There’s a very interesting quote by Robert Kiyosaki, author of bestseller ‘Rich Dad, Poor Dad’. This American entrepreneur says: “The world is full of smart, poor people.”
That’s right. A lot of people that are smart tend to be poor because they spend money on buying stuff they don’t need. That’s because they lack money management skills.
However, people who are good with money management, spend money wisely. In fact, there’re lots of things people who are good with money never buy. Not because they can’t afford the stuff. But they understand frivolity of splurging their hard earned money and instead, find better uses for it.
So, what are the seven this that people who are good with money never buy? Some research on the Internet proves that smart people that have money shun spending on these things.
7 Things People Who Are Good With Money Don’t Buy
Let’s look at the most common stuff that people who are good with money don’t buy. Instead, they buy stuff that gives value for money.
1. Expensive Clothing
All of us love to dress well and we usually do that to impress others. Fair enough. Often, we go and splurge on designer labels and top brands. We falsely believe that wearing branded stuff would impress people.
In stark contrast, people who are good with money never buy expensive clothing. Because they’re aware that fashions and trends change every season. That expensive suit or dress you buy today will be out of fashion within a year. Meaning, you’ll have to spend again on buying another later.
Instead, people who are good with money prefer quality over prestige. They realize that clothing goes out of fashion and spending heavily is wasting money. Instead, they buy reasonably priced clothing that’s made of superior material.
2. High-End Vehicles
Another thing people who are good with money never buy are high-end vehicles. That’s because they understand that price of a vehicle- regardless whether it’s a motorbike or car, depreciates almost instantly when you take delivery from a showroom.
Try this yourself. Try selling a car that you buy today, just a few hours later. You’ll experience what I mean. The buyer will offer you much lesser than the showroom tag price.
Furthermore, the older a vehicle, lesser its resale value. If you calculate the final price you’ll pay for a vehicle if you’ve taken it on loan, the cost works out even higher when we calculate the interest. And returns definitely don’t justify the investment.
Instead, people who are good with money buy ordinary vehicles that suits their needs and doesn’t really cater to prestige. They believe that a vehicle is just a utility like any other.
Buying a simpler one costs lesser and they don’t lose much while reselling. Often, people who are good with money go for pre-owned vehicles without loan. That’s because they wish to save those extra Dollars that would otherwise go as interest or Annual Purchase Rate (APR).
3. Expensive Gifts to Impress
Expensive gifts merely to impress someone is something that people who are good with money never buy. They know that an expensive gift often doesn’t get the appreciation it deserves. Or, the person may have little or no use for this expensive gift. Often, an occasion or situation also doesn’t merit an expensive gift.
Instead, people who are good with money try and find what would be useful to the person whom they’re gifting. And they buy only good quality stuff from reputed manufacturers rather than going for chic, niche products. Hence, their gifts usually receive more appreciation that something expensive.
If you’re gifting a business associate, it’s understandable to buy an expensive gift. That’s because you stand to gain more by giving something pricey to a business associate.
And of course, that gift is a representative of your company. However, for day-to-day situations, expensive gifts are something that people who are good with money never buy.
4. Life Insurance
You’ll be surprised or even shocked, people who are good with money never buy life insurance. That’s because life insurance isn’t an investment.
They know that money that goes as life insurance premiums definitely fetches better returns elsewhere. In stark contrast, money put on a life insurance plan tends to depreciate over time due to something known as ‘Time Value of Money.’
Instead, people who are good with money invest on stocks, Mutual Funds and other plans that provide higher returns.
They are aware that heirs will get much more money from such investments compared over a life insurance plan. Understandably, they might not shun life insurance altogether. However, their spending on a plan will be very limited.
5. Imported Foods
People who are good with money never buy imported foodstuff just because it shows they’ve refined tastes. They are well aware that exotic imported food costs several times more than local varieties.
Of course, they might spend a little more on buying organic food for health reasons, but never anything from foreign countries.
Instead, they prefer buying their groceries online and prefer American products. That’s because local foodstuff is fresher and from known sources.
Buying online also helps them save money due to discounts while helping avoid trips to a store that would increase their gasoline bills. People who are good with money also ensure they use discount vouchers, coupons and codes to stretch their Dollar to the maximum.
6. Unwanted Cable TV/ DTH Channels
Cutting the cord, as it’s known as, is getting quite popular in USA and people who are good with money are leading cord cutters.
They’re eliminating unwanted TV channels from their cable TV and DTH packages. Additionally, they’re also using various technologies that enable them to view TV channels they want at lower subscription rates or even free.
Just in case you’re unaware, most Americans spend hundreds of Dollars every year on subscribing to TV channel packages just to watch a single favorite show. That’s because cable TV and DTH providers cleverly blend their packages with popular channels as well as those with lower viewership.
While you may be paying for a package of 20 channels, it’s likely you’re viewing only two or three. Hence, people who are good with money never buy such TV channel packages.
7. Expensive Homes
And finally, expensive homes is yet another thing that people who are good with money never buy. Understandably, owning a home is a dream for almost everyone around the world, at whatever location they live.
The same adage holds true for Americans. People who are good with their money are aware that buying an expensive home means paying hefty mortgage. And mortgage involves interest too.
Instead, people who are good with money buy excellent homes that suit their needs. And they set aside some money to buy a retirement home as well.
They invest on a home to retire quite early because they don’t wish to be encumbered by mortgage during those golden years. Hence, often you’ll find people who are good with money buy two homes instead of one, though not necessarily at the same time.
Money can’t buy happiness, as the old adage goes. However, shortage of money means you’re actually inviting woes and buying sorrows. Hence, there are quite a few vital lessons to be learned from people who are good with money and find what they’ll never buy.
Charles A Jaffe, a famous author says: “It’s not your salary that makes you rich, it’s your spending habits.” Rightly so. Because spending without control or splurging for prestige won’t get you anywhere in life.
Even billionaires are careful about what they spend on. You wouldn’t see a billionaire paying for that very expensive flacon of vintage wine merely for prestige. Hence, following these habits of people who are good with money can make you rich too.