Are people who buy things for cheap rich?

[The motor guy]

You have the people who spend 80K on a brand new SUV then you have the people who go out and buy a 1995 Toyota Tacoma and spend $500 on it and drive it for 5 more years only spending maybe a couple more thousand on a few maintenance items. Me personally I like to things that are good to begin with then take care of them for a long time and hopefully get many years of good service. This pretty much goes for anything. Honestly every time I try to be cheap I just end up spending more. I prefer to spend more and just be happy for the long run. Does this mean I paid too much? Yes, sometimes but it is what it is.

 

[The motor guy]

Sometimes I just can't help but think man this guy bought a house for 50k drives a truck that he paid $400 for I know he works and makes good money. He must be freakin loaded. lol I suppose some people like to keep the money in the bank vs showing it off in real life.

 

[dogememe]

Originally Posted by motor_oil_madman
You have the people who spend 80K on a brand new SUV then you have the people who go out and buy a 1995 Toyota Tacoma and spend $500 on it and drive it for 5 more years only spending maybe a couple more thousand on a few maintenance items. Me personally I like to things that are good to begin with then take care of them for a long time and hopefully get many years of good service. This pretty much goes for anything. Honestly every time I try to be cheap I just end up spending more. I prefer to spend more and just be happy for the long run. Does this mean I paid too much? Yes, sometimes but it is what it is.


That's a complicated question (or is it even a question, perhaps more of a conversation point), I think there is a balance.

Every day I interact with people that have expensive new vehicles and want the cheapest everything. They have a 2016 Mercedes and complain that the cheapest cabin air filter is $20.

I also have many customers that have really crappy old cars and they only want the best. We have a regular with a 98 Malibu and he always buys Mobil1 EP oil with a Mobil1 filter and he changes it once a month. It's memorable because it's so bizarre.

At the end of the day both of those people have a car to go from Point A to Point B, they just do it a different way.

 

[Zee09]

Funny, the richer I get the cheaper I become...………
Must be common sense kicking in...……
If you live for any length of time after you retire, you better be loaded.
My last day at work is the day of my funeral...……...

 

[maxdustington]

It depends on so many things, but value has different meanings to different people.

That 80k SUV might be a good value if the person wants to look rich, maybe that is important for their job (sales). Maybe they are leasing it and writing off the payments, etc. My parents drive old cars but travel, we knew families who bought cars instead of traveling. A lot of people just like having new cars as a way to show themselves and others that they have made it.

If you want to do things for cheap, you have to have insight. A mechanic can buy a cheap car and fix it for cheap if it breaks. A normal person would get nickle and dimed if they bought an old car that needed work. A carpenter can turn a fixer upper house into a dream home that normies can only fantasize about on TV.

I understand what you mean, sometimes you try to do things on the cheap and then it blows up in your face. Sometimes you have to learn things the hard way, but that only improves your skill set and gives you more insight. However, if you have insight/ a specific skill set, you should be leveraging that to make money/not pay a much for things as a normie.

 

[StevieC]

My friends all belong to the mortgage poor club with monster mortgages that they might pay off in 30 years. Key word might. They also pay monthly for $40K vehicles. They never have nickels to rub together and have no plans on saving for retirement because there isn't enough money left over at the end of the month for them.

I'm the same age as them and have 2 houses paid for, one is a rental property that now funds my retirement savings and my work income is mostly put into savings and pays our monthly bills along with my spouses income. My vehicle, gas and repairs are also paid for by my employer so I don't have that expense and despite that I don't have a second vehicle in the driveway because my spouse doesn't need one to get to work. There is also no parking at that employer either.

The way I did it? Spending my money wisely, working hard, saving for tomorrow, and buying in a less expensive area with the goal of buying a second house in mind. While my friends were all taking expensive trips, buying expensive vehicles and going out to expensive restaurants I was being more conservative. Sure, I enjoyed life then but on a reasonable budget. Now I benefit because of those choices I made early.

Financial advisor says we could retire at 55 more than comfortably with the same really good income between the both of us that we have now. It's a good feeling because that is only about 18 years off.

Was I cheap? No, was I smart, yes. There is a difference. Anyone that tells you that you can save your way to prosperity doesn't understand how money works. You need to make your money work for you. Buy assets that appreciate in value and/or that generate income. Most people think assets are things like their vehicles. That's the biggest problem.

 

[JeffKeryk]

Cheap is relative. I suggest thinking long term.
I live in Silicon Valley; many say it is too expensive to live here. Wrong!
Well, my house seemed expensive when I bought it, but man has it been a great investment.
Now we have 3 bought and paid for.
The opportunity here is incredible.

