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Top things people waste their money on by warren buffet, Things that poor…
Top things people waste their money on by warren buffet
Buying A House
Buying a house with lot of debts is notg a ggod idea because you are investing all your savings here. This will also not produce any money. This will be a liability. It is a very bad decesion in beginning of yur carrer to buy a house.
Being house broke or house poor means you're spending too much on housing expenses, relative to your income.
This leaves little money left for savings or paying other bills, and can result in accumulating debt to cover daily living expenses.
Cutting your housing expenses or increasing your income can help you avoid being house poor.
Buying a house itself does not inherently make you poor. In fact, for many people, buying a home is a sound financial investment and can be a key component of building wealth over time. However, there are situations in which buying a house can potentially strain your finances or lead to financial difficulties if not managed properly. Here are some factors to consider:
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High Initial Costs: When you buy a house, you typically need a substantial amount of money for the down payment, closing costs, and other associated expenses. If you don't have a significant savings or proper financial planning, this can strain your finances in the short term.
Mortgage Payments: Owning a home often means taking out a mortgage, which involves monthly payments. If you take on a mortgage that stretches your budget to its limit or if you have a variable interest rate that increases over time, the monthly payments can become burdensome.
Maintenance and Repairs: Homes require regular maintenance and occasional repairs. If you're not prepared for these expenses, unexpected repair costs can strain your finances.
Property Taxes and Insurance: Property taxes and homeowners insurance are ongoing expenses associated with homeownership. These costs can vary significantly by location and property value, so they should be factored into your budget.
Opportunity Cost: The money you tie up in a home's down payment and monthly mortgage payments could be invested elsewhere for potentially higher returns. This is known as opportunity cost, and it can impact your long-term wealth if your home doesn't appreciate significantly in value.
Market Fluctuations: The real estate market can be unpredictable. While home values tend to appreciate over the long term, there can be periods of stagnation or even depreciation, which can impact your net worth.
Lack of Liquidity: Real estate is a less liquid asset compared to cash or investments. If you need access to a large sum of money quickly, it may be challenging to sell your property in a timely manner without incurring significant costs.
Overextending: If you buy a house that is beyond your means, taking on too much debt or stretching your budget too thin, it can lead to financial stress and potentially result in making you poorer.
It's important to approach homeownership with careful financial planning. Before buying a house, you should assess your financial situation, create a budget, consider the long-term costs, and ensure you have an emergency fund in place. Additionally, it's advisable to consult with a financial advisor or a real estate professional who can help you make an informed decision based on your specific circumstances.
Ultimately, while buying a house is a significant financial commitment, when done responsibly and within your means, it can be a valuable asset and a step toward long-term financial stability and security.
Luxury brands
Quality products and luxury brands are different. Luuxury brands are just a materialistic possession that are created to make you feel special at a very high cost. And you can prefer high quality products in the medium range price also. Then why go to luxury brands at very high cost.
Ye psychology ka istemaal karke aapke brain se khelte hain aur jyada se jyada daamo me bik wanre ke liye majboor karte hain. ye rarity ko apnaate hain. Jaise ki iphone,
They managed to fool influencers into thinking their shoes were luxury just by manipulating higher prices and creating a luxurious display of products. The influencers testified to being willing to pay $645 for footwear that usually retails for between $19.99 to $39.99, showcasing people’s willingness to pay exponentially more for brand names and the aura of luxury, despite the quality not matching up to the price.
Often people buy these items just to show off and these doesn't have the quality what you will pay for and this mindset will keep you poor because you are tend to spend a hail lot of money than your product deserves.
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several ways in which indulging in luxury brands can affect your financial well-being:
High Costs: Luxury products are expensive. The premium price tag associated with luxury brands means that you'll be spending significantly more for items that often serve the same purpose as more affordable alternatives.
Impulse Buying: The allure of luxury brands, often associated with exclusivity and status, can lead to impulsive purchases. If you frequently buy luxury items without a solid financial plan, it can strain your budget.
Increased Debt: If you use credit cards or loans to finance luxury purchases, you may accumulate debt with high-interest rates. This can lead to a cycle of debt that's difficult to escape.
