luxury

Living a Rich Life While Broke Isn’t Impossible

July 17, 2018 By Amanda Blankenship Leave a Comment

Do you want to be rich? Then it’s a good idea to live beneath your means. However, living a rich life doesn’t have to mean spending a ton of money. In fact, you can live a rich life on a fixed income and even while broke. Nothing is impossible.

Living a Rich Life on a Budget

Redefine luxury: Redefining what is luxurious helps with staying within your budget. Of course, you may think that a huge house with a pool is luxurious. However, many others may find it more luxurious to have a small, humble home where they have no mortgage.
Rent items or buy secondhand: Another thing that can help you stay within your budget is renting or buying things secondhand. For instance, you can rent a boat for a day instead of buying a boat for hundreds of thousands of dollars. Or you can search for a used BMW instead of buying a brand new one.
Embrace small luxuries: This is one of those “take time to smell the roses situation.” Your perception of what is luxurious makes all the difference. Treat yourself to something small and within your means and you’ll find the financial freedom will be the most luxurious thing you’ve ever experienced. Have a handful of go-to activities that you consider small luxuries that you can treat yourself to from time to time.
Set boundaries for yourself: Although you should embrace small luxuries, also consider where you should set your boundaries. For instance, it may be within your means to rent a cabin once or twice a year, but not every single weekend.
But also plan for the occasional splurge: The occasional overspend or splurge happens. When you are on a fixed income, you need to plan ahead for this. Have some emergency money stashed away that you wouldn’t necessarily need if a real emergency came up. In fact, start yourself a splurge fund once you have a fully funded emergency fund. This way you can save for that bucket list of experiences you would like to have.
Read inspiring books: Many people also find inspiration and happiness by reading inspirational books or stories. It can lead to an overall better feeling about your own life and make you feel like you live in luxury.
Surround yourself with the right people: Another thing that can help you live a rich life on a budget is surrounding yourself with the right people. Many successful people often mark this as the first step to obtaining your long-term goals.

How to Actually Live Like a Rich Person

Live like you’re broke: Many rich people actually live as though they are broke. This is because, in all likelihood, they’ve worked hard for the money they have and don’t want to spend it all. It is also possible, in some cases, that their frugality is what led them to be so wealthy.
Invest in yourself: Another thing rich people never fail to do is invest in themselves. Whether they are investing in their own personal business endeavors, or they are investing time into themselves at the gym, or going to seminars to continue their education. They know the value of putting time, effort, and money into maintaining themselves.

Living a rich life doesn’t necessarily mean you have a vault full of money, a sparkling pool, and a Ferrari. Sometimes truly living a rich life means finding value in the little things in life, like treating yourself to a spa day or a night out. This is doubly true if you’re able to do so and be financially free.

Readers, what do you think it takes to truly live a rich life? Let us know your thoughts in the comments.

Want to sound off even further? Start a thread in the Saving Advice forums.

The Tesla Model S Is Now the Fastest-Accelerating Sedan in the World

July 17, 2015 By Will Lipovsky 6 Comments

Remember when people used to laugh at electric cars? They used to be seen as an underpowered joke of a car. Not. Any. More.

Just hours ago, Tesla Motors revealed how owners can make their Model S’s go from 0-60 faster than any other car.

Yes, this all-electric 4 door sedan built in California is now capable of going from zero to highway speeds faster than any other production car known to humankind.

Tesla can be called the only car on the planet that gets better with age. This is thanks to special over-the-air (OTA) updates the car receives (should the owner accept them). As technology advances, the car is given more capabilities.

In March of this year, Tesla introduced ‘Insane’ mode. Insane mode took the car from a standstill to 60MPH in 3.2 seconds. Back then, we thought that was impressive. A lot has changed in the past 4 months… apparently.

Tesla’s can now do it in 2.8 seconds. This is absolutely… Ludicrous. Yes, the new available feature for the Tesla Model S is called Ludicrous mode.

How to Get Ludicrous Mode on a Tesla Model S

Unfortunately, it is not an OTA update. It’s also not free. Expensive hardware needs added. The cost to do everything is a cool $5,000 for existing owners and $10,000 as an option for new cars. Another drawback is it is only an update or option on the P85D models. However, that is to be expected since the P85D owners are the ones who buy a Tesla for the speed. And the Ludicrous mode needs the AWD which is only offered on P85D’s.

