94% of millionaires spend money less than they make. Because the only way to build wealth is through saving and investing, at least to the point where your investments can cover your bills. That’s the moment when you can call yourself financially independent. Because at that point, you are no longer accountable to anyone. Whether you keep your job or quiet, you can still keep the bill collectors far away from your doors.
But the only way to reach that position is through carefully managing your money. Just ask yourself, how much money has gone through your hands? I don’t just mean physically but through your bank accounts. How much have you received throughout your entire life? A lot. Now the next question is: how much is left in your hands? Probably not much, right?
You have spent the vast majority of that money. Most of it has been spent on your necessities, but a big chunk of it was wasted on stuff that doesn’t matter. They probably didn’t bring any value into your life. I understand because I have gone through the same thing. I have wasted a lot of money on unnecessary things. If I would go back in time and managed my money a little more effectively, I would have become financially independent way sooner, so here are the 7 things I regret wasting money on or seven things that I will probably never buy again.
7 Things I Won’t Spend Money on Again
If you have ever owned a car, you probably know how expensive it is to have a car. A lot of people who drive don’t know exactly how much their care costs. The average monthly payment on a new car was $575 in 2020. But that’s far from the true cost of owning a car. That’s just your monthly payments without taking into account insurance, gas, and especially maintenance. What I also realized when I got my first car was how often I began to drive. I started driving everywhere, even when it wasn’t necessary. Gas is not cheap, and being stuck in traffic every day can cost a fortune. Most people don’t realize that because most people don’t pay attention to that.
Just a little disclaimer, if you are living somewhere where public transport is not an option, where you have to take your kids to school, where a car is an absolute necessity, then you probably need one, but if you are single, for god’s sake, save that money and invest it. You will thank me later.
2. Pricey personal care products
I am the type of guy that loves taking care of himself. Not to the extreme, of course, but looking good is on my list of priorities. I tried multiple skincare products, from a Scrub to a Wash to a moisturizer. And after using multiple products, I have realized how overpriced these products are.
Number 1, most of them are pretty much the same. They are produced in the same factories in china but are sold under different brands based on how popular they are there. The ones that cost 20 dollars are not that different from 100 dollar ones. The beauty industry has the highest possible margins in the entire world, so don’t let these companies fool you to pay 100 dollars for something that you can get for a fraction of that price.
3. Spending money on impressing people
Back when I was in school, my self-esteem was low because I was doing poorly in school, but as social creatures, we want to be respected by the people around us. We want to be valued because we have so many insecurities. And often, when we don’t know how to solve these insecurities, so we spend money to show everyone that we are as good as them. Why do you think people buy Rolex watches.
Let’s be honest, a Rolex watch is solving one problem, which is telling the time, but even Rolex holders often use their phones to take a look at the time. But people still spend dozens of thousands of dollars on them because they have successfully branded themselves as a luxuries brand that is worn by famous people like Cristiano Ronaldo,
Tiger Woods, or some Hollywood actors. So we buy them to send a message to people that – look guys, I make a lot of money. I can afford a Rolex.
Most people buy that kind of watch to impress people, which is not a problem if you can easily afford that. But if you barely can afford a BMW, but you still decide to buy it, then you have just thrown yourself into a huge financial problem. I gotta admit, I did it a few times, but the reality is, people, don’t care. Yes, they might say – WOW, but that’s the end of it. They won’t respect you more or value you. If you have insecurities, you have to face them and solve them and not simply try to hide behind expensive toys.
4. Investments I am not sure about
In my almost eight years of experience in the stock market, I had tried everything, especially when I started. When you know just a little bit about something, it feels like you have figured it out all only to find out how little you know. So I invested in companies that I barely knew what they were doing. Sometimes I was lucky, which boosted my confidence, but other times, the stock just went down dramatically in the next few weeks. I have tried following famous investors, but that also ends up badly. I remember when I just got into real estate, after reading books, watching other people, I thought I knew what I was doing, but I lucked experience, so I ended up getting in a few bad deals.
So one thing I will never spend another penny on is investments, I am not sure. I would rather let my money slowly be burnt by inflation and wait for the right opportunity than just lose it all. Warren buffets the first rule of money, which is – don’t lose money. When I came across that advice many years ago, back when I just started, I thought he was fooling around because it’s so obvious, but when you get into the world of investing, losing money becomes so easy that sometimes you don’t even realize how the money you barely saved in the last few months suddenly disappeared.
5. Extended Warranties
One of the useless things you can ever spend money on is extended warranties. Let me ask you a simple question – how often do you use warranties? It doesn’t matter what kind of warranty it is. Even if it breaks down, you usually just forget about it because it just doesn’t worth the time to go back to the store, stay in line, spend a ton of time just to figure out if you can fix it.
On top of that, they will tell you that – the warranty doesn’t cover this kind of damages, but it provides you with a 30 percent discount which will end up costing half the price of that thing you have purchased.
Or what I like the most is when you are buying something that has a 1-year warranty, and they offer an extended extra year warranty. It sounds reasonable to get it, if something goes wrong, you can always come back, and they will fix your washing machine, but the reality is that if that washing machine perfectly worked for an entire year, then it probably doesn’t have any factory damages that your warranty can cover. Any other damages that the machine is going to have are most likely not covered by that extended warranty. That’s one of the ways stores make fortunes because it sounds like a good financial decision to pay an extra 50 or 100 bucks and get an extra 2-year warranty.
6. Energy drinks
As a former fan of energy drinks, it wasn’t easy to stop drinking energy drinks. I got addicted at some point since I was drinking a couple of energy drinks a day, but then when I found out how unhealthy and useless these drinks are, I did everything possible to get rid of that addiction. How much do you think a 4 dollar red bull costs to produce?
Let’s put aside marketing, R&D, and the rest. It costs around 20 cents to produce that energy drink since its water is mixed with caffeine and many unhealthy ingredients that cost nothing, like 50 grams of sugar. The only reason they cost so much is that they spend billions on marketing, paying celebrities to endorse their products, and on top of that, they make around 50 percent profit on every can sold. So energy drinks are one of the best ways to waste money and destroy your health.
7. Useless online courses
Let me be clear about online courses. I am at the same time both a big fan of online courses because I do spend money on these courses since if I want to learn something, I would rather spend 50, 100, or even 200 dollars on a course instead of repeating the same mistakes that others have done and waste my time. In my humble opinion, online courses are one of the best inventions of the internet because you can learn any skill for a few hundred dollars, but many people have misused this tool by creating worthless online courses and selling them for astronomical prices where you learn nothing more than what you can get from a simple YouTube video.
Over the last seven years, I have spent thousands of dollars on online courses to save myself time, so I can confidently say that there are a lot of useless courses. Before you buy any course, make sure you do your research. I have made an entire video about online courses. Go and check it out if you want to learn more.
But if the course provides you with valuable content and it’s fully animated, short, straight to the point like this course on the stock market, then it is worth every dollar you pay for it. Not because I have created this course, but it’s the course that will teach you the basics of the stock market and will help to learn how to analyze companies to make better investing decisions.