Many years ago I saw a TV commercial for an investment bank that showed what the price of a Rolex watch or sports car would do to your retirement, simply by imagining what would happen if you took the purchase price and invested it in your IRA or 401K instead. Those luxuries may be nice, but in the real world their price exceeds what they're listed for, simply because of time.
That idea was gestating in my head one afternoon when a rental car salesman was trying to talk me into paying an extra $11 per day for insurance. Someone had rear-ended my car at a stop-light a day earlier, and their insurance company was giving me a rental car while mine was in the shop being repaired. It occurred to me that I didn't really need that extra insurance because my existing insurance would also cover the rental. Now there was a minor benefit: if I got into another accident it wouldn't impact me, but not only were the chances of another accident slim, I didn't know if the cost would be worth it at all because I didn't have an easy way of calculating it.
It turned out that the other guy's insurance company spent over three weeks getting my car repaired because they kept ordering the wrong replacement parts (overriding the body shop's recommendation because they wanted to complete the repairs for less). At $11 per day, that extra insurance would have cost me at least $231 for a "free" rental.
When my car was finally repaired, I took that $231 and put it into a savings account that was earning 5% at the time. After only 5 years, that has turned into $296.46. In other words, those three weeks worth of rental insurance would have paid for over four months of my own car insurance.
Something clicked in my head--it's not just one-time expenses that matter, expenses over time matter--and that's how Spent Better was born.
Spent Better was created to make it easy to figure out what something will cost you for real, instantaneously, and with minimal fuss. The only thing you have to do to use Spent Better is to take out your phone and tap-in how much money you're thinking of spending, and Spent Better will show you what it would grow to, what it could empower you to buy, and dozens of different ways you could spend the same money on better things. Let me show you:
Just tap next to the dollar sign (which changes to your local currency if you're not in the United States) then tap how much you're about to spend.
At any time you can also tap on one of the buttons above it to see what would happen if you spend that much once, daily, weekly, monthly or yearly.
That's it. That's all you have to do. Everything else is automatic.
When you've finished tapping in the number, the top of the screen will instantly fill with the results of dozens of calculations, like this:
$11 per day. You might spend that much on coffee, lunch and sodas without even thinking.
$11 per day would turn into nearly 280 thousand dollars if you plan to retrire 30 years from now, and expect a very modest return of 5%.
$11 per day, even if you stuffed it under the mattress, after only two years it's grown to over 8 thousand dollars..
$11 per day invested in an Index Fund, such as SPDR, Diamonds, or the Vanguard 500, would have grown into a cash pile big enough to buy a nice car.
$11 per day would buy 2-and-a-half Grande Cappuccino's from Starbucks every day.
$11 per day could vaccinnate over 78 children in Africa and India against Polio, every day.
$11 per day will keep you amused in style, with enough movie tickets to take yourself and a date out to the movies more than four nights a week.
$11 per day can buy you McDonalds or Burger King, with all the extras, every night.
$11 per day can pay for a five-star rated treadmill from Amazon.com after only 4 months, so you can burn off all those calories you had been wolfing down at the Drive-Thru.
Spent Better will be in the iPhone App Store in about a month for only $1.99--less than half the price of a Grande Cappuccino at Starbucks. It will feature dozens of accurate, field-tested financial calculators that will show you the value of a dollar (or Euro, or Pound) that is better spent on things that matter to you.
Plus, you can customize any of Spent Better's calculators just by tapping on the results. We've stocked this app with national averages for interest rates, prices and terms to provide realistic results, but you can adjust any of them to reflect what your bank, credit card, or store has quoted you. All you have to do is tap:
With a few taps you can tell Spent Better what kind of return you're getting on your investments, or how much a cup of coffee costs at your local shop, or how many years will pass before your children go to University and need that college fund you've been putting money into.
This is what I was thinking of that day when I was trying to figure out what a mealsy $11 per day was really worth. Soon it will be in your hands.