The feature will also be available for the Model X when it’s released. However, the less-aerodynamic SUV’s Ludicrous speed will be a less impressive 3.3 seconds. Although Elon Musk (the brain behind Tesla Motors) says that is only an estimate. They have yet to test Ludicrous speed on the X.

The Cost of Ludicrous Speed

Obviously, a Tesla is not a cheap car. Prices start at $52,500 (after incentives and gas savings). But one equipped with Ludicrous speed will cost about $110,000.

While the Model S or Model X are certainly not cars for people looking to save tons of money, they are more practical than most people think. The seats can be folded down to store ton of belongings. After all, the Tesla doesn’t have a big gasoline motor. It’s electric motors are the size of water melons. That means there’s room for luggage all over in the car. You can even put rear-facing seats in the hatchback and turn it into a 7-passenger car.

The car also comes with AWD for those who either want the instant speed or for those who deal with slippery roads on a regular basis. The car also only has one fluid to monitor – windshield washer fluid. Maintenance is cheap on this car. Tesla even has an infinite mile warranty.

Bottom line – Tesla’s offer massive excitement for a great value. There comes a point in every successful person’s life where they stop trying to save every penny and start trying to get the best value for their dollar. If you’re at that point in life, a Tesla may be right for you. For me, I’m not there yet. But someday I may have a Tesla of my own. By then, the car will probably do its own driving.

Home, James.

Extravagances I Can’t Understand

June 24, 2010 By David G. Mitchell 15 Comments

I am a Boston Celtics fan and I have been since I was a youth during the rather wonderful season that was 1981. I had the joy of going to see the Celtics play regularly in the Boston Garden back when fans could arrive early and, if they thought about it, walk on the parquet floor during pre-game warm-ups (as long as we did not interfere with the players). I still have a great stack of photos (somewhere) that I took of Larry Bird, Kevin McHale, Robert Parrish and the rest of the great teams from the mid-1980’s.

I even got to see several playoff games during the Celtics championship years in 1984 and 1986. I had to pay for the tickets, but my manager at the store where I worked sold me tickets at face value. I think I paid about $14 per ticket.

This year my Celtics played against the Orlando Magic in the Eastern Conference Finals. I wanted to take my son to see a game but when I checked the ticket prices, I was shocked and dismayed to see that some tickets cost as much as $2,000. Even the least expensive tickets were more than I wanted to pay, especially for the worst seats in the arena.

That got me thinking, if I could afford to pay $4,000 for a pair of tickets to a sporting event, would I? The answer of course, is a resounding “Not on your life!” To do so would be an obscene extravagance. Even if I could afford it, I hope that I would feel too guilty to ever consider doing it. With $4,000, I could put a lot of kids into seats for a regular season game. That would make me feel a lot better about spending the money and it would ensure that more people enjoyed a game of basketball.

There are so many extravagances that I cannot really understand. When I see people wearing Rolex watches, I don’t get it. When I see someone driving a Ferrari, I assume that the driver is compensating for some other inadequacy. The products are nice, but what do the owners really get out of them other than some perception of status?

Now, don’t assume that I am in favor of wealth redistribution, because I am not. I am not suggesting that people with available funds should not be allowed to shower themselves in luxury. I do have to wonder, however, whether people who are fortunate enough to have fabulous wealth really experience any improvement in their quality of life just because they are surrounded by luxury. I would think that the security of having wealth would define the value of having it.

If I won the Powerball Lottery, I would certainly surround myself and, more importantly, my family, in comfort, but I hope I would not cross the line from comfort into ostentatious luxury. Indeed, for me the great luxury would probably be wearing a brand new pair of socks every day. When I look at all of the things that I would like to buy, the only recurring luxury is the notion that my step would have the spring of wearing new socks each and every day! At the same time, there are a lot of charities that I would love to support and there are a lot of charitable objectives that I would like to pursue. Moreover, buying $2,000 tickets to a sporting event that I can watch on TV certainly would not be high on my list of things to do.

