One of the dangers with focusing on the earnings potential of a purchase (at least for me) is the desire to buy things that I'll hold, and hold, and hold, rather than purchasing things that are actually a necessity.
For instance, I had a giant struggle with buying a new computer (which I needed) - but I knew it was going to cost me $1,000 and was caught thinking:
"Can I keep getting by without this? What if I invest it instead? I'd sure like to diversify a bit..."
But at the end of the day, I've been struggling with this purchase for months, even though I really needed it.
(...I elected to buy the computer... and it's like a giant weight is lifted off of me... so that's great)
Obviously, this isn't anything like buying a $100,000 car. But I do still sometimes struggle with the concept of using value I've earned to buy objects that only depreciate over time.
The computer, as I boiled it down, was an exception - because the things I can do with it will improve my life and my ability to create value for myself and my wife through the business I sustain with it.
But... nevertheless... it was still hard.
Great post. Always love your stuff @tarazkp
Yeah - this can be an issue for sure. I have this problem :D
When it comes to some things like a computer, if needed, it is needed - but I have been putting off upgrading mine for too long. My plan is - after Christmas! I just hope the one I have lasts til then :)
For these kinds of things though, there is also the investment side of it, as it is part of my work - so it is necessary, yet, even though I can at least claim the tax on it through my business, I keep putting it off.
At some point - bite the bullet!
Yep ... lol. EXACT same situation here. Tax write off and all. Yet... it was so hard.
Unfortunately, I still have to wait another week and a half before I get it because it's being built (almost done now) and then being sent. Ordered it on Cyber Monday. Feels like forever!