The Hidden Cost of Free Radio*

Listening to broadcast radio may be the most expensive habit you have. Consuming commercial “free” radio in lieu of high value content such as podcasts, audiobooks, and listener supported public radio, represents a tremendous opportunity cost that is likely eroding your future earning potential. 

Stay with me for a moment. We need to diverge from bashing Ryan Seacrest and his Weekly Top 40 to get to know a slightly more under the radar superstar.

The Nobel Laureate

Daniel Kahneman won the 2002 Nobel prize in economics for his research applying psychology to the field of economics. Kahneman’s 2011 book Thinking Fast and Slow provides the underlying basis for my argument. The general premise of his book is that our thoughts can be classified as either “System 1” or “System 2” thinking.

System 1 consists of the automatic, unconscious, actions that we conduct regularly without deliberate thought.  Think (lol) of washing dishes, driving your normal route home from work, or mowing the lawn.

System 2 is the deliberate, effortful thinking that requires our full attention. System 2 is required for the conversation you are having with your spouse while washing the dishes, deciding upon the best argument to request a raise from your boss while on your commute, and troubleshooting the mower when it quits working.

Image Sourced from Upfront Analytics

The Great American Time Heist

The majority of people vastly under utilize their time during System 1 activities. Mindlessly listening to commercial AM/FM radio on your commute is a chief culprit in the Great American Time heist that has been going on for decades*.  Aside from the rampant homogeneity of most radio stations “music”, listening to broadcast radio submits you to the endless stream of consumerist noise known as radio advertising*.

The idea of using a separate device to listen to a custom stream of music is not exactly revolutionary. What is surprising is the percentage of the adult population that continues to consume terrestrial radio because it is the simply the path of least resistance. A 2018 Nielsen study found that fully 93% of the U.S. population consumes terrestrial AM/FM radio each week.  That’s a higher percentage of people reached than by TV (88%), smartphones (83%), and PC’s (50%).

Unusual Sounds

Correlation does not equal causation. I do I think there are some interesting corollaries between the financial independence movement and ditching the radio*. According to a recent Bankrate survey 65% of Americans save little or nothing, and less than 16% save more than 15% of their income. Less than 1% of Americans retire before age 50., with more than half retiring between 61-65.

Podcasts usage among the masses is growing, but still pales in comparison to mainstream radio. Just 17% of Americans reported listening to a podcast on a weekly basis in 2018. My hypothesis is that Financial Independence pursuers are over represented in the 7% of the population that does not regularly consume mainstream radio.

Unusual, independent types (mavericks!) strive to optimize their time and get the most out of their day. Podcasts and audiobooks are the fertilizers that grow these mavericks earning potential and personal growth.

Tom Cruise F-14

65% of Americans save little or nothing, and less than 16% save more than 15% of their income.

Blame Darwin

AM/FM radio is one button instead of two, or zero buttons instead of one. It’s quite literally the easy button.  Radio provides comforting, inane banter and familiar songs that do not require any real thought to process. It can sound (lol) nice to leave your stressful job and just release your mind to the easily digestible “Wonderbread” that is radio. Plus, radio never fails to give a solid head’s up on “the screaming deals that won’t last long down at Smith Brothers Hyundai Jeep Kia.”

In some way our evolutionary biology is likely satiated by the efficiency of getting in the car and having to take no additional action. In the same way easily digestible white bread is disastrous for your physical health, mainstream radio does the same to your financial health. The reluctance to dig your phone out of your pocket and connect to an audio source of substance is truly a costly one.

Opportunity Cost

Listening to mainstream radio represents one of the most significant areas of opportunity cost in at least 93% of American lives (see above). Opportunity cost is the literal cost of choosing one activity over another. A teen (such as me 20 years ago) choosing to work 30 hours a week during high school rather than engaging in the studies and activities likely to advance long term career prospects is one example.  A more typical example of opportunity cost for adults is choosing to spend free time playing video games, watching television, or at happy hour. Trading possibly productive hours for non productive hours represents opportunity cost.

Not all time away from paid work is wasted or inherently unproductive. Similarly, time spent conducting paid work is not inherently productive. I define productivity as forward momentum in life. If I am measurably further ahead in my mental health, physical health, personal relationships, or financial health, I count myself as having progressed.