What would you do with a huge lottery jackpot? Would you purchase luxuries? Try to help others? Support your family and friends? Give up your job? What luxuries do you see other people purchase, only to leave you wondering what kind of values they have?

How to Offset the Cost of Luxury

August 7, 2008 By Ann Hartter 6 Comments

Al Gore offsets his carbon footprint. Volunteering for your community is offset for minor crimes. If you can offset those, you can definitely offset luxurious spending. The opportunity or the cost of that opportunity is a perceived value. Sometimes you even have to make a case to yourself for something you know isn’t the most cost-effective. Six cases that work well:

Deposits to your savings account are made at a similar rate to your luxurious spending totals

If you can afford to pick up the latest in video games, you can afford to match that total in a deposit to your savings. In this manner, every luxurious purchase costs twice as much in your budget, but half of it is stored for emergencies, the future, or to bear interest. Not a bad plan, in fact, one that helped a friend quit a smoking habit.

It provides recreation

Bounding across the countryside on an ATV is a much-needed release from the daily grind. A kayak, the gear, and the insurance is going to strengthen your heart, lungs, and muscles, inspire you to travel to other rivers and rapids, and keep utilities down at a now-empty house. Having a piano to practice puts your creative mind to work.

Overtime hours or a side job compensate for you luxury

Absolutely no reason not to work on Thanksgiving? Have a highly productive hobby? The extra income from something you could, would, or do do anyway is a system that allows for something above and beyond sustenance living.

Someone who needs the money is getting it

Get your book for an extra dollar at the local bookstore, keep the money and the store in town. Buy a pizza card from the baseball fundraiser, eat out a few times and send a potential future major-leaguer to camp. When auto sales go down, it’s not just the sales lots or the big-name manufacturer that sees the cut, but the people working in small plants across the country that only do mundane things like gauge fuel injector parts.

There’s more hours to spend with friends and family

It is possible to pinch pennies across the board by doing everything yourself, but if you’re under the sink fixing the leak, your family is off in the other room playing a board game without you. If you’re spending hours altering a hand-me-down that you could take in to a seamstress, you’re not taking a hike with your best friends.

It’s something the grandkids will happily argue over

Heirloom quality: beauty, history, the stuff memories are made of. If it’s going to last long enough for your descendants to own proudly, it’s a worthy investment. It spreads the cost of what would be one household’s dining table into several households, saving money for future generations, for a small expense now.

One luxury a day, maybe the famed coffee-house mocha latte. Or maybe that upgrade, or the decision to buy local. If there is a choice to further your dollar and you didn’t make it, it doesn’t mean it’s out of line. It just means it belongs on a different line. Really, it’s okay. Offset.

The Quality Trap – Items Where Quality Is Over-Rated

December 10, 2007 By Cortni Marrazzo 4 Comments

If I were to ask the average person what makes a Lexus better than a Kia, an outfit from Nordstrom better than one from Walmart, or a Coach purse better than a Canyon River Blues one, the most common response I would probably get is “quality.” Now I’ve always been one to try to spend the minimal amount possible on the items I buy. If I can get a shirt for $2.99, I get excited. Friends of mine who spend more on the same item often justify it because their item is of higher quality.

I can understand the draw of wanting an item that will last a while and hold up through wear and tear – nobody likes it when their stuff breaks. But at what cost is this “quality” worth it? It’s obvious that higher quality items cost more money than “average” quality items. The big draw for this is that the higher quality item will last a lot longer. The way I look at it, however, is that the money I can save and invest by spending less on an item (and multiple items) will most likely last a lot longer than that product (or my need to use or wear that product).

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Here are a few things that I personally don’t think are worth paying more for “better quality” (at least at this point in my financial journey):

Automobiles: First of all, I admit that I’ve been known to drool over Lexus’s and BMW’s. They are nice cars with some very handy features. However, at this point in my life I would never consider paying $30,000+ for one of those vehicles (even if it came with a full time chauffeur!) Since our household income isn’t exactly in the 6 figures (or even close) it would be a misuse of our resources to spend a big chunk of money on a car like this, simply because it’s “better quality.” My Honda Civic is actually a great quality car for a MUCH lower price.

