Day By Day© by Chris Muir.


Friday, April 29, 2011

What Not to Buy If You Ever Get Rich

 A mansion und a yacht! Not!
I think I'll start a series about "getting rich".  Just for a change of pace.

I've been poking around the John T. Reed website.  He is a real estate investor with about 30 reasonably priced books for sale, mostly on real estate, some on coaching sports, and one on "Succeeding".  He also rates other real estate gurus, some of which is funny to read (although unfortunately his review of my favorite guru is cursory and dismissive).  I find his articles down to earth and sensible. 

Anyway, somewhere in there he has this article on things you should and shouldn't spend your money on if you ever become rich.  I thought it was just some sensible advice on how not to overspend on stupid stuff, whether you're rich or poor.  Because practically nobody considers themselves rich, I'd say this advice would really be for everyone, just in case you are rich but think you're poor; or in case you come by some money, so you don't waste it.

One of the things he points out that you should only ever buy as big of a house as you need.  Once you have the right size house, if you want to spend more money on housing, spend it on getting into a better neighborhood. He doesn't go into why, but I say, aside from the obvious reasons of getting away from crime or getting into a better school district, if you live in a richer neighborhood, then you will be surrounded by more successful people who will become your neighbors and acquaintances.  This may give you opportunities, both social and career.  (More about that later, that particular subject deserves its own post).

Mostly what he says is, when you finally get some money to work with, quit shopping and instead use it to reduce risk to yourself and your family from things like: fire, flood, earthquake, depressions, big lawsuits, that kind of thing.  But he also has this big chart of do's and dont's as to how to go about getting certain things you might enjoy so that you save money getting them.

1 comment:

Anonymous said...

Avoid "toys" and other depreciating crap.

I went looking for an ATV to use as a farm vehicle.....something for actual transport, haul stuff, and so on ( we have some more remote pasture where cattle have to be checked, fed, water checked, fences maintained, etc)...this purchase is a tool, not a toy.

I halfway considered new, at about 8k until I looked at the used market. You'd be AMAZED at the number of good, used ATV's out there for 1/3 to 1/2 of new price ! ( and this was BEFORE the economy went in the toilet )

The average buyer of them new, as a toy, must put about 500 miles on them, over the course of 2-3 years, then sell for 1/2 price....incredible !

I bought a large (600cc) Yamaha 4x4 with 500miles in 2004, 4 years old, all of which I KNOW the guy only drove from his house up to his brother's house ( mile away ) and around in his yard. Except for weathering where it sat outside ( another fool mistake ), it was in near new condition. He paid over 8k and sold it to me for 3500. And I could have had my choice of a dozen more off the local trader paper or Craig's List.

7 years later, and thousands of miles, it still runs perfect, only needed regular maintenance, and I finally changed the original tires out last fall, as they were getting pretty slick.

I welded up a front basket on the front rack for carrying tools/garden produce/etc, and added a receiver trailer hitch on the rear so we can pull a small firewood trailer and that thing has been a real workhorse around the farm.

I figure it's good for another 5-8 years, and by the time it's scrap metal, we'll have paid maybe three hundred bucks/yr for a dandy tool.