Things that are a waste of money: Unless you are an enthusiast, spending your hard-earned money on these things will force you to work longer at your job.
Some things are worth spending money on because they add value to your life.
For example, if you are an enthusiast about a product or service, it’s worth spending money on it. It gives you a reason to wake up in the morning.
But there are other products and services that just don’t add enough value to justify the price.
The reason for buying these things are usually superficial, out of laziness, or because of an intellectual imbalance.
The worst part is that wasting money on these kinds of things forces you to work longer. By purchasing things that are a waste of money, you are literally depriving yourself of financial independence.
In this post, I will look at 11 things that are a complete waste of money.
If you’re spending money on these products and services, you might as well flush your money down the toilet.
Let’s take a look at 11 purchases that will crush your chances at financial independence.
Things That Are A Waste Of Money
1. Brand Name Luxury Items
One of the stupidest things you can do with your hard-earned money is buy luxury brand name products.
I’m talking about brands like Louis Vuitton, Gucci, Channel, Dior, Fendi, and Prada.
Frankly, even if you have money to blow, I still think it proves you are stupid if you buy it.
The first reason it’s stupid is that the quality just isn’t worth the price. For example, a Gucci hoodie for men costs $1,665.00, for a damn sweater…
Meanwhile, you could pick up a plain hoodie from Uniqlo for less than $50. If you do the math, this is 33 times less than a Gucci sweater. I’m sure the quality is better, but is it really 33 times better?
The second reason why buying luxury brand names is stupid is that the only reason to buy these products is to broadcast you can afford them. In reality, people buy these expensive brands because of marketing. They associate the brand with a certain status, and they want to show off the brand logo to prove they can afford it.
It’s unbelievably ironic, because buying these brands actually makes you less wealthy.
By purchasing a brand name Gucci sweater or belt, you are literally telling people that you are stupid enough to pay a ridiculous price for something so that people will think you are rich.
Personally, I would rather wear a plain shirt without a logo. Perhaps it’s because I studied marketing in school and I see what is really happening.
Related post: Dress Well On A Budget: (11) Tips To Look Dapper For Cheap
2. Drugs Or Alcohol
Admittedly, I’ve wasted a lot of money on cannabis and alcohol over the years (don’t judge me—I stopped both).
But over the last two years, I’ve almost lost all interest.
This is partially because I have more time now that I work part-time from home. It has become clear that being overworked in an unfulfilling job caused me to seek ways to cope. In turn, I smoked or drank to forget about it.
Now that I have more time and I am more fulfilled by my work as a part-time blogger, I find that I don’t want to drink or smoke anymore. It just seems like a huge waste of money.
Why should I spend my hard-earned money on things that make me stupid? Not to mention it’s not good for longevity and health. Real financial independence seekers enjoy life and want to live as long as possible.
Maybe I sound like a goodie-goodie. That’s ok if you think that, because I’m saving a lot of money.
Frankly, I enjoy the clarity that comes from not drinking or smoking. I like having my full mind. It’s feels like I have a financial and a mental advantage. It’s as if I’m an extra step ahead.
3. Car
Before I elaborate, I think you should spend money on a car if you are an enthusiast, if you are older, or if you have children.
But if you are a young financial independence seeker, avoiding car and insurance payments is one of the best ways to save money.
Car payments, insurance, gas, and general maintenance are a huge waste of money. They also make financial planning less predictable.
Of course, not owning a car is easier if you live in a large city with accessible transit. It’s easier to make the sacrifice. It might be different if you live out in the suburbs.
However, if you don’t mind taking transit or walking, making this sacrifice will put a lot of money in your pocket.
I should also mention that services like Uber and Lyft have made it more plausible than ever to not own a car.
4. House ** (controversial point for FI Seekers)
I realize that a house is an asset that increases in value.
For many people, a house might be the best way to build wealth.
But hear me out—the cost of a downpayment, interest, lawyer fees, property taxes, and maintenance make it nearly impossible to become wealthy.
Simply put, large purchases will force you to work longer. You can’t own a house with a small emergency fund or without giving up your life savings for the down payment. If you don’t have financial help from parents, you will have to work longer or harder to make enough money to save enough to pay for it.
On the other hand, I can rent for cheap, which allows me to keep my money invested in faster-growing assets and I can maintain a more predictable budget.
The more I think about it, the more it seems like the only reason to own a house is to be able to tell people you own a house. It’s either that or people don’t know where else to invest money.
Because if you really know what you are doing with money, you can get much higher returns by investing in the stock market.
As such, it is my belief that owning a house actually forces you to work longer.
Unless you receive help with a down payment from your parents, or unless you have a really high income, the amount of money required for a decent down payment will force you to invest less. It basically costs your life savings, which is money that could be compounded in faster-growing assets.
In addition, many people overextend themselves with a mortgage and never invest at all.
If you do the math of how much interest you are paying on your mortgage over the amortization period, your house costs two to three times what you paid for it. So, the returns are actually a lot lower than you think.
If you invested a mortgage payment into the S&P 500 for 25 years, you would end up with a lot more money. In fact, you would probably have enough to buy a house and live off the rest.
The one main advantage of a mortgage is the leverage it provides to be able to afford a large asset.
Related – Real Estate vs. Stocks: Which One Should You Invest In? via Greedy Rates
5. Jewelry And Watches
Again, I will add a disclaimer for enthusiasts:
If you are passionate about jewelry and watches, you should spend money on them.
But if you are only doing it for superficial reasons, it’s not worth the opportunity cost.
