Brace yourself, it's coming

Welcome to reThinkable - my Sunday newsletter where I share actionable money tips, strategies, and resources to help you make smarter money moves.

Read time: 2.7 minutes

Hey friend,

If you follow me on Instagram Stories, then you know I've taken a new pivot in my "health is wealth" journey.

I used to prioritize protein, but recently fell down a health rabbit hole and learned about the importance of gut health — and fiber is one of the best things for it!

I asked ya’ll for high fiber food recommendations (that don’t make me feel like I’m eating rabbit food), and ya’ll had some great suggestions. I’m sharing them here just in case you want to join me on my health is wealth journey:

• Chia seeds

• Avocados

• Psyllium Husk

• Raspberries and blueberries

• High fiber tortillas

• Pears and apples (with the skin)

On a completely different note, I wanted to talk about how Trump tariffs will impact your wallet and how you can best prepare for it since his tariffs on Canada and Mexico are expected to go into effect this week.

Trumps tariffs and your wallet

I see a lot of misunderstanding on what a "tariff" actually is so I wanted to clarify here.

PS: I have an Economics degree so I have some experience in this space

Here are the 2 Ws and 1 H about it:

What is a tariff: A tariff is a tax that a government places on goods imported from other countries. Think of it as an extra fee added to the price of products coming from abroad.

How does it work: Let’s say you own a T-shirt business in the US. You import your T-shirts from China for $10 a shirt. If the US government adds a 20% tariff, those T-shirts now cost you $12 to import before you sell them. That means you’ll need to raise the prices of your T-shirts to recoup the costs of the tariffs.

Why put a tariff?: There are 2 arguments in favor of tariffs:

1. It may give American-made products an advantage. For example: if China can produce a TV for $500 and Americans can produce it for $800. If we impose a 70% tariff on importing Chinese TVs, then suddenly, the American TV is cheaper, $850 vs $800. Either way, the price ends up going up for you.

2. It could reduce trade deficits. A trade deficit is when Country A buys more stuff from Country B than Country A sells to Country B. As you can imagine, since the US is the wealthiest country in the world, it’s normal that we buy a lot more stuff than we sell. There are pros and cons to trade deficits that I won’t get into in today’s newsletter

So the big question is, will tariffs help the US? Most economists don’t think so. So far, it seems to be leading to trade wars, which makes it harder for US companies to sell their goods to other countries. For the most part, open trade is good and stifling trade is bad for all economies involved.

But with all this said, how can you best prepare yourself?

How can you prepare yourself?

1. Review Your Emergency Fund

There’s a lot of economic uncertainty right now but you should brace for higher prices.

Review your Emergency Fund to see if it’s sufficient. Aim to keep 3-6 months of essential expenses in there — maybe even consider extending it to 4-7 months. Right now, the more cushion, the better.

Remember to keep this money in a High Yield Savings Account (HYSA) so it earns more interest. Click here for some of my HYSAs.

2. Actively Cut Costs

You don’t have to make extreme sacrifices, but take a look at your expenses. Look for places where you can trim your budget. Ask yourself:

• Do you have any unused subscriptions that you can cancel? Think Netflix, Hulu, magazines etc. 

• Are there any bills that you can negotiate with to cut costs? Think internet, phone, utilities etc. Click here for a helpful technique to negotiate bills.

• Can you shop around for cheaper insurance? Think health insurance, car insurance etc. Click here for an an easy way to see if you’re overpaying for car insurance.

3. Keep Investing for the Long Term

When the economy shifts, people panic and make rash decisions. Don’t be one of them.

Stick to your original investment strategy. If you believe you’re overexposed, consider trimming higher risk investments. The market goes up and down, but historically, long-term investors always come out ahead.

To making smarter money moves,

— Vincent Chan

Vincent Chan

Find me on Instagram, TikTok, or YouTube

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