I like to read a lot of James Altucher. He writes books, blogs, quora answers, and he’s also a multi-million-dollar hedge-fund manager (or at least he used to be). He lives a minimalist lifestyle. Everything he owns fits in a duffle bag (read/listen about it here: http://www.jamesaltucher.com/minimalism/ ). I’d love to live like that, but I also love my house. I’m a semi-minimalist. But I’m also married and have 2 kids… so I have a lot of crap at my house.
It gets tricky when you try to think about the things that you MUST have. I’m not talking about wants, desires, covets, I’m talking about the stuff you need to survive. You must have food, clothing, and shelter – those are the basic human needs. What else must you have?
For me, I must have a way to communicate with others. So that’s a cell phone and an internet connection. For you that might be a land line and a newspaper subscription. Maybe it’s cable for you, I like cable – it’s not a MUST for me, but I like watching football and How I Met Your Mother reruns.
I also must have a way to travel. I work a 9-5 that’s about 12 miles from my house. I need a way to get there since there isn’t a bus service within walking distance from my house. So I own a car. Technically, I own 2 since my wife also works. You could get by with a bus pass, or a subway token; but I believe I MUST have a car. (Notice that I didn’t say I MUST have a BMW 750i, just a running vehicle that gets me to work and has room for 2 car seats).
Within my house, I’ll need electricity, natural gas, water, sewer access, and trash removal. Those are things that I believe I MUST have. Maybe you don’t need showers (you do, you reek… trust me), but I need showers – and so do my kids after they eat sweet potatoes from a high chair and 2 of the 4 oz end up under the bib and under the shirt (how does that even happen?).
I know what you’re thinking. “Duh, Jeff – everyone already knows all this crap.” Here’s what you don’t know, you MUST have those things, but you don’t have to pay what you’re paying for them.
"You MUST have these things, but you don't have to pay what you're paying for them"
This is a summarized list of tactics I’ve gathered over the years about negotiating. I’ve applied them a couple of times and I know that they work.
First off, you need to make a list of the expenses you’ve determined to be “MUSTs”. I don’t care what they are, if you MUST have a 2017 Ford F-150 then go for it. If you MUST have a premium movie subscription added to your cable bill, then add it on. I’m not going to tell you what you must have and what you should cut back on. Here’s my favorite quote from Ramit Sethi, “I don’t believe in lecturing you about saving $3 on lattés.” I’m behind him 100% on that – if you MUST have coffee, then go buy it.
Now that you have your list of MUSTs, I want you to circle the ones that are not contracted already. For example, if you’ve already bought that F-150 we’ll talk about it later. If you’ve already bought the house, we’ll talk about it later. For now I want to focus on 3 main bills that are eating up your money: cable, cell phone, credit cards debt. They all work the same way when you make your first negotiation call.
As a disclaimer, I didn’t make any of this up – I borrowed it all from various negotiators including Ramit, Dave Ramsey, and even a hostage negotiator from the FBI. Here are the tricks:
I know he’s polarizing, but in the Art of the Deal, Donald Trump says to make your first offer 3x bigger than what you’ll actually take.
If you’ll actually take 10% off, make your first offer 30%.
I’m not sure if that works at all, but that’s the advice of a billionaire.
Try this out and let me know if it works. Worst-case scenario, you’re in the same situation tomorrow as you’re in today.