Wanna be rich, or at least secure in your retirement?
Invest the 1st 20% of your earnings. START NOW!
That worked for me, and I started very late because I joined AA at the age of 33.

Beyond your investments, if you wanna reward yourself with a quality car, I say go for it.

Here is my personal rant:
I believe no one should get outta 8th grade without a basic understanding of a checking account and credit, especially credit cards.
No one should get outta high school without a strong understanding of personal Finance.

 

[Andrew1972]

Vast majority of people don't get rich going into debt buying vehicles. There are many people who make a regular living but end up rich in terms of debt free and millionaire +.

A poor person buys the $40k - $80k SUV going into debt but cannot afford the maintenance easily or a major vehicle repair so they start the cycle over sometimes carrying debt into the next instead of putting money into it (I see it here the nickel and dime)

A rich person buys the vehicle they can afford typically used for a fraction of the price CASH. They repair/maintain the vehicle with cash. If the vehicle is junk they say who cares and spend more cash on a used or reasonable new vehicle. Also they have access to cheaper mechanics who take longer but have an extra vehicle in their fleet to drive. This is my parents who are multi millionaires driving a 2000 Forester, 2000 Tundra and first car with keyless entry

a 2018 Outback. They never took a loan except first home for 8 years. We have access to a very honest but slow mechanic who charges $60/hr instead the prevailing $100-$125/hr locally. I saw we because I borrow their third vehicle when mine is down.

 

[HangFire]

A few thoughts on being cheap and being rich.

Many people have found that by challenging the first price you get, you often (not always) get a better price, or at least more options across a price spread. After learning that, challenging all first offers becomes reflexive. This is particularly true where people don't know what something should cost. It's their way of probing a better price without putting in the actual research. Everything becomes a negotiation.

Just because someone drives a $60K Mercedes doesn't mean they paid $60K. They may have put the salesman through [censored] negotiating something less, more for their trade-in, etc.

Pick a profile of who does what, and you can find people that fit in it. There are very few, broad things that can be applied to the rich, or at least, the rich that stay rich. Primarily, their revenue exceeds their living expenses, at least most of the time. The smart rich (those that stay rich) are keenly aware that, how they play it out depends on individual personalities.

 

[BMWTurboDzl]

Originally Posted by motor_oil_madman
You have the people who spend 80K on a brand new SUV then you have the people who go out and buy a 1995 Toyota Tacoma and spend $500 on it and drive it for 5 more years only spending maybe a couple more thousand on a few maintenance items. Me personally I like to things that are good to begin with then take care of them for a long time and hopefully get many years of good service. This pretty much goes for anything. Honestly every time I try to be cheap I just end up spending more. I prefer to spend more and just be happy for the long run. Does this mean I paid too much? Yes, sometimes but it is what it is.



Depends on individual needs, risk tolerance for repairs, etc.

Some people are rich only because they moved from a high to a low cost of living area OR they lived in a tough climate during their working years. For example it makes no sense to buy/own an expensive vehicle in the Northeast because the operating environment is so harsh. It also makes no sense to retire in California because the cost of living is so high.

 

[MRtv]

You can collect stuff or you can have your wealth increase. It is hard to do both well. I read a book about how millionaires think. They don't buy rolex watches. They buy Timex. They keep the money in the bank. The book was written long ago but you see how they work. Around here the millionaires shop at Walmart.

 

[Zee09]

We all need to remember there are no safe investments
I have come to learn luck plays a good part in it as well.
Just because you are fat today, doesn't mean a thing.
Even if you are a genius you can be out on the street, maybe not as fast as others but you just may end up there.

I made more money in the 80's than I do now. Now I also work harder.
The Internet was not my friend like it was for my new competition.
California? Did we forget how fast it can tank as far as real-estate?


Have we forgotten 9/11 and what came with it?

In my business it doesn't matter if I work 24/7- If my customers are belly up so am I!

Gold- yeah- the safe investment- Are you all too young to remember how gold tanked?


Of course you should save as much as you can. But in life there are no guarantees.

 

[JLTD]

Originally Posted by JeffKeryk


Here is my personal rant:
I believe no one should get outta 8th grade without a basic understanding of a checking account and credit, especially credit cards.
No one should get outta high school without a strong understanding of personal Finance.


+1; so many people are going to be destitute when SS can't pay them.

 

[KGMtech]

I am cheap on some stuff, but I also accept that no fun along the road of life just leaves too much money for the people left after I die.

I like to drive a nice car, nothing too excessive, but keep it in great shape and maybe drive it for 10+ years. I paid off my mortgage in my early 40's, been saving for retirement all along. My wife is not a high maintenance personality, she's committed to saving and nothing excessive. I enjoy DIY because I take pride in my own work, and sometimes the job is too small to attract a professional anyways.

