How "other people" waste money.

Question

This is more an observation as much as anything, but it also relates to the attitude many people have regarding real estate. I often read here and hear from many other sources how automobiles are such a waste of money and a depreciating asset. People are always advised to drive a cheap beater. I will acknowledge that an automobile does depreciate and can be quite expensive but many of the naysayers are being the pot calling the kettle black. Let's take the example of a couple in their 50's plus who now have an empty nest. These people are financially conservative and also somewhat financially savvy. They are also of the belief that automobiles are a waste of money and drive conservative, used cars. 20 years earlier they bought a large home in a preferred area of town so their children could go to the best schools. Their home has served them well but now they have rooms they never go into. They don't use half of the house. They continue to pay large property tax bills and insurance. Maintenance of the home and the grounds continues to be significant. Their utility bills are large as they continue to pay to heat and cool rooms they no longer use. They could sell their house and move into a much smaller house and slash their property tax, utility and maintenance bills as well as pocket a significant amount of equity tax free that they could invest. They choose to ignore all of this and continue to criticize how others spend their money while their home "leaks" enough money every year to pay for a new Mercedes and take a cruise.

Steve Vaughan · Answer

I think we all know someone or that couple that talks out of both sides of their 'mouth',

Funny they think their opinion matters enough to share and press upon us.  I don't express my views on financial things to anyone that doesn't first ask.  Then reluctantly if at all.  I nod a lot and admire their new payment (car) or gadget or whatever.  Rarely do they even ask what I do and that's fine.

I live right next to that neighborhood full of folks you are talking about.  90+% have the nice cars and boats and sea-doos and campers/RVs to match the $5-600k house.  They also work like maniacs.  I see them coming and going as I wait at the bus stop with my son going to or coming from school.  I also rarely see them at sporting events or kids' assemblies because they can't go. They are working.

Over the last few years I have hired some of their kids who are friends with my 2 boys.  We will go to one of my apt buildings and rip out carpet, install laminate, paint or mow a yard.  The parents started asking questions.  How does a beater driving, frumpy construction painter plumber looking dude have so many apts?  So many houses?  So they kind of ask and I kind of share.

My boys have mutual funds and are part owners of our apt buildings.  Their kids are sporting i-phones and designer clothes in the back of their fancy SUVs with dvd players.  We all make our choices.

Live by example.  If someone asks, tell a story about yourself.  I have said before- "When I had $87k in consumer debt and was struggling, here's what I did". If they ask. If they don't ask, just nod and smile.

Do your thing and don't worry about others little opinions, especially if they are contradictory Account Closed

Natalie Kolodij · Answer

.....You've decided based on what that the majority of people on these investor forums are living in that situation?

This is a broad, and un-founded statement that isn't really adding any value to the forums.

David Dachtera · Answer

Account Closed,

I'm sure you've heard of folks who have won the lottery and wound up dead broke again soon after. Financial savvy is rather a rare characteristic, I'm afraid.

Bryan O. · Answer

Account Closed's neighbors should do, but that's s different topic.

James Masotti · Answer

Great comments from both @Bryan Otteson and @Steve Vaughan.

I'm a car guy, but when I started getting serious about paying off my debt and building my investments I traded in my BMW for a Honda. With real estate one of my major goals is to buy a Tesla and then be like @Mark Ferguson and buy a Lotus. Do I need these things? Absolutely not, but I love driving around. I wont keep these cars locked up in a garage and never drive them...I'm going to enjoy it every chance I get. What people should and shouldn't spend money on in our 1st world economy is an endless rabbit hole. 50% of the planet lives on much less than what we would call "comfortable" yet they sustain. If you boil everything down to "sustainment" then all of American consumerism should be thrown out the window. I'm sure you've noticed very few people are willing to go that far when given the choice.

Candace Postell · Answer

Some people have different mind-sets and outlooks/perspectives on different things in life. Some people have different goals and objectives. If I wasnt a RE investor TODAY would that make me any less smarter for choosing to become one 5 years from now? I can understand your point about living conservative and modestly, but not everyone chooses to do that, and some are still financially successful. Its all about ones own personal choices and decisions in life, because they are the ones that has 2 live with them.

*As far as the naysayers, well I call them haters and that is something that just comes with the territory

Happy Investing

Stanley Parsley · Answer

I love Dave Ramsey's ideas on money

it changed my life

I don't get the 6 dollar Starbucks coffee, because I cant afford it nor because its expensive but because I don't need to look guchi

you are right in a couple of fashions

get dependable transportation and watch your pennies because they make dollars

enjoy and thanks for the post

Mark Ferguson · Answer

To each their own. Some things make some people happy while other things make others happy. There are many ways to be happy and live a fulfilling life. I try my best not to judge others and how they make money or spend money. I also do not let what others think of me guide how I live my life. When I stopped caring I became much happier and more successful. I love cars, I have many, and most of them have gone up in value.

I don't wear fancy clothes, but do I think that is how everyone should dress? No. Dress how you want to dress, spend money on things that really make you happy, and live your life how you want. If we were all the same and did things exactly the same this would be a very boring world.

How "other people" waste money.

Most Popular Reply