- in Savings
Slightly Used = Millionaire….
Why, if you have credit card debt, would you buy a new pair of skis and bindings for over $1000 if you can buy demo skis (that have been used about five times) for $400?
If you don't have at least $1 million in assets, why would you spend $50,000 on a new truck when you can find a great used car for under $15,000? For most people, the $35,000 difference is more than they will be able to save in several years. Is working for many extra years in a job you are so so about worth that new truck? If so, have at it!
So buy used stuff where you can. Buy slightly used cars in good condition. Buy used musical instruments. Use Craigslist. This isn't hard, people.
My theory as to why people don't do this is because they somehow have a sense of lack floating around in their subconscious and are trying to prove to the world they are "rich" and have "made it" by buying shining new things. Much of this behavior stems from how people grew up. But we can let this go…
Who has true wealth? The guy with seven figures in assets and lots of flexibility in his life, or the guy financing the appearance of prosperity, buried in debt, and under serious financial strain.
There is a whole investment thesis built around people purchasing small luxuries to signal status. See this link if you have an interest. Why else would people with a negative net worth buy a $800 phone? That said, it's better to buy a fancy phone for $800 than a car you can't afford for $50,000…..
Bonus links: How to easily buy a used cell phone. Also, why you should seriously consider only buying used cars.
Wise words! I am financially independent with a paid for house and no debt at all and could buy any car I wanted. But I’m driving a $7,000 car I bought a couple of months ago and my wife is driving a 2006 vehicle and we just do not see a big reason to drive fancy new cars when our older ones work just as well. They drive great, they look great and we are not trying to impress anybody with them. Although somebody did think mine was a 2018 the other day. I thought that was hilarious since it is a 2008 model, but it does still look new!
When you know you are wealthy (however you want to define that), you don’t need to try so hard to prove it to the world. As usual, Mr. Ark has it figured out ;).