We all dream about the things we would buy if we were financially secure. Those daydreams we have when we get wealthy are usually thoughts waiting to unravel when we get the chance. Psychology says that people spend money for the feeling of being in control. Big purchases, so, therefore, would mean power. That’s why we always have that longing for expensive and luxurious things.

If given the money, some of us would buy a sports car worth more than a home, others would buy mansions with more bathrooms than entire apartment complexes have. And then some of you would buy a watch that would cost more than a year’s salary.

If these are the things you dream about owning if you had the money, it’s probably also the reason why you don’t have any wealth. At this stage, you might be spending on things beyond your financial capacity. Or whenever you have the money, you immediately buy stuff off your bucket list. That’s not wise spending. Making poor decisions about the things you buy is in no way going to make you wealthy. Smart investing will and over a period of time you’ll be able to accumulate wealth.

So, we have made you a little reference for things you should avoid buying even if you have the means. Try to use this as a guide on your other spending. Being financially secure takes a lot of good decision making and that includes not buying the following:

1. Gaudy Jewelry

Tasteful jewelry can do wonders for your appearance and exude beauty and confidence. But if you are sporting a necklace worth in excess of, say, $10,000 and other expensive jewelry, it’s just like flushing cash down the toilet. Be classy, not brassy.

2. A Big Boat

So you plunked down a huge chunk of money on a big boat. Now what? Realistically, how often are you going to take your boat out on the water? If you are taking your boat out on the water fewer than 50 times a year, this is a bad purchase.

In fact, you continue to lose money on this deal because you are paying to have your big boat stored all year long.

Horizontal Banner

3. Live-In Help

We get it, you hate having to clean your home. A lot of people hate housework and would rather pay someone else to do it. This is fine unless you are paying them to live with you as well. In addition to being a huge waste of money, it would be rather awkward having somebody standing around in your kitchen waiting for something to do.

4. Expensive Clothes

Just because you can afford to buy a pair of jeans for $1,200, it doesn’t mean that would be a smart move. If you think people will think better of you in an expensive pair of jeans over a $50 pair of Levis, you are sadly mistaken.

5. Sports Car

We are sure many of you would be impressed with a car that is capable of going from zero to 100 MPH in six seconds. Of course, this is hardly practical when all you use your car for is to drive the kids to soccer practice and then go to the store. There is nothing wrong with owning a nice car, just keep it reasonable and practical. Unless you are Lewis Hamilton or Lance Stroll, then don’t sport a race car.

Conclusion

And this list goes on and on… The most important rule to follow? Stop spending on things, especially on luxuries you don’t really need. Even if you have the money at the moment and are capable to buy expensive things, then think about it again. You better invest your hard-earned money somewhere else more fruitful and productive.

With a little help from Daisy Raouph, your financial advisor in Pickering, and some smart investing, you can accumulate enough earnings to enjoy financial freedom. And it helps a whole lot when you do start earning money that you don’t blow it on frivolous items.

———-

Daisy Raouph, CLU, CHS, specializes in mortgage financing solutions and financial services. A Mortgage Broker and Financial Security Advisor with over 30 years of experience in financial services. Contact us today to review your mortgage financing options. We can help!