, and some could be disastrous, like imposing broad trade tariffs. We also don’t know much about the executive team he will assemble, notably the Secretary of the Treasury, who will play a key role in defining the Trump administration’s fiscal policy.

Timing the market is incredibly difficult, even for professionals. We suggest that either selling or buying assets on the basis of the immediate election result is premature. Neither panic nor elation is a good strategy. You should sit out the short-term madness and stick to your long-term investment plan.

  1. Interest rates will probably stay low

Given the volatility that has only just begun to rear its head, the interest rate rise which the Fed had teased for December will probably not happen. The next opportunity for rates to rise is March 2017. That said, if the market settles, the Fed may still push rates up a quarter of a percent as planned. For now, we’d say that if the prospect of rising interest rates was a factor spurring any personal financial decisions, like refinancing your mortgage, you can rest easy and take your time for now.

  1. Explore your options for health insurance

It’s unclear whether President Trump will carry out his long-voiced threat to dismantle Obamacare and replace it with “something way better,” but with a Republican Senate and House on his side, as well as the looming prospect of a conservative Supreme Court, a successful challenge to the Affordable Care Act is well within the realm of plausibility. If you are currently on an Obamacare plan, start looking for alternatives: through your spouse or your parents if you’re under 26, or by placing a premium on employer benefits in the job hunt.

If you have an HSA or other medical savings account, it might be wise to max out your contribution to ensure sure your health needs are covered.

  1. Personal taxes are likely to go down

With full Republican control of Congress, President Trump will likely push through a package of across-the-board tax cuts. This could be detrimental to the economy in the long-term as the deficit increases and our national debt continues to mount, but in the short-term, it will increase household consumption and create growth.

Another likely change is the repeal of the estate tax: under the current laws, you pay 40% on the excess value of any estate worth more than $5.45 million.

Finally, with corporate taxes being reduced to a flat 15% for all businesses under Trump’s tax plan — including sole proprietorships and S Corporations — independent contractors are going to be in great shape, tax-wise. Top wage earners could go from a marginal tax rate of close to 40% under the current tax scheme to paying a mere 15% as contractors under the Trump tax plan. This could have a tremendous impact on the “gig economy,” making it a far more appealing proposition to work for Uber or Instacart.

  1. We repeat: volatility is the new normal

This is probably not the best time to take any major risks with your finances. Again, we’re not sure about the ultimate financial implications of a Trump presidency, and this is precisely why it’s a good idea to batten down the hatches. It would be wise to put off major discretionary purchases for the time being. Make sure your emergency fund is fully stocked and cut down on unnecessary consumption.

These basic rules of personal finance apply even more strongly when unpredictability reigns; a little prudence will ensure that you make it through the next four years in great shape, no matter what President Trump has in store.

7 Lessons from The Richest Man in Babylon

The Trim blog is pretty great, but we want to help you discover other awesome sources of personal finance wisdom. This is the first entry in a series that brings you key lessons from classic books about personal finance.

Written in 1926 by George Samuel Clason — and currently available on Kindle for $1.99 — The Richest Man In Babylon is the original guide to personal finance. And unlike the dry textbooks that are published in droves these days, it tells a great story.

The Richest Man In Babylon is structured as a series of parables set in ancient Babylon, centered around the story of two friends who set out on a mission to ask their wealthy former classmate just how he got so rich.

We love this book because it provides powerful lessons of personal finance in a simple, entertaining way. Here are seven of our favorite pieces of timeless wisdom from the book:

  1. “Start thy purse to fattening”

This is the big one: don’t spend all the money you make and pay yourself first! The rich old man in the book recommends that you “save one piece of gold for every ten you earn.” It’s a little easier than putting gold under your mattress these days, of course; there are tons of services that auto-transfer money from your checking to savings account, helping you save ten percent of your income a few dollars at a time.

  1. “Control thy expenditures”

The best way to make sure you have an extra “piece of gold” to save is to not spend it in the first place! You can use Trim to cancel old subscriptions, fight overdraft fees and earn back money to save.

  1. “Make thy gold multiply”

In a word: invest! The market has been volatile lately, but instead of buying individual stocks, you can’t go wrong by putting your money in a passive index fund that tracks the overall stock market. Vanguard has a few great options.

  1. “Guard thy treasures against loss”

A simple one at heart but not always easy to put into practice: don’t be a sucker! Avoid making risky loans or investing in pie-in-the-sky ventures that you don’t understand.