In addition, the initial high price of these cars, they also tend to be more expensive to fix. Luxury car parts tend to cost more than your average Honda or Toyota parts (probably because they are “higher quality”) Because they are more expensive to fix and replace, that means they are also more expensive to insure. And since car buyers in the market for a luxury car don’t tend to be worried about high prices and costs, less effort is given to making the car more economical and fuel efficient, while more effort is given to add extra features, like the ability to parallel park itself. The prices add up on these “higher quality” cars. Personally, I’d rather save the money and parallel park myself.

Clothes: It’s commonly thought that a $3 shirt will probably last you a month or two, while a $100 shirt will most likely last almost your entire lifetime. Even if that’s true, I’d still rather have the $3 shirt. For one thing, I personally can’t wear the same clothes over and over and over without getting sick of them. I like to change things up and wear new things. I don’t like my wardrobe to get stale. So for me to buy a $100 shirt that I will eventually get sick of and want to get rid of anyhow is pretty silly. Even if I didn’t get sick of the $100 shirt, chances are it will go out of style in a few years anyway and it will find its home in the back of my closet with all the clothes I never wear. Then I would get sad every time I see it because I’d think of all the money I wasted on it.

On the flip side, there are those pieces of clothing that are timeless and will never go out of style and can be worn year after year. Like the long black wool button coat I recently bought to wear to work on those cold winter days. The nice thing about this coat is that it can be worn with jeans or dress clothes, it’s black so it matches almost anything, and it keeps me nice and warm. A coat like that can easily go for $100+ (most likely a lot more). The best thing about my new coat? It only cost me $40. Instead of shopping at a department store and spending hundreds of dollars, I went to a store similar to Ross and got the same coat for a lot cheaper. Now I’m so happy that I have a nice “quality” coat that I didn’t spend a fortune on.

Electronics: It’s always nice to have the highest quality newest electronic item on the market, but that comes at a high price. Believe me, I’ve paid that price in the past. About 5 years ago I was in the market for a new cell phone. Camera phones had just come out and I found the coolest one for around $400. I love taking pictures so the idea of having a camera on my cell phone was really a draw for me. Plus, no one I know had one at the time. So I forked over the $400 and was the only person I knew that had a camera phone. Until a week later. About a year later it seemed that everyone had camera phones and they paid a lot less than I did. Plus they had extra features like a video camera and their phones were smaller than mine.

If I could go back in time I would not have bought that phone and invested the extra money instead. Had I not learned my lesson from that experience, I probably would have been first in line to buy an iphone a few months ago. But I have stayed away from that ridiculously expensive phone and stuck with my basic camera phone that works just fine. I now see it’s silly to spend so much on such a “quality” item the second it comes out.

Eating Out: Somebody really enjoy the high quality of an expensive meal. I suppose once in a while it isn’t bad, but personally I don’t want to literally eat away my money. Granted, Red Lobster tastes a lot better than McDonalds, but eating at Red Lobster all the time will really set you back financially. If you really want to eat some better quality food, considering sharing a meal at a nice restaurant or perhaps order one of the least expensive items on the menu. You can also buy quality seafood/meats on sale at the grocery store or meat market and make your own high quality meal at home for a lot less.

Then there is Starbucks – said to be the highest quality coffee there is. Granted, I’m from Seattle so I share this opinion myself. If I could go to Starbucks everyday for free I would. Unfortunately it’s not free so I don’t give myself the luxury of going there everyday or every other day. I do however brew it at home. I use Starbucks coffee at home in my Barista Espresso Machine and make my own lattes at home for a lot cheaper. And I’m not giving all my extra money to Starbucks’ bank account.

Now most of this is more directed to those younger people who are early on in their financial journeys. I belive those who are older and have been wise with their finances and have built up a nice net worth should be able to enjoy quality items. And I understand that some people may need to spend more in a certain area for quality (such as a nice car for someone who drives high end clients or nicer appliances for someone who cooks for a living, but if spending that extra money doesn’t help you make more money, is it really worth hindering the building of your financial foundation for a little extra “quality”?

Image courtesy of KB35