These lessons can be handy. Read them over and see if they are already obvious to you.
Never try and gamble your way to wealth! A recent article described life in small lower-income and rural towns in the U.S. where the average household lives paycheck to paycheck and frequently encounters medical bankruptcies, and almost everyone in town buys a TON of lottery tickets every week. But, you know: “You gotta play to win,” “When my numbers finally hit, I’m gonna really change my life”… and other tragically misinformed nonsense. Interestingly, the same phenomenon happens all across Las Vegas and on every cruise ship on the planet: people are feeding their hard-earned money into the slots and cashiers of these rigged games. These people also believe in the superstitious concepts of luck and magic numbers. They don’t exist! You never, ever gamble if your goal is to build wealth and experience financial freedom. It’s as simple as that.
“In my experience there is no such thing as luck” – Obi Wan Kenobi
Don’t buy stuff you can’t afford! A common refrain from people with higher incomes and virtually no savings is, “I can afford it; I deserve it.” Let me offer a reminder. If you are in any sort of debt, you probably can’t yet afford it. If you still have to work for a living, and would prefer to have a choice in the matter, you probably can’t yet afford it. We will all break this rule from time to time when something is really important to us. But in is a terrific guideline. This guideline helps you avoid things like buying a brand-new car or that $1,800 espresso machine on credit.
Buy used! Let someone else take depreciation on the chin
Don’t buy stuff you don’t need! Let’s really think about what it means to need something. This is a more gentle version of the above and affords you the perspective to view material objects as a burden; will its benefits outweigh the burden. We have all indulged the fantasy and felt the temptation to purchase something because we are somewhere fun and away from home. We all remember the last time we went shopping. We also all know how much “cool stuff” is in the basement, attic, closet or put away that we will never use yet still can’t seem to part with. Instead make a list of replacement parts for you to go “shopping” for. The lawnmower spark plug, the vacuum that will die next year, the hiking boots that will need to be replaced by next season, or the wooden kitchen spoon that finally broke. When these items become urgent you don’t go shopping, but you do go on a targeted mission to replace that item. Just to be clear: stay out of gift shops.
Put the important stuff on automatic! I am always flabbergasted by the ubiquitous piles of opened bills laying on peoples dining room tables. It’s 2020 and you are still paying bills by mailing in checks before the due dates. This is crazy! There is no benefit to paying your monthly utility bills manually. Why waste your time and risk a late payment? Your recurring monthly bills and credit cards need to be set to automatically pay themselves.
- If you don’t need it – don’t buy it
- If you can’t afford it – don’t get it
- If you eat out a lot – stop it
Never, ever think of restaurants as a food source! Look, I love food, I truly do. I love to eat it and I love to cook it. And, I love eating out as much as the next person – maybe more so because I appreciate the decadence of a good meal. But I marvel at how often families depend on restaurants as their daily nourishment. You are renting a building and paying servants to prepare your food and serve you and your family. The world is not your personal buffet. This mindset is a trap that will ensnare you and impoverish you. The easiest and simplest way to save money is to stop eating out. Restaurants are for carefully planned experiences with good friends.
“Your eyes can deceive you, don’t trust them.” – Obi Wan Kenobi
Windfalls are for buying freedom! Everyone working individual will experience an unanticipated financial blessing or “lucky” break or two in their working careers. A larger bonus than expected, a raise or promotion, or an insurance settlement from the power line that fell on your truck. A financial gift from a friend or an inheritance from a great-uncle. Most people however promptly go and spend these windfalls on stuff they don’t need. I mean, do you really need an eleventh pair of denim jeans or a brand new car? No! When you receive a windfall, you need to promptly put it towards your highest-interest debt, or your mortgage, or your index fund, or your next rental property. Never, ever, ever inflate your lifestyle when you have not yet achieved a debt free and financially independent lifestyle.
What are your lifestyle tips or financial nuggets that should be obvious and powerful yet may often be overlooked? Comment below.
