I have nothing against Amazon. I love Amazon. It’s awesome to order stuff from home and avoid going shopping IRL. Every guy hates shopping so we love Amazon by default. Amazon saves time and usually it’s a pretty good bargain. However, I’m not joining Amazon Prime. Amazon is already a great service and I don’t think anyone really needs Amazon Prime. It’s a frivolous purchase. Today, we’ll go through the benefits of Amazon Prime and I’ll tell you why I’m not joining anytime soon.
Amazon Prime benefits
Amazon Prime is a membership service with quite a few benefits. Currently, Amazon Prime costs $99 per year. To me, free 2 day shipping is the best feature of Amazon Prime, but let’s go through a few other benefits as well.
- Free 2 day shipping – Most items on Amazon are eligible for free 2 day shipping. This is a great benefit if you need an item quickly.
- Same-Day delivery in eligible areas – This is available in many cities when your order is over $35. Even quicker delivery!
- Music – Members can stream over 2 million songs ad-free. This sounds like a cool service especially if you have one of those Amazon Echo doohickeys. You can unlock more music with Amazon Music Unlimited (a separate membership program.)
- Movies and TV shows – This one sounds good if you watch a lot of TV.
- Ebooks – Subscribers can access many ebooks in Amazon’s library.
- Early access to Lighting Deals – I guess this one is good if you like to shop lighting deals.
These benefits are pretty nice, but I’m not convinced yet. It’s not quite the right fit for the RB40 family.
Why I don’t like Amazon Prime
First of all, I detest subscription fees. Any membership fee increases our monthly expense. We are pursuing financial independence and our FI ratio* will head the wrong way with more subscription fees. Some will say that $99 isn’t that much, but early retirees need to think of it in terms of passive income. To generate $99 per year, we’d need to invest $5,000 in VIG, Vanguard Dividend Appreciation ETF. That’s not trivial for someone looking to retire early. The only subscription fee I’m willing to pay for is a gym membership. Better health is worth the price.
*FI ratio = passive income / expense
Free shipping – I hope you know that free shipping isn’t really free. The cost of shipping is either folded into the price or investors are footing the bill. Consumer should expect to pay more if Amazon wipes out Walmart, Target, and other competitors. I’m quite happy with the $25 minimum to get 5-8 business day free shipping.
One of the best strategies for minimizing buyer’s remorse is to delay the purchase. The $25 free shipping minimum helps with this. A $20 electric kettle has been in my Amazon shopping cart for about a week. I want it, but it’s not necessary. It’s perfectly fine in the shopping cart for a while longer. I find that I delete things out of the shopping cart pretty often. Many times it ends up that I don’t really need that thing anymore or I found something even better. Delayed gratification is a great strategy that everyone should adopt. If I had Amazon Prime, I’d probably hit the purchase button much more frequently.
Music, movies, tv shows, and ebooks – These entertainment benefits are actually pretty cool. However, I don’t have a lot of time to be entertained. I’m busy with blogging and being a stay at home dad. Also, I can get almost anything I want from our awesome library. I’d rather give $99 to the library than spend in on the Amazon Prime membership. This is a neat benefit that doesn’t really do much for me. Maybe this would be a good option when we’re retired in Hawaii and don’t have much to do. Except I’m sure Mrs. RB40 will think up plenty of activities to keep us busy.
Early access to lighting deals – This is just another way to spend more money. I only shop when I need something. The more you look at “deals”, the more stuff you’re going to buy. Lighting deal shoppers spend money, not save money. Looking at deals is just too tempting.
The fact is Amazon Prime members spend more – roughly double the amount of non-members. My goal is not to spend more, it’s to invest more and become financially independent. These are the reasons why I’m not joining Amazon Prime.
What about you? Are you an Amazon Prime member?
Oh wow, a lot of people love Amazon Prime. The comments are pretty amazing. Amazon Prime still isn’t the right fit for us at this time, but I’ll keep that option open for the future. You can try Amazon Prime with their free 30-day trial (students get 6 months free.)
*Disclosure: This is an affiliate link and we may receive a referral fee if you buy something from Amazon. I figure I’ll throw this link in here because Amazon Prime seems to work really well for a lot of people.
My Amazon purchases
This is a short extra section to share what I purchased from Amazon this year. It looks like I buy from them about once per month. That’s pretty often. Let’s check out my purchases and see what I think of my purchases now.
- LEGO Star Wars – Wookiee Gunship and Imperial Assault Hovertank. These were birthday gifts for RB40Jr. Good purchase.
- Optimum Nutrition Creatine Powder – $15 for 600 g. This was a great buy. Creatine helped me work out better and I haven’t used up the bottle yet. Great purchase.
- Optimum Nutrition Gold Standard Whey Protein Powder – $58 for 5 lbs. The extra protein helps me build muscle and I also sneak a teaspoon in RB40Jr’s hot cocoa. I found that my gym has a sale every few months and it’s cheaper there, $50. Okay purchase.
- How to Fail at Almost Everything and Still Win Big by Scott Adams. I enjoyed this book and probably will regift this book to my brother on Christmas. Good purchase.
- Kirkland Cetrizine – $17 for 365 tablets. This was an awesome price. Great purchase especially during allergy season.
- Arctic MX-4 Thermal compound paste – My laptop was blowing a lot of hot air so I took it apart and replaced the thermal compound paste. It’s running cooler now. If your laptop is over 5 years old and running hot, you should get one of these. You can see how to replace the thermal paste on YouTube. Good purchase.
- Nordic Ware Bundt Pan – This was Mrs. RB40’s birthday present. It’s a bit too big, but it works pretty well. Good purchase, but she needs to use it more often. Maybe when the weather gets cooler. Good Purchase.
- Matfer Bourgeat 8 inch carbon steel pan – This $16 pan is way too tiny to cook anything in. I could cook one egg on it and that’s about it. Bad purchase! The Lodge 12 inch carbon pan is way better. I use that almost every day and it’s non-stick now after about a year. When it comes to pans, bigger is better.
- Winco Fish Spatula – This $5 spatula is pretty cool. However, I don’t use it very often. I found a cheap stainless steel flipper at the grocery store that is more solid. This one is good for more delicate work like flipping fish fillets… Okay purchase.
- Eclipse Glasses – I got two pairs of nicer eclipse glasses for our camping trip for $35. This is more expensive than the paper eclipse glasses, but it was worth it. These are way more comfortable and they fit RB40Jr much better. The next eclipse is coming up pretty soon – a Total Lunar Eclipse on Jan. 31, 2018. We won’t need an eclipse glasses for that one, though. Great purchase.
- Snorkeling stuff for our Waikiki trip – I got rashguards, inflatable snorkel vests, and a full face snorkel mask for Junior. We’re going to Waikiki next week! I can’t wait. The snorkel works well in the pool, but RB40Jr might not be able to snorkel in the ocean with all the waves. We’ll see how these work out.
All in all, I spent about $350 at Amazon in 8 months. That’s not too bad. The shopping experience is good and I’m mostly happy with my purchases. This level of purchase doesn’t really warrant an Amazon Prime membership. We’re fine without it.
Okay, it’s your turn to share your experience with Amazon and Amazon Prime. Do you like them, hate them, indifferent?
Image credit – Flickr dinomite
Passive income is the key to early retirement. This year, Joe is increasing his investment in real estate with CrowdStreet. He can invest in projects across the U.S. and diversify his real estate portfolio. There are many interesting projects available so sign up and check them out.
Joe also highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help DIY investors analyze their portfolio and plan for retirement.
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