All of Jeff Bezos’ Amazon Letters to Shareholders together in one PDF through Fiscal Year 2019

For your reading pleasure and business edification, here’s the complete set of Amazon Shareholder Letters penned by former CEO, founder, and executive chairman of the board Jeff Bezos in one handy PDF file:

Jeff Bezos – Compilation of Amazon Shareholder Letters since 1997.pdf

This volume starts with the classic and first 1997 letter and ends with the Fiscal Year 2019 letter which came out in 2020. Bezos is known for his clear and profound thinking about business generally, how to delight customers, and how to build and sustain an incredibly innovative enterprise.

(Special thanks go to the good people that maintain the free version of PDF Split and Merge which I used to compile this, and to whomever already did the work for letters from 1997 – 2012 that I started with.)

60 minute financial makeover

Yes, you can change your financial life in 60 minutes. Set a timer on your phone if you don’t believe me, and let’s go.

The first two changes can be made by anyone and don’t even require any changes to your current spending habits. Definitely implement those ones before you leave this article!

Makeover tactic #1 – Retire earlier in 10 minutes: Minute 0 – 20

Log into your employer’s retirement plan, or open a Roth IRA, and boost your automatic contributions. (The article tells you how to boost these in the future instead if you can’t afford to do it today.)

Makeover tactic #2 – Manage spending in 15 minutes: Minute 20 – 40

Never worry about spending too much again when you do this simple trick using direct deposit + one monthly automatic banking transfer. (The trick still works even if you’re spending all of your take-home pay today, and requires no cuts to your spending if you aren’t ready to make any.)

Makeover tactic #3 – Increase savings in 15 minutes: Minute 40 – 60

Now that you’ve secured your 60+ retirement savings and fixed your spending, take your savings to the next level by cutting costs that you don’t care about so that you can spend or save more for what really matter.

Choose one of the below items and take 15 minutes to read the article and implement it. Extend the time limit another hour if you can and go through the rest of the list for some serious savings!

After cutting your budget back, take 5 minutes to revisit Step 2 and reduce your monthly spending transfer accordingly.

  1. Optimize your auto insurance. Log into your insurance policy to raise your deductibles and cut coverage you don’t need.
  2. Pick one of my 10 savings tips. Tips 1-5 let you choose from turning down the thermostat by 3 degrees, raising your insurance deductibles, cancel a subscription you don’t use much, lower your cable & internet bill, or optimize your cell phone bill. Tips 6 – 10 suggest deferring a large purchase, selling something online, get something from free or cheap used, switching to generic for something at the store, or DIY’ing a service you’d normally pay for (could be as simple as cooking dinner when you’d normally eat out.)
  3. If you’re a homeowner, downsize your trash can or look into refinancing your home.
  4. If you’re thinking about buying a car, save big on it with this guide.

Do this simple thing and never worry about money again

This is the second post in our series of steps you can take in 15 minutes or less to make a huge improvement in your finances. In step one, we talked about the importance of boosting your 401k contributions, even if only by 2-3%.

We’ll talk now about a simple trick I use to instantly stop worrying about over-spending, and start saving more income effortlessly.

TL;DR – Instead of sending all your take-home pay to a single checking account, send all of your income into a Savings account instead, and use a recurring monthly transfer from that Savings account into your bill-paying checking at the end of each month to cover your average expenses:

  1. In your direct deposit, or however you get paid, change the banking info from everything going into your checking to everything into your savings account.
  2. Next, log into your bank account and set up a monthly, recurring transfer from the Savings account that’s getting all your income now, into your checking account that pays all your bills.
    • Set the monthly transfer to your average monthly spending (see below for how to get this), plus a little bit extra to make sure you have enough.
    • If you can’t be bothered to estimate your spending, just set the monthly transfer equal to your monthly pay. If you get paid monthly, use your last month’s pay stub as your monthly transfer (make sure to use the take-home amount, not the gross!) Get paid every two weeks? Multiply your last stub by 26/12. Twice a month? Multiply your pay by two.
  3. Optional: for cars, vacations, weddings, college, and other big, irregular purchases that you need to save up for, either use some of the money that lands in your checking, or (much better) add more monthly transfer to additional savings accounts and send a fixed amount of money to them from your main Savings account. (Schedule these transfers a day after your checking transfer so that the spending money gets top priority in case there’s not enough in your main Savings.)

This simple direct deposit + monthly transfer setup ‘fixes’ your spending so that you aren’t tempted to spend your whole income. This drastically amps up your savings, especially as you get raises and bonuses. It also accounts for irregular income like that of self-employed folks, or those who rely on commissions, bonuses, or RSUs/stock options. It even works for retirees: just set all your pensions, dividend payments, social security, and any other income to go to Savings, and use the monthly checking transfer as described.

Ready to do this yourself in 15 minutes? Follow along below!

