I have a friend who has always been frugal with his money. He always considers buying cheap things and saving money, which is great, but to me, it isn’t perfect because most of the things my friend ends up buying with his frugal lifestyle are things that have no value in the future. He doesn’t invest his money and later when he wants to spend his money, he doesn’t spend on things that have futuristic value. Recently when he considered selling one of his properties they have lost value and he was forced to spend half of his savings, that was what I was warning him about.
Most times is not about how much you can save but about what you can use with your savings. Most people believe that savings are all it takes, but it’s always more than that. If you want to be financially stable it is good to save, but it is also good to know things to buy with your savings. The major difference between rich men and poor men is that most rich men invest in things that have futuristic value and they don’t just buy things that are cheap because most people consider buying cheap things instead of going things that we worth more in the future. Most people believe buying expensive things is always a waste of money, but it is not always like that when it will be worth more in the future.
Price is just an illusion and value is where power is
What most people get wrong is that value is way more important than the price but most people focus on the price instead of value. My friend who has been saving for a long time Mainly focusing on the price as long as it’s cheap is going to buy, and this is where most people make the mistake of believing that Cheap things are always right to buy, but it’s not always the case. Cheap things indeed give you the ability to buy and also save but it doesn’t mean that that is the right decision because when you buy a cheap thing that has no value it also means that you are wasting your money and when you buy a lot of cheap things that don’t have a resale value you still end up losing money.
It is also true for buying expensive things. Most people just splash money on expensive things that don’t have value or that don’t have future value, they do this to impress people around them and to make people know that they have the buying power. They are not buying it for the real reason which is value and that is why buying expensive things at times can be the wrong choice, buying cheap things also can be a wrong choice. You can buy expensive things if you can afford them, but you don’t have to neglect the value aspect because that is what is most important and the end of the day.
Value is king
Most people who save and live a frugal lifestyle believe cheap means value, but that’s not the case. An asset can be cheap with a great value and assets can be expensive with no value and this goes vice versa. When you focus on value whether you are buying it cheap or not, you are still making the right decision. When you are buying for the sake of status or for the sake of buying cheap, you are losing money indirectly. They are both wasting money and this is why value is more important you focus on buying things that have a future value and not for other reasons.
You can buy things for other reasons that are more personal like buying a house for your family just to make it a home and so on. You must remember that price is an illusion and must be able to buy things at the right price, but the most important thing is that it must be a thing of value. Don’t just buy because it is cheap or because you are trying to make an impression. It is always better to buy for the right reasons not only for the price.
Thanks for your time.
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