Is Anything Truly Free?

Is anything truly free? The fallacy of free

We see offers for “free” things all the time. “Start a free 7-day streaming trial before committing to a full membership.” “Sign up for free grocery deliveries for a month with no obligation.” Savvy marketers know how to entice the public by inundating them with free offers. And when it comes to testing out new products or services, what’s not to like? People see a maximum return with minimal investment and quickly sign-up.

Is Free Really Free?

People are so conditioned to opt-in to “free” deals, that we’ve collectively forgotten the difference between a deal and a rip-off. Free is a fallacy that imparts the idea that we can receive something for nothing—consistently. Yet nothing is truly free—even things marketed as such require an exchange of something. Sometimes, our time or energy is required. Sometimes, it’s our email. Sometimes we’re sacrificing the quality of our results in order to save a buck. 

When we give away our email for a freebie, we’re electing to receive emails, which can clutter our inboxes. When we agree to help a friend complete a project or choose to DIY our own, we’re giving our time. While free doesn’t automatically equal bad, we have to recognize that an exchange is made, and prioritize our decisions. Give your inbox space to companies who deserve your attention. Set boundaries with friends and family to preserve your time and energy, and choose to assist where you’ll actually be useful. 

Sometimes, we do things ourselves to save money… and end up costing ourselves in time, labor, and peace of mind. Perhaps a person sees a “Before-and-After” show and wants to save money on a kitchen remodeling project. They might refer to online video tutorials and set aside a weekend for their do-it-yourself (DIY) project without consulting a contractor. They lay new flooring down, make a few plumbing adjustments and replace the cabinetry. While they may achieve the look they saw online or in a magazine, what if there are mistakes? What if the plumbing changes aren’t correct? Or the floor tiles are not sealed properly? A broken pipe can flood the floor and seep into the basement. It can lead to a mold problem that can cost thousands of dollars to replace. 

The problem with DIYing everything is that there’s a learning curve, and what a contractor could confidently accomplish may take you 30 hours to learn and 30 more to complete. As an entrepreneur, you know that time is one of your greatest resources (think about the opportunity cost of a DIY project). Does that mean that doing an extensive DIY project is always a waste of time? No. Because an exchange always occurs, it’s important that we prioritize our decisions. And we must weigh the costs, even the potential ones.

The Lack of Quality

Another concern with perceiving things as “free” relates to cost. People that look for bargains may decide between two different products. Like in the example above, a homeowner may look for the best deal on their kitchen remodel. Let’s say that homeowner selects self-adhesive vinyl tiles for their new flooring. They based their decision on the price difference at their home improvement store. That homeowner might not consider the difference in materials. A quality, laminate floor may last for several years. However, the cheap replacement tiles shift after a few months of wear-and-tear and need replacing. Because they already took a shortcut, the homeowner ends up paying more for the tiles than they should. That simple purchase ends up including additional transactions to help maintain a pristine look. In actuality, all they had to do was read the reviews and they would learn that others complained about the cheap materials not lasting.

Buying cheap sometimes comes at a cost; after all, cheap and inexpensive are two different things. A better plan is to read the reviews, explore the best types of materials to use, and then weigh the costs. 

With the kitchen remodeling analogy, the homeowner might have saved a few bucks on their DIY project. However, they’ll have more peace of mind by hiring a contractor. And they won’t have to worry about not meeting building codes or concerns over insurance lapses from faulty plumbing. They might even conclude that a good deal isn’t always worth the risk. Mitigating risks, and seeking certainty, should be at the forefront of financial decisions.

How Optimization and Efficiency Comes Into Play

Merriam-Webster’s definition of efficient is “capable of producing desired results with little or no waste (as of time or materials).”

If you think about the definition, you might focus on “little or no waste.” People sometimes equate that with how they spend their money. However, inexpensive isn’t a synonym for efficiency. We prefer to interpret this as unwasted results. Using something that’s inexpensive, for example, might save money, yet does not increase efficiency. Buying cheap work boots won’t save you money if you have to replace them every few months. However, a onetime investment in quality boots could mean years of usage. The cheap boots are a short-sighted solution and end up being highly inefficient.

Optimization is a similar ideal. People say they want the maximum return on their investment with their finances. What they’re saying is that they want to optimize their opportunities, i.e., they want more quality than just quantity.

If your client’s investment portfolio was leaking money, would you help them repair the holes or try to add in more money? Some might think that out-earning the leaks is the best option. However, stopping the leaks is a better solution, as you can now preserve your cash flow. The idea of maximation, like the “fallacy of free,” is an illusion that claims to solve complex problems with simple solutions. The reality is that complex problems require discipline, strategy, and a long-term scope. Efficiency and optimization are financial benchmarks that provide real growth AND certainty.

Putting Some Skin in the Game

When we seek out resources and materials that are valuable to us and are willing to exchange something, we have a different mindset. We’re more willing to put in the work or read the book. Have you ever offered a client resources to help educate them about whole life insurance, or other financial strategies, only to find that they hadn’t engaged with the material? As an advisor, this can be extremely frustrating when you’re prepared for the next meeting and the client is not. 

Unfortunately, this happens because the client isn’t invested in the information. They might not have contributed their own resources. Instead, try sending the Amazon link to the book you want your client to read. This does two things: it gives them the choice to be interested and acquire the information, and it asks them to put “skin in the game.”  If they spend the money to purchase the book, they’re far more likely to read it. This also works with resources that require an exchange of time or energy. Is there a landing page you can send them to, so that they can choose to be invested, or not?

What if you offered someone access to an online conference or class for a minimal fee? Chances are if they’ve paid any amount of money for it, they will read the materials or watch the tutorial. Why? Because now they’re invested in it. Even if the fee is a small amount, the person put up their own capital. It’s why some marketers use strategies like charging $10 for a $150 webinar. The person becomes actively involved as they exchange value for value. They perceive the value in increasing their education so they’ll opt in. Successful entrepreneurs like Dean Graziosi or Garrett Gunderson will run promotions where they offer their book for free, as long as the customer pays for shipping and handling. 

If you want your clients to be active participants, you have to give them an incentive to be active participants. There’s unlimited content to consume, yet people pay the most attention to the content they pay for.

A Present-Day Strategy for a Future Desire

Some people see life insurance as a way to protect their family’s interests if something unexpected happens. Others see it in a negative light as an added or unnecessary expense. They may not recognize that insurance is an exchange, and like other things in life, you get out of it what you put in. It’s tough to combat the lie that anyone pushing life insurance as something more is out to steal your money. 

A typical advisor might promote term life or universal life insurance as a cheaper version of whole life insurance—perpetuating the lie that all life insurance is created equal. However, we have to urge our clients and others to dig deeper. Can three separate products truly function the same way with such varying price discrepancies? Unfortunately, no. Ergo, if you dissect them further, there are all kinds of contractual differences that function differently. 

What it comes down to is helping clients learn that understanding what something truly costs can save them time and money. Since everything takes on some type of exchange, your clients should know the pros and cons ahead of time. Once people understand their options—and what they might gain or lose, they can make better decisions. And helping clients confidently manage their finances is what matters.

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