Lifestyle Inflation: Continuously buying luxury brands can lead to lifestyle inflation, where you adjust your standard of living upward. This can make it challenging to save money, invest, or achieve financial goals.
Limited Savings: Money spent on luxury items may prevent you from saving and investing for important life goals, such as retirement, education, or emergencies.
Short-Term Gratification: Luxury purchases often provide short-term satisfaction but may not contribute to long-term happiness or financial security.
Depreciation: Many luxury items, such as designer clothing and accessories, depreciate in value quickly. This means that you may lose a significant portion of your investment over time.
Opportunity Cost: The money spent on luxury items could be invested in assets that appreciate over time, potentially generating wealth. By choosing luxury over investments, you miss out on potential financial growth.
Financial Stress: Constantly chasing the latest luxury trends or trying to keep up with a lavish lifestyle can lead to financial stress and anxiety.
Social Pressure: Peer pressure and the desire to fit in with a certain social group or status can lead to overspending on luxury brands.
To avoid the negative financial consequences of buying luxury brands:
Set a Budget: Create a budget that allows for discretionary spending on luxury items while prioritizing savings and financial goals.
Differentiate Wants and Needs: Distinguish between what you want and what you genuinely need. Focus on fulfilling your needs before indulging in wants.
Avoid Impulse Buying: Take your time to research and consider purchases carefully. Avoid making impulsive decisions.
Consider Value: Evaluate whether a luxury purchase provides significant value or utility compared to a more affordable alternative.
Plan for Long-Term Goals: Prioritize saving and investing for your long-term financial goals, such as retirement and emergency funds.
Seek Financial Advice: Consult with a financial advisor to ensure that your spending aligns with your financial goals and overall financial plan.
Buying a new car
I don’t know about keeping you poor, but when you buy a new car it’s value IMMEDIATELY drops, so you’ve already discarded thousands of whatever your currency is.
If you did not buy the car outright with your own money then you are also paying interest on that money you just lost.
The higher the value of the vehicle the higher insurance costs are.
Many dealerships require you to use their service centre, this is where they make the ‘real money’.
The dealerships will advise you against buying aftermarket parts but as often as not these parts come from the same factory that the brand name parts come from, so you will pay considerably more for basic maintenance because of the inflated brand name mark up.
A friend recently had a basic service done at a dealership, the cost of this exceeded what i spend in an entire year for fuel, maintenance and registration . .
AND, the more modern the car, the more disposable it is, such a car can be ‘written off’ just from having a replacement battery fitted, if whoever is doing so carelessly triggers ALL the airbags, this is SO EASILY done . .
Before someone points out that new cars don’t need replacement batteries, well, unfortunately batteries are one of those components that DO fail too frigging frequently, modern cars put much higher loads on batteries than just a few decades ago and with the need to minimise manufacture costs and improve profit margins, batteries tend not to be quite as sturdily built as yesteryear.
Whilst on the subject of battery failure, we now have cars that if the battery fails, you can also lose the ability to steer the car as all too often the connection between the steering wheels and the steering rack is by electrical wires only . .
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epreciation: New cars typically lose a significant portion of their value within the first few years of ownership. This depreciation means that your car's resale value will drop considerably, and you'll lose money simply by driving it off the lot. If you plan to sell or trade in the car in the future, you may not recoup your initial investment.
Higher Insurance Costs: New cars often come with higher insurance premiums due to their higher value. This can increase your ongoing transportation costs.
Financing Costs: Many people finance new car purchases, which means paying interest on a loan. This adds to the overall cost of the car and can lead to paying more than the car's initial purchase price over the life of the loan.
Opportunity Cost: The money spent on a new car could be invested elsewhere to potentially generate greater returns. By tying up your funds in a depreciating asset, you miss out on the opportunity to grow your wealth.
Maintenance and Repairs: New cars are less likely to require immediate repairs, but they can still have maintenance costs that can add up over time. Extended warranties and dealership servicing can also be expensive.
Limited Budget Flexibility: A new car purchase can tie up a significant portion of your budget, limiting your ability to save for other important financial goals or handle unexpected expenses.
