Understand Your Perspective

“That’s nothing!” My Dad’s friend said after I pointed out a Bentley sitting in VIP Parking at the Miami Open, a Tennis tournament my family attends every other year in South Florida. He jokingly called his brand new BMW a “poor man’s car” as we drove out of the parking lot onto the main road, surrounded by Porsches, Lamborghinis, and other exotic cars. In most places around the world, the thought of a BMW being a necessity is ludicrous. But this is Miami, one of the wealthiest cities on Earth.

Riding an economic boom from Latin and Asian money pouring into the real estate sector, Miami has grown drastically over the past decade. Downtown Miami now resembles a mini-Manhattan, but right in the middle of a tropical paradise. Construction cranes dominate the skyline, building condos that will be priced into the millions of dollars. New nightclubs sponsored by top celebrities are popping up on every block, and some restaurants in Miami rival the best eateries in places like New York City and London. And for many now living in this tropical paradise, all of these luxuries are considered a standard for the middle class.

But the crazy thing about all of this is that no reasonable or logical human being would think that a $100,000 Porsche and a $1,000,000 condo are required to live a happy and satisfying lifestyle.

Yes, if you’ve made an incredible amount of money and want to enjoy some of it, this kind of behavior is completely fine. But you will destroy yourself financially if you try to live a wild lifestyle on an average income.

When everyone and their dog gets a lease on a BMW, it seems like spending $500 a month on your car is a requirement for a happy life. If all of your friends have gone out to that new restaurant downtown, don’t you deserve to blow $200 on a night out? Well, if that night out can eliminate 20% of your savings, I wouldn’t recommend it.

The biggest lesson Miami taught me is that when it comes to spending, you have to understand your perspective and appreciate all that you have. Billions of people around the world would kill for the average American lifestyle. So if you think that you HAVE to have that new purse or SUV, think again! Be smart with your money and spend it for your own personal satisfaction, not to impress others and keep up with the joneses.
-Andrew

Life Lesson: Know Your Audience

Last night, I spent a few hours hanging out in the game room of a resort I am staying at. After acquainting myself with half a dozen other teens through some heated ping pong battles, I pitched 17 to Financially Free to them, hoping to gain some more viewers. Unfortunately, I don’t think any of them are gonna check it out anytime soon.

I told everyone about how important it is to be financially secure, and that consumer debt is severely restraining the middle class in America. I had the pleasure of watching their eyes glaze over, and eventually look back down to Snapchat stories and Instagram feeds. Even after mentioning that they can look up the mobile version of the site on their smartphones, none of them bothered to do so.

After walking back to my room, feeling defeated, I had an epiphany: Why the hell am I trying to get teenagers excited about eliminating credit card debt and living frugally? 99% of kids my age don’t care at all about financial stability; they care about spending cash and having fun! The title of the first personal finance book I ever read was “How to Be Richer, Smarter, and Better-Looking Than Your Parents”, not “The Dangers of Consumer Debt in America’s Middle Class”!

From now on, I’ll include some more exciting aspects of personal finance in my pitches: Being able to afford sweet rides, big mansions, and exotic vacations. While most members of the personal finance world don’t have these goals, it will definitely get young people excited about saving money.

The main thing I learned from this experience is to know your audience. Steve Jobs turned Apple into a technology empire by making his products appealing to millions of American consumers. The perception people have of your product or service is just as important, if not more important, than the quality of that product or service. So no matter what you are pitching, focus not only on the idea, but also on how you convey that idea.

-Andrew

How To Avoid Buying Stuff You Don’t Need, Or Even Want

We live in a consumer-oriented society. Constantly inundated by billboards, TV commercials, and internet ads, it seems like the world is always telling us to go out and buy stuff! But the people telling you to buy this merchandise are actually the CEO’s of Fortune 500 companies and other powerful people in the business world. And while some of their wares are useful and will improve our lives, a lot of what you buy will give you a poor return on your investment.

There’s a lot of cool stuff out there to buy! Today I looked at this uber-cool 3-D LED light for my room, and it’s on sale for only $59.00! And with my net worth sitting at $1,100, I could easily afford it and replace the old reading lamp in my room. While this lamp is, in my opinion, incredibly awesome(!!!), it’s not something I really need. If I did buy it, I’m sure that after a few days of looking at it, I’d get bored of it and question why I even bought the stupid thing in the first place.

Instead, that $100 will go towards my $400 savings goal for new camping equipment and a kayaking trip with my friends. I’ll get to spend a ton of time with people I enjoy being around, see some beautiful scenery, and get a good workout. Plus, I will get to keep the memories of the trip forever, and good memories never get old! Overall, I think that my money will be much better spent paying for an experience, rather than buying another material item.

New cars (of any kind), Rolex watches, Gucci clothing, and massive mansions, among other things, are all signs of excessive spending. Even those new Toyota Corolla’s rolling down the road are examples of overspending. Why spend $20,000 on a new Corolla when you can spend half of that on one that is only 3 years old and has less than 50,000 miles on it? You can even drive luxury cars on the cheap if you buy used. Many 10+ year old Porsche Boxsters go for less than 10 grand, and a writer for Automobile Magazine drives a 2000 Mercedes S-Class that cost him a grand total of 4 grand! Unless you are addicted to that new car smell, it’s pointless to pay MSRP for any car, whether economical or luxurious.

One piece of advice you should follow is to sleep on every major purchasing decision. Even if that new pair of shoes is the deal of a lifetime, go home, consider if you truly want it, and then wait until the next day to decide if you will actually buy it. And when you set savings goals, don’t aim to buy a new car or a luxury watch, but aim to take a vacation to Paris, or take your children to Disney World. Buy experiences, not possessions. If you follow those two basic rules, you will be on your way to living a more efficient and less consumer-minded lifestyle.

-Andrew