“You control the debt; you control everything. You find this upsetting, yes? But this is the very essence of the banking industry, to make us all, whether we be nations or individuals, slaves to debt.” – Actor Luca Giorgio Barbareschi as arms producer, Umberto Calvini, The International.

In the days of ole, one could buy a treadmill or an exercise bike and work out or employ it as a glorified laundry rack.

Now we have the recent Peloton IPO — (NASDAQ: PTON) — selling its bikes for $1,995 and treadmills for $4,000.

The key differentiator is streaming content (bike or aerobic instructor videos) for a recurring monthly charge of $39 or more. Peloton didn’t just sell a pricey bike and/or treadmill, they more importantly marketed a monthly obligation to a growing subscriber base … and that very well could include you.

The consumer bought high, and is paying even higher.

The stately The Economist reported the news and entertainment industry (i.e., Disney, Fox, ESPN, HBO …) along with major tech players (i.e., Apple, Amazon, Netflix) collectively spent $650 billion in the last five years on acquisitions and content, a sum greater than America’s oil industry.

For example the Mickey Mouse gang just unveiled Disney+ for only $6.99 per month (how long will that price last?), allowing binge watching of the Star Wars catalog to one heart’s content. The downside is another sliver of your financial independence given away for yet another monthly fee.

Sooner or later, the price of each kernel of streaming popcorn is going to add up.

They Have The Gravy, And You’re On The Train

During his Silicon Valley days, Almost DailyBrett was consumed by a litany of recurring payments (i.e., mortgage, utilities, taxes, insurance, car payments, credit card usage, mobile phones, cable, house cleaner, gym membership, pool maintenance, gardener …). In toto, all of these outstretched hands each month represented a seemingly out-of-control first-world dilemma on steroids.

Money was coming in, and going out just as quick each month. Similar to the IRS, each of the growing list of providers never forgot to remind your author of his annual/monthly obligations.

Even more than ever, our consumer-oriented economy (70 percent of the total) is predicated on enticing even more Americans to shell out an escalating amount of capital on a monthly basis, ensuring a consistent flow of money in one direction.

Hint: Someone is getting rich and it’s not the average Jane or Joe.

Some can avoid being “slaves to debt” to the bank (e.g., pay off your credit cards each month), but it’s way more difficult to avoid recurring annual (e.g., Amazon Prime or Costco memberships) and worse, monthly payments.

Let’s face it, some monthly outlays are unavoidable (e.g., utility payments). Most have mortgages or rent to pay every 30 days. Many have car payments. Even if you pay your total credit card bill religiously (which you should), it’s still a monthly obligation.

Almost DailyBrett doesn’t want to sound like a parent, but still must pose this question: How many of these recurring payments are absolutely necessary?

Shelter, food, power and water are essential to life. Most likely all or at least some of the above are financed/amortized through monthly payments.

Your author must ask, do we need a Netflix subscription on top of the cable bundle? We are already paying up the Wazzoo for up to and beyond 300 channels, the vast of majority we do not watch … and then we add on Disney+, ESPN+, Netflix and God knows what else.

And we are wondering what is happening to our money?

No Longer Driving The Top Line, How About The Bottom Line?

Follicly challenged Baby Boomers (born 1946-1964) and others of the species are retiring … and Gen Xers (hatched 1965-1979) are not far behind.

Let’s face it, for most Boomers their peak earnings days are behind them.

If you can’t grow the top line, then reducing the bottom line is a great idea. Can one seriously reduce costs and still live a comfortable happy life?

Do you still require a mortgage? Can you downsize? Can you rent instead? Can you move to a lower-cost state or community?

Is good weather (e.g., California) worth the mounting hassles, congestion, rising costs and always higher taxes?

Can you avoid car payments? How about fixing up your ride?

And most of all, can you build a stone wall preventing new monthly payments from wrecking your budget?

If you must binge watch, is there a free way to enjoy the same content without the monthly ball and chain?

Retirement experts preach avoiding second (or more) homes, subsidizing adult children and overspending.

At some point, that one more monthly expense may prove to be A Bridge Too Far.

https://www.economist.com/leaders/2019/11/14/who-will-win-the-media-wars