Use direct deposit to master your spending and amp up your savings automatically

My employer uses ‘Workday’ to manage employee pay. I clicked ‘Payment Elections’ to get to my direct deposit. Search your employer pay site for ‘payment elections’ or ‘direct deposit’, or ask your HR person how to change your direct deposit if you can’t figure it out.

Here’s what your set up might look like today, with the ‘balance’ of your paycheck all going to checking:

The Sucker’s direct deposit: everything going into checking in one lump sum.

Adjust your direct deposit to send everything to Savings instead

This is super easy. Just swap out your checking account number for your savings number in your direct deposit. Get the routing and account number for your Savings account by logging into your bank online.

The Pro’s direct deposit: everything going to Savings, with a monthly transfer to checking (we’ll show that next), and the rest that’s left in Savings to pay off debt, invest for the long-run, or buy a home, and NOT for spending!

Estimate your average monthly spending: the easy method

If you’re feeling lazy, or spend roughly everything and can’t be bothered to cut back yet, just find your last pay stub, convert it to a monthly amount of take-home pay, and set your monthly checking transfer equal to that. If you get paid monthly, use that amount. If biweekly– every two weeks– multiply your last pay stub by 26/12 and use that as your monthly transfer number. For semi-monthly– twice a month–, just double your pay stub. Make sure you’re using the take-home pay amount to compute your monthly transfer, and not the gross!

Think of this as the ‘save tomorrow’ method. Yes, that means everything today will go to checking and nothing will stay in savings. But, when you get a raise or bonus, it’ll get banked in your Savings without you having to lift a finger. You can always spend some of that extra money later by adjusting your monthly transfer upwards, or taking some money out for a one-time treat, but the default will be that you save more, and good financial defaults make all the difference.

Estimate your average monthly spending: the better method

To start saving some portion of your income today, roughly estimate what you spend each month, erring on the high side. First, add up any large, constant bills like rent or your mortgage that come straight out of your checking account.

Next, average together your last year’s worth of credit card bill and any other bills that come straight out of your checking account (or wherever else you pay bills from.) Include any cash that you took out of an ATM.

For credit cards, you and then log into your credit card(s) online, download the past year’s worth of transactions as a CSV file, and add them up in Google Sheets or Excel and divide by 12. Or, just look at your payments IF you pay your bill in full each month, and add up the last 12 of those and then divide by 12. Many credit card providers also give you annual summaries in January (look under ‘Statements’), so you can just grab your most recent one of those, get the total, and divide that by 12.

Here’s mine from my Chase credit card, which shows $16,035 in 2020 spending (bottom right), which is $16 K / 12 = $1,333 per month. They also give you a useful breakout to understand your biggest spending categories, but we’re not worried about that here.

For bills paid from your checking account, log into your account and do the same thing you did with your credit card transactions. Look for something like ‘Download Transactions’. Make sure to filter out stuff that’s not actually an expense, like transfers between accounts.

I downloaded my Capital One 360 checking for the past year into Excel and scanned it quickly for bills. I just had my mortgage, a utility bill, and a handful of checks since I put as much as I can on my credit cards. I added up the bills and checks and divide by 12.

So, let’s say my mortgage is $2,500, my credit card spending was $1,333, and the remaining misc bills that came out of my checking averages $167. That’s a total of $4,000 per month. I also use $200 / month for cash spending, so that’s $4,200. Round up to be safe, so call it $4,500.

Set up the monthly transfer to checking to pay your bills

Now that you have your estimated spending as a monthly number, log into your bank account and set up the automatic monthly transfer at the end of each month to go to your checking. Schedule a few business days earlier if you’re transferring from Savings at one bank to checking at a different bank since it could take 2-3 business days.

Here’s how my transfer looks using Capital One 360:

At Capital One 360, you click your checking account then ‘Transfer’ to set up a recurring monthly transfer like this.

Pro tip: If your rent/mortgage is paid on the 1st, change all of your credit card due dates to be on the 3rd or 4th so that these essential bills get paid soon after you transfer your spending money to checking. Do the same with your utility accounts that come out of your checking if any and if possible. This way, all your important bills are paid soon after you get your spending money, and what’s left over you can spend via a debit card or with cash withdrawals guilt-free since you know you’ve already taken care of your monthly must-pays.

Important: Make sure you have a cash cushion in your Savings account to start the full monthly checking transfer. You could also pad your checking a little bit in the beginning in case you underestimated your expenses. (But, going forward, only adjust your monthly transfer to checking! You want to get in the habit of knowing and sticking to exactly one fixed average monthly spending transfer.)

Splitting your income automatically to spending & saving is the key to getting rich

That’s it, you did it! If you didn’t follow along, take 15 minutes now to log into your company’s direct deposit to dump everything to savings, and then to your online banking to set up the monthly checking transfer. You can always choose your paycheck amount (the ‘save tomorrow’) method to transfer for now, and go back later to update the amount after you’ve crunched the spending averages. The key is to take action and do some form of this right now!

