Welcome to Money Metagame, the blog that dives into different ideas and techniques behind optimizing your money. By optimizing your money, you will be able to stretch your income further and achieve your financial goals faster. Before we begin to explore the best way to do that, let’s make sure we are all on the same page.
Let’s Start With The Game Itself
It’s a game that everybody plays, few people really understand, and almost no one has mastered. Money and finances can be thought of like any other game, but with a few important exceptions:
- Everyone is playing a different version of the game. Financial goals can range from buying a brand new Tesla, retiring at 35, throwing the biggest wedding your family has ever seen, traveling Europe, or simply having something left over at the end of the month to put away for later. Not only that, no two people have identical means of acquiring money to meet those goals.
- The rules are constantly changing. Taxes, banking, credit cards, and more are frequently changing and this means you will have to modify your strategy often to make sure your money is not being wasted. Some advice is timeless and can be applied to almost anyone, but other advice may only be great for a certain kind of person and only for a short period of time.
- Avoid comparing yourself to others. Everyone has different goals and means in the game of money and we are all at different stages of the game. Comparing your own finances to others or trying to keep up with the Joneses is a surefire way to lose. Finding others with similar goals to your own is a great way to compare strategy and discover new ways to optimize your own money, but avoid turning it into a competition with winners and losers.
- The game lasts a lifetime. Barring any global apocalypse during your lifetime, you will probably be spending money in some form or another up until the day you die. Actually, even after the apocalypse, we’ll probably come up with some kind of currency, so parts of this may still apply. Some people want to amass a fortune to pass onto their children while others want their last check to bounce, but regardless of the final goal, thinking long term is necessary to truly optimize your money.
These four exceptions certainly don’t cover everything stopping the game of money from being a perfect metaphor, but are all very important to keep in mind when deciding the best way to optimize your own money. Despite all the differences in every person’s individual finances, many techniques exist that can be applied across the board to maximize the value gained from your money.
So… What’s a Metagame?
Let’s start with the term itself, “metagame”. If you have ever tried diving really deep into the strategy behind card games, board games, or even video games, you may have seen this term before, but otherwise it’s probably brand new. Wikipedia’s definition sums it up fairly well:
Metagaming is a broad term usually used to define any strategy, action or method used in a game which transcends a prescribed ruleset, uses external factors to affect the game, or goes beyond the supposed limits or environment set by the game.
Poker is a good example of a game with a deep metagame. On the surface, poker simply consists of a rule set that defines how to play the game. These rules consist of how to deal, who acts first, when you are allowed to bet, and which hand ranks higher at the end. Everyone knows these rules going in, but simply knowing the rules is not going to lead to optimal play. Just below the surface exists basic strategy such as which hands to play, how much to bet, and when to fold. Even deeper than that exists some math that can tell you exactly what the chances of that next card completing your hand are or how big the pot has to be for a raise to make sense. Near the deepest part of the metagame exist things like mind games and table presence that only the true experts of the game are able to master and implement.
The idea of a metagame should be becoming clear now, but that’s enough about poker. I don’t want to you leave with an impression that poker is a viable way to fund your retirement (at least for most people).
The Money Metagame
We are all familiar with the basic rules contained in the game of money. Money is acquired through some form of income and then either spent on goods and services, saved away, or invested to hopefully generate more money. Income can come from any number of sources with the most common being a job, but it only makes up half of your finances. The other half is spending, and in many cases, spending is the more important half because of how it can be leveraged in more powerful ways than your income. Balancing income vs. spending is the primary pivoting point in optimizing your finances, but only makes up the surface of the metagame. Beyond this surface layer of income and spending exists many levels of different ways for money to help or hurt your bottom line. Some of these things are mandatory (taxes), some optional (loyalty programs), and others relatively unknown (churning). The art of navigating and optimizing all of the different rules and options available to you in order to get the most out of your money is the Money Metagame.
Before I give an introductory list of different concepts and techniques contained in the metagame, there are two very important principles that need to be considered before implementing any of them in your own finances.
- Time is money: All of the techniques involve some amount of time to implement and some benefit to be gained. Always take into account how much you value your time vs. the benefit being gained.
