What if we could get free shares of AT&T (T)? What if we could get shares without spending any money? Well, in a way, you can. It all depends in how you look at it. “Luke, you’re going to find that many of the truths we cling to depend greatly on our own point of view.” (Obi-Wan Kenobi, Star Wars: Return of the Jedi).
As of the writing this article, AT&T (T) cost $34.74. Where can we get this money? Well, often, cable bills can cost $150 a month or more. Log into your TV subscription account and see what you are spending money on. HDTV (high definition TV) service can cost $10 per month. Yea, the TV picture might be better, but is that worth $10 a month. Cancel that. Are you spending money on movie channels that you are not using? Canceling some or all of them could save another $15 a month. Do you the need the super-fast internet connection? Could you reduce you high speed internet from 25 mbps to 17 mbps, which is still a fast connection? Yes, some of you download might take 88 seconds instead of 60 seconds. But is it worth 22 seconds to save another $15 a month.
With just enough the ideas above, they will save $40 a month. As they say, “a penny saved is a penny earned” (Benjamin Franklin). Well, with the changes above, you are saving 4,000 pennies a month. Benjamin would be so jealous. That is enough money to buy 1 share a month. Yes, the current price is ~$35, but you are putting your monthly savings into AT&T (T). Therefore, another way to look at, you are buying 1 share of AT&T (T) for the cost of HDTV and some movie channels. Is the cost of not having some extra services worth 1 share of AT&T (T) per month?
Yes, it is possible that the price of AT&T (T) will go down. What if AT&T (T) goes down to $26 per share? Your investment will lose 25%. Ouch, that is no fun. “Khan!” (Spock, Star Trek: Into Darkness) What is the % loss on spending $10 on HDTV? After the month is over, your loss is 100%. You do not get any money back for watching HDTV. At the end of the month, you cannot sell the HDTV to someone else. It does not exist anymore. Yes, you can pay another $10 next month for another month of HDTV, but you will lose that money also.
So now we are investing money that we would have had a 100% loss anyways. And here is a little secret, you do not have to buy shares of AT&T (T). You can use that money to buy any other stock you want. Want to cut your cable bill with AT&T U-verse and invest in Verizon (VZ), you can. Shhh, do not tell AT&T (T). Or you could buy shares of Ford (F) if you want. Here is another little secret, you could spend the money on anything you want. Pay down debt, get a meal at a restaurant, or whatever. After 1 year, that $40 a month will equal $480 a year. That could get you a nice within driving distance vacation, a new tablet, or just leave it in your bank account. Well, I guess those are not really secrets. But anyways, the point is, would you rather give your money to the TV provider or use it for any things else you could want?
Here, we like investing our savings. We have followed our own advice above. We have gone on the TV provider’s website and reduced our cable bill by about $40 a month with the suggestions above. And we recently bought shares of AT&T (T).