Once you do this, you’ll never have to worry again about budgeting under normal circumstances.

Later, invest your excess Savings

The last step, which you can do a few months later after you’re system has been running, is to periodically transfer the excess money left in your Savings account to invest it. You could set yourself a quarterly calendar reminder to make this transfer, or set up some automatic transfer.

Let me know in the comments if you implement this system, or if you have any other suggestions for making this system, or a different one, work!

How to retire way earlier in 10 minutes

This is the first post in a series of easy steps I’m writing for the New Year that will dramatically improve your financial security in 15 minutes or less.

Retire way earlier by boosting your retirement contributions in 10 minutes

Log into your employer’s retirement plan (e.g.: 401k/403b) and increase your contribution to 20%. Or, just put in the full IRS-allowed max of $19,500 for 2021. Divide $19,500 into your base salary to get a percentage.

Contributing 20% will only reduce your take-home by 15%-ish, depending on your tax bracket, because of the taxes you’ll save. If you were already contributing 10% to your 401k, an extra 10% will only cost you 7-8%. You can live off 93% of your old spending without even noticing, I promise!

If 20% is more than you can stomach to do right now based on your current spending, just log on and boost your contributions by 2-3% instead, which you definitely not miss since that’s a mere 1.5 – 2.5% of your take-home. After upping your contribution, set a goal of getting to 20% eventually, and use the automatic increase function that most providers offer to boost your savings annually by 2% until you get to 20% (or the max contribution limit.)

No matter how much you decide to contribute, definitely put in enough to get all of any employer matching your company offers. That’s free money you can’t afford to pass up.

Why boost your retirement contributions?

In addition to saving thousands a year in taxes, boosting your 401k contribution from 10% to 15% per year means you will have 50% more money at retirement.

Yes, that’s right, for the price of only a ~3.5% decrease in stuff-you-could-buy-that-you-didn’t-need-anyway, your income in your golden years will go up by 50%! Even a mere 2% boost from 10 to 12% ups your retirement income by 20%, so at least do that much.

I’d take this deal any day; wouldn’t you…? If you’re still not convinced that saving for your future is something you must do now, picture yourself in your 60s or 70s: grey hair– or white, if yours is already grey–, (more) wrinkles, a slower step, and someone wiser, quieter, but a little more lonely and less lively than you are now. Don’t you want that person– you— to be financially comfortable, maybe even relatively wealthy, even if it means a small sacrifice on the younger you?

Do it right now, before you read any further!

Log into your workplace’s retirement account, which for most people is either a 401k or 403b plan. Search your company’s benefits site if you don’t know where to go, or if you know they use Vanguard or Fidelity, head straight there and login (create an online login if you’ve never logged in before.)

Click on your 401k or 403b account if you have multiple accounts, and then look for something that says ‘contributions’ like ‘change my contributions’. Click that, and find your current contribution, usually expressed as a percentage of your base salary. Enter the new number that you decided upon above, and save your work. You should get some kind of confirmation screen.

Great work! Keep reading. You need to do one more thing while you’re logged in.

Optimize your investments with a few more button clicks

Switch both your current investments as well as your future contributions to a low-fee Target Retirement fund like those offered by Vanguard or the Fidelity Freedom funds. Choose the year closest to your 75th birthday (e.g.: if you were born in 1980, choose the 2065 fund.) You should see some option like ‘change investments’ and might have to do this once for future contributions and once for the money already invested in your account.

For bonus points, double-check your ‘beneficiaries’, or set them up if you haven’t before. You want to make sure your assets are sent to the people or charities you want to get them if something untimely happened to you.

Don’t have an employer retirement account? Use an IRA instead

If your employer doesn’t have a retirement account, or you freelance and don’t want to set up a self-employed IRA, open a Roth IRA at Vanguard instead, then set up automatic monthly deposits with this link after you’re logged in. The maximum yearly contribution if you’re under 50 is $6,000/year, and $7,000 if you’re 50+. Max out if you can.

I’m assuming a Roth is best for you since I’m predicting you’re at or under the 22% tax bracket (i.e.: you make less than $100,000 single, or your family makes less than $200,000 if married.) If your marginal rate is 24% or more and would rather save on taxes now, use the Traditional IRA instead.

You’re now retiring earlier, or more luxuriously, or both!

Boom! You just secured your age 60+ retirement in the time it takes to make a cup of coffee. Pat your self on the back, take a lap and hit the showers.

Next up, make this simple change to you direct deposit and never worry about spending too much again.

If you want to retire earlier than that, read this too.

Share in the comments how much you bumped up your contribution, and whether you changed your investments or beneficiaries!