How to Avoid Being a Sucker

A sucker is born every minute, and today that sucker happens to be username “Peninsula FOL.” See, PFOL was once the owner of the book you now hold in your hands and apparently didn’t understand its worth. Lesson #1: know what you and your possessions are worth – then add at least 22% as a negotiating starting point.

“Big Wolf and Little Wolf” happens to be just about the most coveted kid’s book in the world because it’s beautiful, endearing, and so perfectly speaks to human emotions, and also because of supply constraints. Lesson #2: prices rise when demand outstrips supply, a.k.a. a “seller’s market.”

So in a “seller’s market” with used book prices like $51.50 (, $74.50 (, $99.95 (, and $58.90 (, the sucker that is PFOL prices at … $25.[1] A hanging offer if I’ve ever seen one. This price was so low I wondered if I might, in fact, be the sucker. After brief consideration, I charged forward given’s credibility and my credit card’s fraud protection. Lesson #3: no financial opportunity is 100% certain (and anyone who talks of “easy” or “free” money is a charlatan or worse) – act swiftly when the expected reward outweighs the expected risk.[2] Lesson #4: whenever you can cheaply offload risk onto someone else without capping upside, do it, a.k.a. always buy with credit cards when possible.[3]

Now, maybe all this talk of suckers and charlatans and money is off-putting. Maybe you think the world needs more compassion and empathy. I wouldn’t disagree with that assessment. But I’ll also say that no teacher in this sometimes-cruel world is greater than pain. PFOL’s sucker-status will be shed far faster fueled by the regrettable realization that he could have, at minimum, doubled his revenues than it ever would be through an extra dose of generous understanding.

But understanding also has its place, no doubt. Like, poor PFOL was probably raised in a setting bereft of the lessons contained in this note. More importantly, PFOL almost certainly didn’t have the massive edges you enjoy. Namely, your parents who have passed you some elite genes to go along with what will surely be a top-notch environment of love, exploration, and support. So we don’t blame PFOL for his error, but we’d be doing a disservice to everyone involved by not capitalizing on it.

Of course, massive edges and all, it remains likely that you too will be a sucker (some of the time). That’s fine, because, really, what matters is living a fulfilling life, however you define fulfilling. And sucker or not, fulfillment is always on offer. Your lovely parents tilt the probabilities in your favor, which is nice, but you’ll still have to grapple with the mental challenges presented in “Big Wolf and Little Wolf.” While it will be your personal battle, that doesn’t mean you have to do it in isolation – always feel free to reach out if you need someone to talk with or someone to simply listen.[4]

I’ll leave you with a few other ways to avoid sucker-status:

  1. Never buy an individual stock or mutual fund. Buy index funds. VOO (US large cap), VXUS (International), VTI (Total US market).
  2. Whenever considering buying new, ask yourself if used wouldn’t get you everything you actually care about for less. (Overbearing advertising will make an honest assessment here extra hard.)
  3. If you are buying new, never buy a warranty. This is a racket that plays on irrational risk inflation. For the same reason, be wary of every type of insurance product.
  4. Do take advantage of sign-up bonuses/free trials as long as you (a) read the fine print and (b) set cancellation reminders if applicable. (If you do forget to cancel in time, call and explain the truth: It is entirely my fault that I received this charge. Is there any way you can help me out? That question, btw, works in all sorts of situations to uncover “hidden” deals. If you are on the phone with someone who sells you a service, ask that question.)
  5. Only in extenuating circumstances should you ever buy boxes. If recycling/reusing doesn’t satisfy your needs, go to a package store and ask for its perfectly-usable-about-to-be-trashed boxes.
  6. Online bank accounts without branches offer the best interest rates. Ally and Marcus are preeminent now. If you worry about needing to carry cash, there are online banks that offer fee-free ATMs worldwide (Schwab comes to mind).
  7. Remember that real estate is an investment and that there is no investment that only goes up. If you buy a house, you are placing your biggest bet that the real estate in your locality will outperform a diversified index fund. As mentioned before, “free money” does not exist (though solid execution of bonus offers comes close). (Also, to be technical, houses (a depreciating asset) never go up in value, land )
  8. Contrary to conventional wisdom, having loads of credit cards help your credit score. This of course assumes you don’t start spending more because you have more credit. The credit card bonus game is currently one of the best bonus games to master: you can legitimately fly around the world for “free.”
  9. That’s enough for now. Have a great life. Try to remember that your parents are awesome even when they don’t seem like it. Reach out if you need anything.

P.S. I tip my cap to you if you finish reading this and think Wait, why don’t I flip this book for a tidy profit? Such a thought puts you on pace to exceed your parents’ quite significant thinking capabilities.

[1] Lesson #1b: never price using round numbers because they give the impression of a mindless arbitrariness in a way that, say, $24.53 never does. “There must have been some serious calculation involved to arrive at $24.53,” your counterpart will reflexively think, and BOOM! you have an edge. On the flip side, when you come upon a round number, you can safely assume that it’s negotiable. And, obviously, if someone adds “or best offer (OBO)” or “willing to negotiate,” the number is super weak and should be attacked with aplomb.

[2] Be careful of serious risks that a credulous mind keeps hidden in the fever of trying to make a quick buck.

[3] This shouldn’t require a footnote, but just in case: always pay off the balance in full every month or you are the biggest sucker of them all.

[4] xxxxxxxxx.