Scrimping and saving is not something I want to be proud about on my deathbed.

 

[CT8]

. Rich is living with in your means.

 

[brages]

Buying older cars with cash and keeping them running for a fairly long time has saved our family a lot of money and allowed us to have the money to spend on things that are more important to us.

On the other hand, it means we are sometimes driving cars that aren't very nice.

Whether we are "rich" or not is a complicated question... by world standards, very rich. by historical standards, extremely rich... by USA standards, richer than average... by it's-a-wonderful-life no-man-is-a-failure-who-has-friends standards, pretty well off...

 

[Virtus_Probi]

Most people who are genuinely rich probably don't worry too much about what their stuff costs.
I have a friend whose sister married a very wealthy guy and he would buy very expensive luxury vehicles, drive them with no maintenance because he didn't have time to deal with it, and then get rid of them when they started to malfunction. He ruined one completely by trying to drive it through a flooded underpass because he was in too big of a hurry to find an alternate route.
This guy makes enough money that he's not going to go under due to consistently mistreating his high dollar rides. He is a financial expert and I'm sure he will live the high life no matter what.

One thing that strikes me is that many wealthy people I have gotten to know through my work didn't really have time to enjoy the fruits of their labor.
I remember a coworker at a previous company getting a call about a project that was in trouble and he was having a hard time understanding the other party...turned out a VP (later president) was calling from a remote cabin in Montana or one of the other big Western states and the cell reception was poor. That guy called back about that project at least once a day the whole time he was on "vacation" and he wanted details, not a gloss...and I'm sure he was doing the same thing for a dozen other projects he was worried about. I would guess his family enjoyed the trip while he spent all day working even though he was away from the office.
Probably a lot of such people enjoy their work more than anything else and feel unsatisfied if they are not getting something done...that's sure not how I want to live, though. Let me make a good living and still be able to have fun with the things I really like, that's all I really want!

 

[dave1251]

Originally Posted by madRiver
Vast majority of people don't get rich going into debt buying vehicles. There are many people who make a regular living but end up rich in terms of debt free and millionaire +.

A poor person buys the $40k - $80k SUV going into debt but cannot afford the maintenance easily or a major vehicle repair so they start the cycle over sometimes carrying debt into the next instead of putting money into it (I see it here the nickel and dime)

A rich person buys the vehicle they can afford typically used for a fraction of the price CASH. They repair/maintain the vehicle with cash. If the vehicle is junk they say who cares and spend more cash on a used or reasonable new vehicle. Also they have access to cheaper mechanics who take longer but have an extra vehicle in their fleet to drive. This is my parents who are multi millionaires driving a 2000 Forester, 2000 Tundra and first car with keyless entry

a 2018 Outback. They never took a loan except first home for 8 years. We have access to a very honest but slow mechanic who charges $60/hr instead the prevailing $100-$125/hr locally. I saw we because I borrow their third vehicle when mine is down.



It really does not have to be this extreme of a lifestyle. It takes discipline, good decisions, a bit of good luck and hard work. But you don't have to live like a peasant for 30 years.

 

[CT8]

Originally Posted by KGMtech
I am cheap on some stuff, but I also accept that no fun along the road of life just leaves too much money for the people left after I die.

I like to drive a nice car, nothing too excessive, but keep it in great shape and maybe drive it for 10+ years. I paid off my mortgage in my early 40's, been saving for retirement all along. My wife is not a high maintenance personality, she's committed to saving and nothing excessive. I enjoy DIY because I take pride in my own work, and sometimes the job is too small to attract a professional anyways.

Scrimping and saving is not something I want to be proud about on my deathbed.

Not having a mortgage payment is the greatest thing .

 

[DoubleWasp]

Very complex issue, with no simple answer. I do a lot of frivolous spending, but it is all well within my means. Even when committing to a large purchase, I tend to be a miser. Go for a leftover that is difficult to move for some reason, or just buy something that is a fixer-upper that I later actually sell for a profit. I do most of my own maintenance and repairs, or have my own mechanics or warranty to take care of the rest.

I avoid loans like the plague. I don't need them, and don't want them. I'd rather use cash to leverage a fantastic deal or an auction purchase than go to a bank. I still "use" credit, like most people to get the credit benefits, but in no way rely on it. Bought my house in the market slump and paid it off, so no problem there. I could probably sell it in the middle of another market tumble, and still make out pretty well.

There are still certain things I prefer not to engage in. Fancy clothes, jewelry, fine dining, high-ticket home decorations, etc. Such things literally feel like flushing my money down the toilet. At the end of the day, I'm still a blue-collar guy who does anything he can himself. I've not joined the pinky-extended-with-a-diamond-ring crowd.