It’s similar to what I said about wasting money on luxury brand names.
If you are buying a watch or piece of jewelry so that people think you look rich, you are preventing yourself from being rich.
It’s such a waste of money in my opinion, because it doesn’t change your life enough when you buy these kind of things.
When you buy a watch, you take it home and put it on your nightstand or in a drawer until you wear it. Then, you wear it and hope someone notices it and thinks you look rich. Is that it? Please tell me because I really don’t get it. Jewelry doesn’t do anything.
At least if you buy an Apple watch, it has other functions.
6. Lattes And Buying Expensive Coffee
You might have heard of the latte factor from David Bach.
To sum it up, wasting money on expensive coffee adds up.
If you spend $5 per day 5 times per week, you are spending $1,300 per year on coffee.
That might not sound like a lot of money, right? But what if you invested that money for 40 years and you added $1,300 per year at a 6% return? You end up with $214,561.99! (Source: Get Smarter About Money – Compound Interest Calculator)
As an avid coffee drinker, trust me, I love my Starbucks.
But I like financial freedom and coffee at home more.
Related: Save Money On Groceries – 14 Highly Effective Ways To Save Money On Groceries
7. Restaurants
If we’re talking about things that are a waste of money, I have to mention restaurants.
I’m sure you’ve noticed how much money you are saving because of the lockdown.
Don’t get me wrong, though, restaurants are nice for dates and special occasions.
But more often than not, going to a restaurant is actually more about judging the experience and Instagram than it is about the food.
In my experience, home-cooked food is better than restaurant food.
Usually, there’s something wrong with the food or something distasteful about the restaurant experience.
Furthermore, the people that work in the restaurant industry get paid minimum wage and usually aren’t even that sanitary.
I mean, do you really think the 16-year-old that earns minimum wage and makes your cheeseburger cares about washing their hands?
8. Delivery
There are plenty of money-wasting services that didn’t even exist 5 years ago.
I’m not sure about you, but I value my money even if it’s only a $5 delivery fee.
For some reason, most people don’t care about paying an additional fee. I don’t get it.
Admittedly, I’ve tried UberEats, but I’ll never disrespect my money like that again.
Not only does it increase the cost of your food, it also lowers the quality.
Typically, the food takes longer for the delivery to arrive, they screw up the order more frequently than not, and the food arrives cold. You ultimately end up paying more for cold, moist, gross food.
To sum things up, wasting your money on overpriced delivery services is one of the best ways to end up broke.
9. Lottery Tickets
Buying lottery tickets is a pretty sad hobby, if you asked me.
It’s what you do when you have no other options. It’s a hopeless endeavour for those who are too lazy to think of something better.
Sure, you will see the odd story about a lottery winner.
But the actual chances of winning the lottery are slim to none.
Ironically, most people that buy lottery tickets could end up wealthy if they invested the money they spend on lottery tickets.
Instead of spending money on lottery tickets, allocate the money you spend on lottery tickets to the S&P 500. $10,000 invested in the S&P 500 could turn into $420,000 with a long enough time frame.
Essentially, you can create your own lottery.
Plus, you will actually learn how to manage money in the process, so that you don’t waste it all when you get there.
10. Cable TV
In 2021, cable TV is a ridiculous way to waste your money.
With more affordable streaming services like Netflix and Amazon Prime available, it makes no sense to waste money on cable.
The only reason I can think of, in Canada, is to watch sports.
Since Rogers and Bell basically have an oligopoly in Canada, it’s not really possible to stream sports (legally).
Even still, I am not willing to pay for cable TV just to gain access to a couple sports channels.
11. Home Phone
I actually can’t believe people still pay for home phone. I really can’t.
Since the invention of cell phones, it is one of the most useless ways to waste money that exists.
If you ask someone with a home phone what their number is, even they are confused about which number to provide you with.
What is the point of having two numbers? It’s not even efficient because most people prefer not to answer their home phones when they are home.
If you call a home phone, it usually goes to voicemail.
Home phones are a confusing, useless way to waste your money.
Things That Are A Waste Of Money – Final Thoughts
Some of the points in this post may seem controversial.
I should also mention that there are multiple ways to reach financial independence.
Ultimately, this is a post for people that want to work as little as possible.
I could sell my stocks right now and buy a house with my girlfriend, if we really wanted.
But if I did that, I would not be able to afford to work part-time, and I wouldn’t have as much time to blog because I’d have to work full-time.
Then, I’d end up spending more money to be able to cope with a more mundane day-to-day life. I would likely have to buy a car as well.
Hence why you really have to become self-aware and think things through if you want to work less.
The general recommendations for life don’t always make sense if you are looking for something different. You must be willing to challenge the status quo if you want something more meaningful.
In summary, if you really want to work less, don’t buy things that are a waste of money.
By avoiding these 11 unnecessary expenses, you put yourself in a better position to reach financial independence sooner.
Buy things that add value to your life and avoid buying things that are a waste of money.
Avoid trying to keep up with the Joneses or buying things for superficial reasons.
Soon enough you will notice that you have extra money to acquire assets instead.
Eventually, working will become optional and your day-to-day life will improve.
Instead of being forced to work to support wasteful expenses, you will work for personal fulfilment and to support a lifestyle that you truly want.
Related Posts
How To Stop Spending Money: 10 Tips That Will Immediately Impact Your Spending
Dress Well On A Budget: (11) Tips To Look Dapper For Cheap
Save Money On Groceries – 14 Highly Effective Ways To Save Money On Groceries
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