Technology and Features: New cars often come with the latest technology and features, but these can quickly become outdated. You may find that you're paying a premium for features that lose value rapidly.
Environmental Impact: Manufacturing new cars consumes resources and generates carbon emissions. Buying a new car contributes to these environmental issues, whereas buying a used car can be more environmentally friendly.
Alternative Transportation Options: In many urban areas, there are alternatives to car ownership, such as public transportation, car-sharing services, or ridesharing. These options can be more cost-effective than owning a new car, especially if you don't use it frequently.
Consumer Debt: Financing a new car can lead to taking on consumer debt, which can be financially burdensome and impact your credit score if not managed properly.
Watching TV and playing video games
Rich people invest their time to read books, network with the best people and in their own work.
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Time and Productivity: Spending excessive time watching television or playing video games can detract from other productive activities, such as work, education, or pursuing additional income opportunities. This can limit your earning potential and financial growth.
Opportunity Cost: The time spent on these activities could be used for personal or professional development, learning new skills, or engaging in activities that could improve your financial situation.
Subscription Costs: Many video games and streaming services require monthly subscriptions. Accumulating several of these subscriptions can add up over time and consume a significant portion of your budget.
Impulse Purchases: In-game purchases in video games, also known as microtransactions, can be tempting and addictive. These small purchases can add up quickly, causing you to spend more money than intended.
Social Pressure: Trying to keep up with friends or peers who invest heavily in gaming or premium television services can lead to overspending and financial strain.
Neglecting Financial Responsibilities: If you prioritize entertainment over essential financial responsibilities like paying bills, saving, or investing, it can lead to financial difficulties or missed opportunities for financial growth.
Reduced Physical Activity: Spending excessive time on these activities can contribute to a sedentary lifestyle, potentially leading to health issues that can result in medical expenses.
Negative Influence on Habits: Certain video games and television content can promote consumerism, materialism, or unhealthy financial habits, influencing your spending choices.
To avoid the negative financial impacts of excessive television watching or video game playing:
Set Limits: Establish time limits for these activities to ensure they do not consume too much of your day.
Budget: Include entertainment expenses in your budget, and stick to it to prevent overspending.
Prioritize Responsibilities: Ensure that you meet your financial obligations, such as bills, debt payments, savings, and investments, before dedicating substantial time and resources to entertainment.
Evaluate Subscriptions: Periodically review your subscriptions and consider whether they are providing value for the cost. Cancel any that you no longer use or need.
Monitor In-Game Purchases: Be cautious of in-game purchases and limit spending on virtual items. Consider disabling or restricting these purchases.
Balance with Other Activities: Maintain a balance between entertainment and other important activities, such as work, education, exercise, and social interactions.
Peer Pressure Awareness: Be aware of the influence of peer pressure and make financial decisions based on your own priorities and budget.
Remember that enjoying television and video games in moderation is not inherently harmful and can provide entertainment and relaxation. The key is to ensure that these activities do not negatively impact your financial stability and long-term financial goals.
Extravagant vacations
Things that poor people waste money on by warren buffett
Kya aapko pata hai 67% of gym membership go on waste. US me ek saal me lagbhag 1.5 jharab rupye sirf gym membership me waste ho jaata hai, aur bharat me bhi yah aankda kam nahi hai. Aap jab apne friend circle me dekhoge to koi na koi aisa jarur hoga ki we gym membership lene ke baa bhi kuchh din gym jaa kar chhod diye. New Year resolution me jo log josh josh me aa ke 1 year ka gym membership ka plan lete hain wo mid february tak aate aate chhod dete hain. Aur ye har chiz gym owner jaan raha hota hai isiliye wah 6 months ya 1 saal ke mebership pe heavy discount deta hai q ki wah jaanta hai ki jyada chances ki log 2 mahine me hi gym aana band kar denge. To phir kya kare. Gym tabhi join kare jab aapki gym me exercise karne ki aadat ho. Agar aap gym join karne ki soch rahe ho to uss se pehle kam se kam 3 mahine tak daily exercise karne ki aadat banaye tabhi gym join kare, aur jab aap shuru shuru me gym jaaye to sirf ek mahine ki hi membership lein taaki agar aap baad me gym jaana chhod bhi do to aapke paise barnaad na hon.