- Don’t spend money to “save” money: Many of the techniques involve spending money to gain a benefit, but don’t fall into the trap of buying things you wouldn’t have bought in the first place. Groupon may have a 50% off deal for a new restaurant, but considering where and what you would have eaten if the deal didn’t exist is necessary when deciding if the deal actually benefits you. If you definitely would have eaten there with or without the deal available, then it’s a no brainer to take advantage of the deal, but if you probably would have just cooked a meal at home, you might be falling into a spending trap.
Introduction To Various Metagame Techniques
The different techniques and ideas below are not meant to be a comprehensive list and only touch on a fraction of the different ways to optimize your money.
A Few Basics
The basics of the money metagame include things that most people have heard of and many people take advantage of, but very few have fully optimized for their financial goals.
- Discounts, Sales, and Coupons a.k.a Bargain Hunting: Everybody likes getting a deal and most people are proud of the ones they have taken advantage of. A comment on someone’s new purchase is usually followed up with a quick conversation about how great of a deal they got on it. Unfortunately, companies and sales people prey on this fact and have become very good at convincing everyone that they got a deal. Always compare what you’re buying to several alternatives in both price and quality, and never buy things only because it’s a great deal.
- Retirement Accounts such as IRAs and 401ks: Everybody with an income has access to at least some of them, and many employers offer several others. These all offer amazing ways to optimize your money for the future by avoiding taxes and possibly getting matches/bonuses from your employer on top. Despite the enormous benefits, some people fail to take advantage of them.
- Simple Cash Back/Rewards Credit Card: There are some advanced techniques for optimizing your money with credit cards, but almost everyone should at least be using a cash back or rewards credit card for the majority of their spending. An extra bonus on top of money you were spending anyway is great, but not all credit cards are created equal.
Getting More Advanced
These advanced techniques are ones that many people have heard of, but not many are taking full advantage of. Even seasoned veterans of the money metagame are still finding new ways to take advantage of and combine these techniques with others in optimal ways.
- Loyalty Programs: Businesses such as hotels and airlines offer fairly comprehensive loyalty programs, but your local grocery chain might have one too. They offer incentives for signing up, incentives for spending money, and many benefits to their members. The complexity increases when you take advantage of the larger promotions and follow the web of connections between different partner programs.
- Financial Independence: Is it possible to side-step an entire portion of the game of money? By tossing convention aside, saving a large % of income during their short working years, and investing that money wisely, many people have been able to live comfortably entirely off their assets. Whether you choose to cut 1 year or 30 years off of your working life, you should be aware of how much money it takes to buy your freedom.
- Online Shopping Portals: What if I told you everything you bought online costs you 1-10% too much? In many cases when buying things online, it is possible to shop through a cash back or rewards portal that gives you a percent back on everything you buy. Combining this with credit card bonuses and different coupons/deals can save lots of money.
Taking It To The Next Level
Most people have not even heard of these, let alone taken advantage of them. They each carry certain risks and disadvantages, but when used correctly can yield enormous benefits.
- Travel Hacking: Hidden city flights? Free upgrades to hotel suites or business class? Sub-$500 international flights? Completely free hotel rooms? All of these things are possible and more via mistake fares, cheapest rate guarantees, and other travel loopholes that can add extra vacations to your life for pennies on the dollar.
- Credit Card Signup Bonuses a.k.a. Churning: What’s better than 1 credit card? Lots of credit cards. This one sounds dangerous on the surface and definitely can be for the unorganized or undisciplined, but for a metagame master, taking full advantage of signup offers and bonus categories can add up to significant savings.
- Manufactured Spending: Once upon a time, the government let you buy money with credit cards… Anybody else see the opportunity there? By going against the convention of not spending money to save money, a select number of people are able to actually generate money by spending money. While it’s certainly not as easy as it used to be, there are still methods that exist along this line of thinking. Definitely not for the light of heart.
Each of these techniques offers some value on their own, but truly optimizing your finances will involve using many of them, often combining them in different ways. All of these topics and more will be covered in various articles ranging from brief overviews to in-depth analyses, and I look forward to hearing about your own successes in the Money Metagame.