  1. “Make of thy dwelling a profitable investment”

This piece of advice suggests that you should invest in your own home as soon as possible, instead of paying a landlord. We’d say that the rent vs. buy decision depends on where you live and your lifestyle and financial goals — but given the existence of big tax breaks for homebuyers and low interest rates, we’re inclined to agree.

  1. “Insure a future income”

Some of the most important words of wisdom on the list: make sure to save up for retirement! We think that rather than investing in risky mutual funds, buying a set of passive index funds is the way to go. If you have a family, buying life insurance is important, too.

  1. “Increase thy ability to earn”

Possibly the most non-intuitive but crucial piece of advice from the rich old man in Babylon: improve yourself and you’ll improve your earning potential. Set concrete goals, pay your debts promptly, pursue education and deal with folks honestly, and you’ll massively amplify your financial — and personal — success.

We think that following these principles is a great start to achieving financial success, and we want to help. Sign up for Trim to cancel subscriptions, fight fees and get money back.

Why Companies Love Selling You Subscriptions

Introduction

Here’s a trend you’ve probably noticed — in all likelihood, it’s the reason that you clicked this link and made it here to the Trim blog. The trend is simple: as consumers, we are living in the most subscription-saturated era in American history.

The average Trim user who signed up for our service within the past 90 days has 6.0 subscriptions on their credit card, not including utilities and payments to financial institutions (like student loan servicers). It’s hard to find historical records on the popularity of subscriptions with the U.S. population, but we do know that in the 90 day period that started exactly a year ago, the average new Trim user only had 5.4 subscriptions.

Imperfect data aside, we’ve heard qualitatively from hundreds of users who are drowning in more subscriptions than ever before. The movement even has its own name: try Googling “subscription economy” or “digital membership economy.”

But why is this the case? It turns out that there are several reasons why consumer businesses have followed the lead of their enterprise counterparts in pivoting to recurring revenue business models. Some of these factors reflect the changing nature of consumer consumption in a digital world; others smack of “revenue optimization” at customer expense, literally.

Read on for the top five reasons that consumer businesses love selling subscriptions:

  1. Predictable Revenue

There’s nothing that the finance department at a major corporation loves more than recurring revenue. With less fluctuation in the month-to-month take of the business, companies have a far more stable platform to make decisions, from hiring to inventory.

These factors alone make it extremely tempting for consumer-oriented businesses to move to subscription pricing, even if it’s not necessarily an intuitive choice for the consumer.  

  1. Increased Switching Cost

Subscriptions are hard to cancel and that’s a fact. How many times have you remembered a “free trial” way past its expiration date and rushed over to the computer, clicking through 15 menus only to find that you need to “phone a representative” to cancel?

Many companies, including otherwise reputable services like the New York Times, deliberately make it difficult to cancel your subscription in the hope that it’s just too much work. This is the whole reason we started Trim: there is literally zero benefit to the consumer in making cancellation difficult and it needs to stop.

  1. Lower Barrier to Upsell

From a business’s point of view, one of the best side effects of having your credit card on file is that they can easily sell you new things. Maybe your monthly craft beer club crate wants to convince you to switch a more expensive selection — it’s as easy as convincing you to click a button and boom, ten more bucks a month.

  1. The Internet Makes Anything Easy to Subscribe

Ten years ago, the thought of subscribing to a physical product like razor blades would have been very strange. But the Internet has made it far easier to manage the nuts and bolts of a subscription business, from customer management to shipping. There are even companies that exist to make it easy for anyone to make a subscription box that they can sell to others.

  1. Subscriptions Are More Profitable

The lifetime value — which is a fancy phrase for total profit — of subscription customers is greater than customers who buy a product or service one at a time, when they need it. This is due to a combination of the reasons above, and it is the single biggest reason why consumer businesses will stop at nothing to become part of the subscription economy.

The Bottom Line

To be fair, subscriptions aren’t always bad for the consumer — they add a layer of convenience and seamlessness to products and services that you know you’ll need.

As the winners of our most loved subscriptions ranking show, the key to a great subscription business lies in delivering true value to customers. Companies that force subscriptions on their customers simply because it’s “better for business” are doomed to fail. These consumers will find different options, and we can’t wait to help.

Check out your subscriptions — and cancel the crappy ones — by signing up for Trim.