The wish for ownership is endless. We do want to have as much as possible. Although we could live with a few things, we want many things in our possession. There are two ways to accommodate what we want: we can reduce our appetite for things or increase our income.
The wish to possess as much as we can is leading us to consumerism mentality. But if you are tempted to buy something, before doing so ask yourself three questions.
Can I live without it?
Is there any substitute for that?
Can I buy anything cheaper?
This approach will help you to forget things that you do not need. It will give you a chance to buy things cheaper, for the things that you really need. In reality you can get any product or service below the regular retail price. All what you need is a little effort and thinking.
Buying for cash will give you the discount.
New product is usually expensive. Buying product later will give you a chance to buy it cheaper.
If you do not spend your money on many unnecessary things you can invest your money. Return on investment can give you a chance to buy things. You money is earning the money.
Whenever you feel a need to buy something you need to ask yourself "Why?". Do you really need it? When you see somebody buying some product, ask yourself do you really need it too? Or you simply want to keep up the pace? You need to make good judgment about every purchase. You need to reprogram your brain. If you are buying things that you do not need you lose a lot. Firstly you spend your money. Secondly, you get garbage that you do not need. Finally, you could have save and invest some money that would earn money for you.
It is up to you, whether you want to be: consumerist and shopaholic or future rich. The consumerist is spending more than it earns. Therefore he borrows the money to cover the deficit within budget. Borrowing of the money is also draining budget because of the interest rates. The future rich one is spending less than it earns and invests the rest.
This is the difference in mentality of consumerist and the rich. Future rich are becoming rich from day to day. Consumerist is ending up in poverty, with a pension that can barely cover basic costs. As they get old, the rich can continue to live as rich, while poor will have to get another job – if anybody would employ them at all.
When you are making up the choice between spending and investing, think about long term effect. Whenever you buy be aware that you missed an investment potential of that money. 12 dollars spent less today can bring you $690 in 30 years if you invest them into investment fund with, say 15% return on investment. If you add $12 every month to your investment after 30 years you will have $ 83.079. If you manage to save $12 every day and invest them monthly to the fund you will have $2.526.997 after 30 years.
With 2,5 millions you do not need to worry about the retirement. You may even retire earlier if you want. The difference is only in $12 that you can daily spend or save and invest. What will be your choice?
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