While most adults likely to do not have a full understanding of opportunity cost, I think we all have some level of ingrained intuition telling us that our time is not always being spent well when we are in the midst of System 1 activities.  It’s a feeling we get that tells us

“I’ll put off mowing the yard, washing those dishes, cooking at home, fill in the blank.”

Those thoughts are kissing cousins to

“It would just be better if I hired someone to mow the law, clean up around the house, grab take out on the way home.”

Hiring others to do your yard work.

Triple Billing

In the preceding examples, you’re actually paying two or three bills. You’re missing out on the opportunity to expand your mind through rich audio content, you’re physically paying someone to perform a service for you. and you’re missing out on the associated health benefits (manual labor/healthy cooking).

Tying it together, our brains are typically on autopilot (System 1 thinking) when we are conducting the less pleasant but required** activities of life such as commuting, cleaning, and even going for a long walk or run.  System 1 time equates to opportunity time!  If you are currently filling your System 1 time with nothing, or possibly more costly than nothing AM/FM radio, you’ve got quite the opportunity cost bill stacking up!

Rock n Roll Ain’t Noise Pollution

But how pray tell should I fill my autopilot time? Podcasts and audiobooks are two potential solutions.  Before explaining further, I’ll take a moment to address the role of personal music (not from the radio) and its position in the high value, enriching content vs. terrestrial radio noise debate.  I’m not willing to go on record disparaging a grown person who wishes to crank Maroon 5, Lil’ Wayne, or Toby Keith on the way to their pilates class. Actually, yes. Yes I am. But that’s a separate article.

Big picture, music definitely has its place in all of our lives. The exact ratio of time spent listening to personal music compared to podcasts and audiobooks is always an individual choice. For me, I break it down by System 1 and System 2 time. When I’m engaged in deliberate thought such as while writing this article and during my day job, its all music all the time.  The minute I hop on my bike (the pedal kind) for my commute, the podcasts start flowing immediately***.


I personally get my podcasts using the PocketCasts app on my Android phone, although there are many, many alternatives.  As you’ll soon find out on this blog, I’m no fan of the Apple cult, but I must give Mr. Jobs his due. Apple’s pioneering of the podcast and surrounding digital architecture were foundational to the modern state of podcasting we currently enjoy.


I’m not too dogmatic about the podcasts I listen to as long as it hits one of these criteria.

  1. I know little to nothing about the topic and want to expand my horizons.
  1. I am a passionate aficionado on a topic and I want to deepen my existing knowledge.
  1. It will make me genuinely laugh. If I make it through a “comedy” podcast without an uncontrolled outburst of laughter, I’m probably not coming back.

Look for a follow up post on my top 10 podcasts to check out first. There are literally thousands of podcasts. It can be all too easy to fall into decision paralysis without your own set of screening criteria.

Free Audiobooks

I initially used Amazon’s Audible service for audiobooks. For about $20-ish a month you can select 1-2 books and get a decent discount on purchasing additional books. I ended my Audible subscription quick, fast, and in a hurry the moment I learned about Overdrive.  When public libraries across the US order physical copies of books, they typically also purchase digital copies of the book. Most libraries use Overdrive to manage their digital licenses and loan them out to patrons.

Look for the Overdrive app, or its more user friendly cousin the Libby app in fine app stores everywhere. The key to the Overdrive system is using as many library cards as you can lawfully get your hands on. If you have access to a local library, county library, and university library, add all three for maximum selection. I occasionally come back to Audible for purchases if the book I’m seeking is not available from my four libraries.

Staying Connected in a Positive Way

As a large caveat, optimizing the soundtrack to every moment of your day can certainly have its own distinct drawbacks. Using earbuds frequently at home may make it harder for others to engage you in conversation. Having to ask your partner to remove an earbud before every conversation isn’t ideal. It’s a dichotomy. One suggestion for achieving time optimization while avoiding isolation from others is to put the earbuds away.

Go ahead and play that economics podcast or history of the civil rights movement audiobook from a speaker in your kitchen. I know that despite my kids surface disdain towards the majority of my preferred listening topics, exposing them to the content has resulted in some truly inspiring discussions around the kitchen counter.

What are your thoughts? Do I owe Mr. Seacrest an apology?

*All hail National Public Radio. All derogatory comments about radio made above do not apply to NPR. I count NPR in the same category as podcasts and audiobooks .

**These are just examples. I fully understand that many people truly enjoy these tasks.

***Calm down Safety Steve/Susan. I only use one earbud so I can hear traffic.

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