If You End the Month with $0, There’s Only One Thing You Can Do
I’m not talking about saving or making more money
Humans make more mistakes with money than science does with space and interplanetary travel.
Last week I was talking to a friend from Ireland. He told me that there, renting a house is harder than launching a rocket into space. There are more jobs available than houses for rent.
Nobody here seems to be caring. You spend 80% of your income on rent. He said.
Many of my friends from Brazil who go to Ireland for an English exchange program spend a fortune. Money that they took 4 years to save they spent in less than 3 months. They end the month with $0.
There, not even a job paying $1,000 a month helps you. You still have to pay rent of $300 every week. That’s $1,200 a month just for rent. You end the month with $0. You are a foreigner and a tourist. You need to take the money issue seriously.
Here nobody cares. Everyone lives his or her own life
And that’s good.
Avoid comparing yourself. Everyone lives his or her own life.
Suppose you want to buy a new TV. The model normally costs $770. But there is a $50 discount on the TV you have chosen.
Let’s go.
But you have to drive more than 50 km to do it, but hey, you can save 50 dollars.
Now suppose you want to buy a new car in Dublin (Ireland). But a car dealer around the corner has a used car you like for $15,000. A car dealer in Limerick (Ireland) has the same used car for $14,950. Are you going to drive from Dublin to Limerick (Over 196 km) to save the $50? Of course not.
And that is exactly where the problem lies.
We automatically compare the possible savings with the price we pay.
If I drive more than 50 km to save almost 30%, with TV, I make the trip. If it’s only 0.3%, I save effort and time.
Whether you buy a TV or a car, $50 is $50.
Comparing yourself to your neighbors is the stuff of spoiled Beverly Hills girls
To see who is prettier.
Let’s take the example of the TV again.
You go to your electronics store behind your house and look at the models. Three models are the prettiest. The picture quality is excellent on two, but even a little better on the third. Of course, you will immediately notice the difference in the store. To avoid getting angry later, you get the top model immediately. After all, the television should last for many years.
When you get home, you will be happy for a few more days that you are now watching Peaky Blinders in high quality and not in a model from the 1960s.
But if you hadn’t done the comparison in the store, the cheaper version would have made a difference too. You wouldn’t have missed anything. You wouldn’t even notice the small difference and wouldn’t even know it existed.
The difference is only known to you through direct comparison, but without it, you don't notice it.
Once we know of a quality difference, we prefer to go for the more expensive variant so that we don't have to live with the fact that we didn't choose the superior TV.
What costs nothing is also worth nothing
If you offer something for $0, nobody will value it. People will take it and throw it away. If you sell it for $1, people will see value even if that product is a sea rock.
Because of discounts and offers, we often buy things that we don't even need. We like to buy a lot because it is very cheap at the moment.
Go against the crowd
Imagine that you were already supporting Tesla and now the price has skyrocketed?
Luck plays the biggest role here. You will not permanently beat the market with your investments. What matters is not to get it right all the time. But to get it less wrong than most.
Not even those who have been in the stock market since the 1950s can do that.
Expecting someone to tell you that you did the right thing is stupidity
We make a buying decision and get a little unsure afterward.
Without blinking, we look for arguments that tell us, "Yes, you did exactly the right thing!"
Only confirmation information is allowed, and all conflicting information is blocked.
But we don't just do this after the purchase, no, we did it before too!
If we already have an opinion, there may be a thousand reasons that go against our preference. We simply weigh the pro arguments more and ignore the negative ones.
This is most common when buying a house.
This is how most potential homeowners find ways and means to turn to buy a house into a bargain, even though that may not be true.
Money is king. You are the prince
Use the money to generate only positive emotions.
Imagine you buy online the flight from Portugal to Italy for next month and put $150 on the table. Or you just enter your credit card details and at some point, you will see in your account that there is $150 less.
Now you go out to eat, invite your friend over, and spend $100. And you pay in cash. That sounds completely different, doesn't it?
When you pay in cash, the loss of money is felt much more than when you pay by card.
Now, if you see a detergent with a big discount sign and you can save 23%, you will probably be happier. Now, if you change your electricity supplier and save $108 a year, that probably won't elicit immediate enthusiasm and applause from you.
The more immediate a saving or payment seems to you, the more you will "take it seriously," while credit card purchases or future savings are less exciting.
The only way to avoid ending the month with $0 is to avoid comparison. Forget about your wealthier armed neighbor.
Stop impressing the girl on Tinder.
This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions.