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

Read time: 3.5 minutes

Hey {{ name | friend }},

Have you ever heard someone say, “what you don’t know can’t hurt you?”

Sorry, but that is a flat out LIE. What you don’t know, or choose to ignore, actually costs you A LOT of money.

Unfortunately, I had to learn this the hard way. 

My parents worked have blue-collar jobs so obviously they didn’t have any fancy “networking connections” in Corporate America. 

So you can imagine how excited I was when I got my first summer internship in NYC. I accepted the offer immediately and didn’t even consider negotiating the pay. 

Imagine how bummed I was when I found out the other summer interns, who started on the same day, were getting paid MORE than me for the SAME role. 

Sometimes we make mistakes because we don’t know there’s a better way.

Other times, we choose ignorance. Maybe it’s because the subject (your finances or career) feels complicated, overwhelming …or just plain boring.

That’s why today I want to talk about the Ignorance Tax – what it is, how it shows up in everyday life, and how to stop it from draining your finances.

The Ignorance Tax

The Ignorance Tax is the price you pay for not knowing what you should. 

It’s the money, time, or opportunities you lose just because you didn’t ask questions, do a little research, or face something uncomfortable.

Let’s say there are 2 guys, Julio and Rick. Both are 23 years old and they start at the same company, and earn the same amount of money.

Each year, HR hosts a meeting to go over the company benefits like the 401(k) and HSA.

Julio listens, asks questions, and learns how to take full advantage of his employer’s 401(k) match. 

Rick tunes out. He leaves his contributions at the minimum and tells himself he’ll figure it out “later.”

Fast forward 10 years and this is what each one’s account looks like.

Just by paying attention, Julio comes out $215,000 ahead of Rick. That’s a lot to pay for dozing off in an important meeting.

How you can take action / how you can apply

Now that you know how much ignorance can cost… how do you avoid it?

1. Ask the “dumb” questions

I was that kid who always said “I don’t have any questions” or “I get it” when the teacher asked, even though I had no idea what the heck was going on. 

No one wants to be labeled as “the dumb kid.”

But would you rather feel silly for a few minutes or make an expensive mistake?

Ask questions whenever you can, even if it’s just to confirm what you think you know.

If you’re worried your question might sound “dumb,” here’s a little trick:

“I just want to make sure I get this 100% right, are you saying [phrase it in a way that answers your question]?”

There’s also a 98% chance someone else has the same exact question but is too afraid to ask.

2. Don’t stop learning

I know, after working 8 to 12 hours a day, the last thing you want to do is learn something.

But if you want to make more money, you need to constantly level up your skills. Studies show that employees who develop new skills show a 37%+ bump in their salary.

You don’t need to sign up for a master’s degree. Just spend 30 minutes a week learning something that makes you better at your job or helps you make more money.

Start small:

• Look into skills that are in demand in your industry.

• Research up-and-coming fields.

• Hang out with people who are smarter than you and ask questions.

The opposite of ignorance is knowledge, so make sure you stack up on it.

3. Read the details

I am not saying you need to read through 9,037 pages of “Terms and Conditions” for every single thing you sign up for. I like you too much for that ☺️.

But the great thing about living in the (sometimes scary) age of AI, is that it’s easier than ever to quickly understand complex documents. 

Whenever I need to double-check contracts, policies, or any terms, I’ll upload it to Notebook LM (it’s free by Google) and ask it questions.

The great thing is it only uses what you upload to answer your questions.

You don’t have to become an expert overnight, but you do need to stop paying the price for living in the dark.

Reading this newsletter is a great start 😉.

To making smarter money moves,

— Vincent Chan

Cool things this week

• Smart Money Tip of The Week: The Big Beautiful Bill passed last week. Here’s how it actually impacts your money

• Does anyone else occasionally enjoy trash reality TV? I’ve been watching Love Island this ENTIRE summer and the season finale is today. Let’s go Team Amaya Papaya!!

• Remember those delicious pineapple slices in a can? Well, Del Monte just filed for bankruptcy.

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Vincent Chan

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