Remember Rich Uncle Pennybags? He’s the mascot from Monopoly. Top hat, monocle, sacks of cash. As kids, he might have been the cartoonish dream for some of us, the ultimate image of what “rich” looks like.
Obviously the reality is different, and our dreams mature as we do. Clients, in our conversations with you, it doesn’t seem like his life or image is the one you’re pining for.
But there is one surprising realization about the life of the “rich”: it is usually much, much less expensive to be rich than to be poor.
Why? Having money enables us to live more efficiently and avoid many painful financial pitfalls.
To begin with, credit may sound like a bargain—after all, you’re getting more money now than you otherwise could spend! But there really isn’t any such thing as “cheap credit.” If you are able to lay down cash for major purchases, you don’t just save on fees and interest: you may even be able to negotiate a better price.
If you are funding large items on a credit card, you are likely to wind up paying many times what they are worth. If you find yourself in a spot where you need to turn to high-risk credit in the form of payday loans, things get even worse.
There are other ways that having money allows you to stretch your resources out, too. Buying quality merchandise may take more money up front, but the alternative is buying shoddy products: if you find cheap furniture that falls apart every year or two, you’re still paying to replace pieces more often. You may save money in the long run by paying more up front. (Of course, care must still be taken to select your purchases carefully: higher cost does not always correlate to higher quality!)
Also, when you have a life of plenty you have the luxury of being able to shop around and wait for a better price. The rich get to be rich in time, too. Be a little choosy, not cheap.
These habits are ones that all of us can use to help us build and maintain our own wealth.
The wonderful conundrum that some have discovered is this: the less you spend, the more wealth you accrue; the more wealth you have, the less you need to spend.
Clients, write or call when you’d like to talk about what this means for you.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
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