Summary
Identifying needs versus wants is the first step in your path to being wealthy. Second is finding good value and utility for the things you purchase.
“A luxury once experienced becomes a necessity.” – Martin Hurlburt.
Related Topics
When to Buy
- Item is a need.
- It is essential.
- Get a lot of utility out of it.
- Best to buy when you can get discounts; if not, it’s okay to purchase the item.
When to Borrow or Rent
- Very limited usage. Once or twice a year usage.
- Testing the product to see if you like it before purchasing.
- Rent what depreciates.
When to buy wants: Note that the bullets below are only considerations.
- Delay. Wait for 30 days and ask yourself if you still want it.
- Only if you already have the passive income to support it.
- Or if the cost of buying and maintaining are insignificant relative to your total income.
When to avoid purchases
- Avoid buying things that have a high probability of being stored in your garage.
- Avoid impulse purchases. If you didn’t plan on going to the mall but you ended up being there anyway, do not buy anything. Tell yourself, your wife or kids: “Let’s study it out first and let me think about it.”
- Avoid those that appear of good value but does not necessarily relate to what you do in life or you just do not need it.
I would be very interested in your thoughts on how you spend your money