Building wealth requires both offense and defense. When playing defense, I’m in favor of cutting the expenses that cause no pain. Today we’ll take a quick look at your cable and internet bill. You may not fully appreciate how important it is to make a change – even reducing your bill $10 a month will save $1,520 a decade.
The cable TV part is easy. Cancel it. You’re probably not watching that much TV in the first place since you live in the office. And what you are watching is available to consume in ways that are far cheaper than a cable TV package. I can see no reason to keep cable TV. Try to convince me otherwise in the comments.
To replace your cable TV, you’ll need a Roku or Apple TV. I’m partial to the Apple ecosystem, but have heard great things about the Roku. From there, you’ll probably want a subscription to Netflix. If you’re missing other premium channels, consider an HBO subscription or a Sling TV package. I find neither of those necessary, but it’s nice to have options. You could also buy shows on Amazon or Apple, but why do that when you watch them for free through the New York Public Library? Between it and Netflix, I find I have plenty of content to keep me happy. After several years of letting go of cable, I can’t think of anything I miss watching.
For your Internet connection, the first thing to trim is the cable modem. If you don’t own your modem, you’re renting one from Time Warner or Comcast. The rented modem is usually low quality and responsible for plenty of your Internet troubles and expensive. Time Warner charges $8 a month ($1,216 a decade) to lease a modem. Note that the modem is distinct from the router. I have a separate router that creates the apartment’s WiFi network.
I decided to buy my own cable modem and ended up with the Arris Surfboard SB6183. It can handle download speeds up to 686 Mbps, which means it should be good for many years. I haven’t had a single problem since I’ve owned it. I can take it with me whenever I move. I’ve long since paid for the purchase of the modem itself (which seems to have a high resale value should I ever need to get rid of it). So now, I’m saving $8 a month ($1,216 a decade) by not paying for the modem rental.
Time Warner in NYC offers blazingly fast internet in NYC. Unless you’re a gamer, the speeds are probably much faster than you need. Currently you can get download speeds up to 300MB. A partner once told me that he bumped up the Internet at home to the highest speed setting to improve his efficiency at working from home. At the time it made sense to me, but digging a little deeper I realized I had no need for such high speeds. The partner had bought into the fallacy that faster is better.
The FFC considers download speeds of 10MB to 25MB reasonable for streaming video. Heavy users might want up to 50MB of speed. I’ve been slowly reducing my Internet speed by downgrading plans once a month. I’ve saved $10 a month each step of the way as I moved from 300MB to 200MB to my current plan of 100MB. I’ve noticed no major difference at home, so can already confirm I’ve paid $100s of extra dollars to Time Warner over the years. I may further reduce the speed to 50MB at some point, although I’m currently happy with the $44.99 per month bill ($6,838 per decade).
If you use your Roku or Apple TV via an ethernet cord, one thing to keep in mind is that the ethernet ports in both only handle speeds up to 100MB anyway. If your Internet speed is faster than 100MB, you’re not seeing any of that benefit in those streaming devices.
Joshua Holt is a former private equity M&A lawyer and the creator of Biglaw Investor. Josh couldn’t find a place where lawyers were talking about money, so he created it himself. He spends 10 minutes a month on Empower keeping track of his money and is always negotiating better student loan refinancing bonuses for readers of the site.