Tuesday, November 5, 2013

The Bitter Reality To Getting Ahead Financially

No one ever wants to be unsuccessful in life. The plan we all have ingrained in our heads is to go to school, get a job, get married, buy a house, have kids, build a nest egg, work some more then retire. We all want the good life but unfortunately it comes at a cost. Some people are able to afford it, others try to make it look like they can afford it and then there are those who have realized that it’s a pipe dream.


I know the best things in life are still free but ironically, you still need money in order to get them. Take love for instance; yes your family loves you but if you had absolutely no money, how hard would it be to find a mate, let alone have kids with them? I know if I met a girl and told her I had no money, there would be absolutely no chance of a second date! Money has become a necessary evil in this life which is why I find myself in a love/hate relationship with it. Part of me wants to sell everything and setup a self-sustaining homestead. The other wants to eventually have a portfolio with millions in it.

There are, however, millions of suggestions out there in the blogosphere on how to save and make money. I’ve also read a lot of horrible ideas like lowering your insurance premiums by limiting your coverage, signing up experimental drugs or passing on dental insurance to save hundreds of dollars per year. How about the suggestion to stop buying coffee on the way to work?! *put imaginary gun to head and pull trigger*

After writing this blog for a few years there’s one thing I’ve had to come to terms with: you can only help those who want to be helped. I also realized that in order to save money, other people would have to spend theirs.

Paying for other people’s bills

If everyone stopped picking up coffee on their way to work, then there would be a lot of unemployed people running around. I’m sure a lot of bloggers out there would have no day job if everyone followed their thrifty advice. A large majority of people like to spend their money; I believe I’ve heard them called “money morons”. It’s a little harsh but I’ve come to accept that there are just some people who can’t help but spend all the money they make. Why not, they work hard and life is short so enjoy it while you can.

We need these kind of people to support the economy by actively going to restaurants, buying the latest techno gadgets, getting their morning latte, buying lottery tickets as a retirement plan, drinking, getting tattoos, paying more for labels, hiring cleaners and lawnmowers, etc. If everyone was thrifty, the economy would collapse on itself and there would be chaos in the streets! No one is getting hurt by spending money and everyone ends up happy in the end. Once the debt starts piling up, that’s another story.

Don’t be so Cheap!

There are some who would call me cheap. Cheap according to Merriam-Webster: at minimum expense. I’ve always paid my fair share in this life and or helped out if needed. Just because I don’t desire to eat out all the time or wear designer labels does not make one cheap; it just makes them smart with their money.

I have on occasion not joined in on holidays or did not sign up for things that cost money because I knew I would not get enjoyment out of it. If you pay for something and not get enjoyment out of it, then why bother? Would a techno junkie buy a snowboard if he didn’t snowboard or would a base player in a garage/bar band set up an RRSP plan? I don’t think so!

So if spending money makes people happy, and they are happy buying things that support the economy, then really there is no one getting the short end of the stick. Life is all about choices and whether you choose to spend your money or save it, ultimately it only affects yourself. Whether your money is in the form of old cars, tattoos, knick-knacks, a big house, a room full of super hero figures, a boat, RV or a large stock portfolio; ultimately you must be happy with your decisions.

Making the most of your money

I like to think of money as life’s lubricant: it just makes it easier. By cutting out the things in life that don’t appeal to me, I am able to divert cash otherwise spent towards a more significant goal with investments. I might sacrifice some fun and instant gratification now, but that gratification will come back to me each year and further on done the road. I think the term investment is being misused these days to mean anything we put large sums of money into. For example:

If I were to spend $15,000 on a new snow mobile I’m sure I would enjoy it. Over the years the wear and tear, parts and costs associated with it would sure add up. Also the actual value of the sled would depreciate over time not to mention the vehicle needed to transport it. What brought me joy would eventually turn to dislike as the sled became a sinkhole to fix.

Now if I were to invest that same $15,o00 in a dividend stock it would be totally different. Most people would not get the same level of enjoyment out of it as they would a sled. It would just sit there in an account and would be very boring. It would appreciate in value and pay 4-5% back to me each year, and depending on the company, increase that pay out each year.

It’s tough at first to put away that kind of money and never see it, but once the dividends come in and the stock price appreciates over time, the gratification will come. You just need to be patient and diligent with your money.

Choose wisely

I don’t need a $15,000 snow mobile just like I really don’t need $300 jeans or $8 lattes. What I could do is rent a sled or buy a used one. I like paying less than $70 for jeans or even better, grab them on sale. If I really needed to grab a coffee, why not only spend $2 at a lower end chain; it’s warm bean flavoured water for Pete’s sake!

While other people spend their money as fast as they make it, I plan to be smart and spend it wisely. If that’s called being cheap then, I guess I am. I’m tired of looking out for others, trying to change their ways for the better. Whether they follow my advice to save or not, it doesn’t matter to me. All I know is, I can invest my money with a clear conscience knowing that I’m supporting the economy another way, the smarter way!

This article was written by The Loonie Bin. If you enjoyed this article, please consider subscribing to his feed.

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