Har kisi ka sapna hota hai ki wo ameer bane par mehnat koi nahi karna chahta. Wo shortcut tarike se ameer banna chahte hain.
Ek research me yah saamne aaya hai ki poor people , rich people ke cpmparison me adhik gambling ke shikaar hote hain. Iska reason yah hai ki unhe investment aur finance ki knowledge nahi hoti aur we gambling ke madad se quick financial stability gain karna chahte hain. Aur Gambling se paise kamane ki probability bahut hi jyada low hai.
Socho casinos aur lotteries kyu bane hue hain. wo ek business hai jiska maksad hai khud ke liye paise banana. To wo aapko ameer q banayegi. wo games aur lotteries aise design kiye hue hain ki aap baar baar haarein.
To sawal yah aata hai ki itne risq ke baawjud log inn games ko khelte hi q hain.
To iske 3 mukhya karan hain.
Psychological reward : jab koi person by chance kuchh paise jeet ta hai to uske body me dopamine release hoti hai aur yah reward system create karta hai jiske wajah se gambling karne ka lat lag jaata hai.
Logo ko lagta hai ki wo bina mehnat paise kama lenge aur phir life me financial stability aa jayegi par ye ek dhoka hai.
Other reasons jaise peer pressure. Agar aap uss category ke logon ke saath rehte ho jo juwari hain, pubs, bars, casinos jatein hain to bahut hi high probability hai ki aap bhi gambling arne lag jaaoge.
Jab yah aadat lag jaati hai to log debt le kar bhi gambling me paise lagaate hain phir uss debt ko bharne ke aur debt lete hain aur phir iss se we kabhi ubhar nahi paate.
kabhi kabhi to aisa hota hai ki wo bahut hi kam points se haar jaate hain to unme ek false hope create hota hai ki "abar to jeet hi jaayenge". Aur yahi chhej baar baar unhe jua khelne ki ore dhakelti hai. Jis se ki garib aur bhi garib hote jaata hai.
Aap gambling khelne ke bajay Finance aur investment sikhe, koi nayi skills sikhen, yah aapko 100% paise bana ke degi.
Buying a house : Ghar kharidna definitely ek great investment hai. Q ki real estates ka value jyadataar samay ke saath increase hi hota hai. Lekin kuchh situations me aapko ghar nahi khardini chahiye. Jaise ki agar aapki nayi nayi job lagi hai ya aap apne career ki shuruwat kar rahe ho to ghar kharidna aapke liye kaafi nuksaan dayak ho sakti hai. Q ki isko kharidne ke liye aapko debt me jaana pad sakta hai, aapki savings khatam ho sakti hai, ho sakta hai aapke pass emergency fund bhi na bache. Aise me ghar ka maintenance,insurance cost, property taxes aur uske anya kharche aapke liye ek burden saabit hoga.
To agar aap iss tarah ki istithi me hai to is se bache q ki yah aapko koi income generate kar ke nahi dene wali to phir itna risq q lena.
In other case, agar aapke job ka location frequently change ho raha hai to bhi yah ek bad decesion hoga.
4.Buying a new car : Car ham sabko lubhata hai. Jab hum 30+ hote hain to hamare man me ek baar khyal jarur aata hai ki hamari bhi ca honi chahiye. Par car ki value kuchh saalon ke andar bahut hi depreciate ho jaati hai. Aur jyadatar log car loan ke pase se kharidte hain jis se ki overall cost aur badh jaati hai. Hame interest bhi deni padti hai. Ye aapko pata hi hoga ki companies car bech ke kamati hi hai par wo aapko mainteneance service bhi bech ke kamati hai. Kai cars iase hain jaha pe aap doosre jagah repair nahi kara sakte. Aap unhi ki service centre me jaa ke repair kara sakte hain, jaha pe aur jyada cost badh jaati hai. mehanga car matlab insurance costs bhi jyada loagta hai.
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