And what you can learn from them. Hint: A lot of it has to do with debt.
No matter what our wealth level, we seem to waste money. There are some that see money as burning a hole in their pocket and they must spend it. Still, others have proven it’s possible to save considerable money even if they don’t earn a millionaire’s salary.
To some, wasting money might be buying a coffee every day or making purchases based on what a celebrity influencer wants them to buy, but others fall into the category of buying a yacht as a sure sign of a dumb purchase.
Yes, millionaires waste their money just the like rest of us, especially this list of 10 things. However, we can learn from them…
Want to keep up with more financial news? Click here to sign up for our free newsletter.
1. Over-sized house
No one really needs a 30,000-square-foot house with elevators, 20 bathrooms, and 15 bedrooms. It’s like owning a hotel and is really dumb for its impracticality. Sure, you may have the money to furnish it, clean it, and maintain it – let alone pay for the property tax each year on it. But why would you waste that much money on something that’ll most likely barely get used?
2. Multiple houses
You don’t really have a need for a house in every city you might visit regularly and it can’t be justified by saying you are making more money with a real estate portfolio. If that was the case, then buy commercial properties where other people pay you rent and maintain the property for you. With multiple houses, all you are doing is paying extra mortgages or rental fees, maintenance, and property tax.
Unless sailing is your passion, buying a massive boat is a stupid purchase. Some millionaires never even use their yachts because they are too busy spending money elsewhere. That translates to extra money spent on storing the yacht and having a crew to maintain it. You can practically smell burning bills at the thought of this dumb purchase.
No millionaire actually wants to go live on an island; it just sounds good when you tell other people you have your own island. It’s a status purchase like the other items on this list rather than a practical way to spend your money. Many islands can’t even be developed or cost a small fortune to do so. Unless you are planning on turning it into a resort to create revenue, an island is really a dumb purchase.
5. Fleet of expensive cars for you and the kids
While a fun purchase like an expensive car may be a way to treat yourself for reaching a certain level of success, it becomes a dumb purchase when you start buying a fleet of expensive cars for yourself and your young kids.
You don’t need that many cars nor do children need such expensive items in their life. There is no lesson here for them about the value of money. All they learn is that buying a lot seems good (when it’s not) and that they don’t have to work hard for anything (which turns them into entitled, lazy kids).
6. Art and jewelry just for the sake of it
Although certain art and jewelry purchases could be considered good investments over time, it becomes wasted money when millionaires buy whatever they see just to be able to say they could buy it. It would be better to take the time and research what you are buying to see if it is something that may hold its value or gain over time. Also, it’s okay to buy something you actually like and that enriches your life if it’s in the budget.
7. Helicopters and jets
Like the yacht, anything that flies is really unnecessary unless it’s your ultimate passion to fly. If it’s just to get you from point A to point B on a whim, it’s a dumb purchase. That’s because it’s also spending money on storage and maintenance when, in reality, you could use a jet or helicopter service when you may actually want to use it. Then again, you could also just travel with the rest of the population on a commercial plane and not waste your money!
8. Private clubs
It’s a nice idea to join some type of a social club, but many of these come with the most excessive annual fees just to be part of something that is deemed exclusive. In return, you don’t actually get that much except the idea that you can brag to others about being an elite member. Because of your busy life, you may not even be able to use the private club that often.
9. Staff and personal chefs
Those with money to burn who purchase large houses then realize they don’t have the time or the willingness to actually take care of those daily tasks so they hire a staff to do it for them. They may also feel like they just don’t have the time to cook anymore so they bring in a personal chef.
It’s these other purchases and the idea they are entitled to have others take care of them that leads them to waste so much money on surrounding themselves with people to do what they actually could do themselves. They might actually enjoy these things, too, and find personal satisfaction in doing them – something money just can’t buy.
10. Plastic surgery
Celebrities prove every day just how dumb – and ineffective – plastic surgery can be in their vain and insecure attempts to look younger and more attractive. Wasting money on plastic surgery might slow the aging process, but it won’t stop it from happening. Nor will it actually make you look that much better.
We’ve all seen where these surgeries go completely wrong. A more effective approach that doesn’t cost much money at all is to exercise and eat healthily as this has proven to slow and even reverse some signs of aging!
Lessons learned from dumb millionaire spending
The lessons here are that these ten ways to waste money are dumb because they don’t provide any return on the actual spend; if anything, they require that you spend more after making these purchases. None of them really involve investing or thinking about the future, which may explain why so many millionaire sports figures and celebrities end up burning through their money and then are poor the rest of their lives.
Finally, these items actually don’t make for a happy and satisfying life even if they at first appear fun. They are empty purchases that miss the point on so many things that actually make life good that don’t cost money like friendships, family, and the payoff from hard work. Be smart with your money and focus on the right aspects of life so you don’t end up making dumb purchases!
Published by Debt.com, LLC