Nick Eaash
Cancel Prime and get rich Nick Eaash

Photo by Fabian Blank on Unsplash

Have you ever thought about how much money you’ve send to Amazon?

I did not.

For ten years I had no clue and decided to find out.

A few days ago I looked at my past orders on Amazon and realized that there was no option to see my spendings in total (of course not). This made me curious but me being too lazy to calculate every order that I’d ever placed I began searching for an easier way to find out. After a while of searching I discovered a tool that gave me the opportunity to see how much of my money went into Amazons bank account annually. In 2019 I spent about $1.447 on useful stuff — at least I thought so. Ten years ago I signed up to Amazon and since my first order was purchased I spent a total of $21.277.

This got me thinking even more.

How much money does the average person spend on Amazon? I spotted a survey on “statista” and was intrigued to see that Amazon Prime members ($1.400) were spending about twice as much (57%) as Non-Prime members ($600). At this point it was obviously the right decision not to continue my Prime membership and to hopefully save those 800 bugs.

Knowing how much money could’ve been saved in the past I asked myself how I would’ve invested the money wisely. A cheap and simple investment solution is an Index fund, so I decided to use the S&P 500. The advantage of using this Index was that I could easily look at the past ROI and calculate my hypothetical returns.

The ROIs of the last 10 years combined result in 154,6 % return on capital — so if I would have invested 57% of my Amazon purchases, this money would be worth $16.447 today. Using todays Prime subscription rate of $120 would ad another $1.855 which concludes in a total saving of $18.332.

Of course these numbers are hypothetical — I did not cancel Prime in 2009 but now I wish I had. Sometimes I didn’t think twice before I bought something and a few month after my purchase a little whisper told me that I should not have bought it in the first place. I have the feeling that my Prime membership has led to the fact that I often bought things thoughtlessly and too quickly just because I was happy about the fast and “free” shipping.

Source link