Welcome to The Loaf - making money & business more approachable for creatives & freelancers
Last week's free gift has been shipped and should've arrived at a few lucky subscriber's doorsteps this week 📦
I love sharing stuff that I want to make so starting on October 1st, we're releasing a new, free piece of merch every Saturday through the end of the year.
Supply will be limited since this newsletter makes no money and I'm funding it with profits from freelance work, but most of the pieces won't be sold or released.
Once they're claimed here in the newsletter, they're gone.
May the earliest email-openers win ⏰
Creative Business: Casey Neistat Gets Personal About His Creative Journey [video]
This is the most unique Casey interview I've ever seen.
As a guest on Bert Kreischer's comedy podcast, he revisits his tough childhood, quitting his popular vlog series, how he met his wife, and more.
Money: How 1,000 Creators Would Spend $2,000 [article]
What would you do if you were given $2,000? This article breaks down over 20 different ways that creators would spend the money, including:
Topic of the week: If I have the savings to pay all cash for a new car (about $30k), should I just use that or get a loan for it?
- Lauren, 31, Nevada
Quick note - the details of this question were already addressed outside of the newsletter (such as her other savings goals, comfortability with debt, etc), so this is how I would think about it applied to anyone's situation:
Most of the time, you'll hear people say that you should avoid debt at all costs and generally, I agree. Debt can be costly but if used correctly, it can be viewed as a tool rather than a hindrance.
In this scenario, the three main questions I'd be asking myself are:
Some people genuinely hate debt and will avoid any scenario where they have to take on more of it. It's understandable, but on the other hand - instead of paying all cash, what if you invested some of the money and it earned higher returns than the interest rate of the loan?
Or what if you put the money into your business and ended up earning more, making it even easier to pay off the loan?
When you run the numbers, the cost of a $25,000 loan really isn't that expensive in the grand scheme of things.
For example, if you put $5,000 down and took out a $25,000 loan at 5% interest for five years, you'd only end up paying a little more than $3,000 in interest over the course of the loan. That comes out to a little more than $50/month in interest.
Here's a breakdown:
So in this scenario, by taking out a loan and still having $25,000 to invest or use elsewhere, the total cost of the car only goes up by $3,306.85.
I don't know about you, but I'd rather take the loan and have that extra cash on hand rather than having a fully paid off car (if I could afford the monthly payments).
The nice thing about having a loan rather than paying all cash upfront is that you can always pay down the car faster than what the loan term is.
Paying it down early can save money on interest while also giving you time to save more and not burn through existing savings first. However, if you want to pay down a loan early, you need to make sure there aren't prepayment penalties and if there are, make sure that the interest savings are worth more than the penalties.
Having the cash savings to pay off a car in full can be tempting (and it can make sense for some people), but you just want to be sure that you understand the tradeoffs and the opportunity cost.
Last thing: Another trade-off to consider is that almost every lender will require you to have full-coverage insurance until the car is paid off. This can be costly and if you have a paid off car from day one, you could get by with liability-only insurance and save money on the premiums.
💸 Have a question about money?
Questions that are more in-depth/personal may not make the newsletter, but are welcome and actually, encouraged. The goal of this is to answer your most pressing financial questions for free, while sharing some of them publicly to help everyone learn.
😅 How to reduce the effects of context-switching
👀 How the 80s shaped influencer marketing
🖍 What it really means to be a creator
🎥 Watch: How Ryan Trahan and his editor pulled off the 30-Day Penny Series (50 min)
✍🏼 Freelance Finds: How to create an effective content brief for your clients