Only after publishing CD Investment Alternatives did I realize the article is irrelevant to those of you who don’t save or don’t save much. I’m always trying to make my articles as relevant and helpful to as many readers as possible, so I apologize for skipping over you non-savers.
This article is an attempt to help spenders spend more and not feel so guilty about blowing all their money. It’s sometimes hard coming up with new ideas on how to spend your entire paycheck every single month. Year end bonuses are meant to be spent in celebration, not tucked in some pathetic 2% CD.
Tax refunds are also a bonus too right? It’s not like you’re getting back your own money you lent to the government interest free all year. Gotta spend the financial windfall on something nice! I’m here to help you develop a spending mindset and make you feel great about blowing all your money. I’ll also provide you a great list of things to splurge on to increase the quality of your life!
HOW TO DEVELOP THE SPENDERS MINDSET
1) Tell yourself you are special. It doesn’t matter if you did poorly in school, don’t stay late at work, haven’t bothered to build any alternative income streams, or don’t work well in a team. What is important is always telling yourself that you deserve to have and experience as much as any wealthy person around. Who cares if you’re 30 and have a net worth of only $50,000 compared to the average net worth of the above average person of around $150,000. You’re doing just fine. The more you tell yourself you will be fine, the more fine you will become until you get old.
2) Believe in bigger government. The great thing about a growing government is that it’s spending more money on the people who put our politicians in power. If this wasn’t the case, our wealthy leaders would be thrown out of office. It’s natural for citizens to vote for government spending which benefits them without having to pay more taxes. It’s also natural for a politician to take as much money from the kitty as possible to shower their constituents given they can’t hold power forever. With a huge government safety net, you won’t be afraid to run out of money, because the government won’t run out of ways to steal.
3) Lash out against those who save. Savers are no fun. They are all miserly people who don’t know how to live it up. Savers make spenders look and feel bad due to their greater financial security and less stressful lives. The solution to getting back at savers for making us feel stupid is to highlight how awesome our lives are. Tell them they are missing out by not taking so many great vacations. Tell them they are being parsimonious for driving cars that cost less than 20% of their annual gross income. Tell them they are being fools for working so hard while you’re having an awesome time. Don’t tell them that you secretly can’t stand your job and can’t fathom doing the same thing for the next 10-20 years.
4) Remind yourself you can die tomorrow. Reality stars Heidi and Spencer Pratt had a great time spending all their cash ($10 million) in anticipation of the Mayan Apocalypse on Dec 21, 2012, why not you? They’re only 26 and 29 years old, respectively. You’ve got just as much talent as they do for making lots of money. Although the median life expectancy is around 82 years old, forget it. You plan to die young, baby! Here’s proof your health and your weight are not your fault. It’s all about working to live rather than living to work. Let the future come as it may. We’ll be ready.
5) You can always make more money. If you live in a free country (not North Korea), you can always take in cash. There are millions of jobs that go vacant due to undesirability or a mismatch in skills. If you get desperate, you can always take the jobs that nobody wants to survive. Thanks to the internet, it’s easier than ever to start a business and get rich! In fact, I’m taking a bubble bath in hundred dollar bills right now. When I’m done, I’ll just call Alfred the butler to bring me my beluga caviar and mimosa.
6) Believe someone special will take care of you. Even if the government doesn’t hook you up if you run out of money, someone special out there will be there to solve all your financial worries. There are more than six billion people in the world today. Chances are astronomically high that you will find the love of your life. Maybe a good portion of the six billion people aren’t exactly wealthy, but who cares. You’re good looking enough to snag some sugar. Marriage conquers all, especially if you are broke and in debt.
7) Forget the poor. Only focus on YOU. Given we can all die tomorrow, we should ask what our country can do for us, not what we can do for our country. You’re already having a difficult enough time keeping your head above water, so what makes the poor think they deserve a helping hand? Let greedy rich people donate their money to fight diseases and unjust causes. Let those with a lot of time on their hands due to financial independence volunteer to become a big brother or big sister. Your children and your future family will be just fine. You don’t got time for this.
IDEAS ON HOW TO BLOW LOTS OF MONEY
Now that you’ve got your mind straight for why you should always spend everything you earn, let’s discuss some great ideas on how to blow lots of money!
1) Buy a car equal to or greater than your annual income. If you make $50,000, check out the upcoming BMW 335i coupe this Fall for $58,000. It’s sweet! Better yet, consider taking out a loan or a lease to buy your nice automobile. Nothing like borrowing money to buy a guaranteed depreciating asset to show off to your friends. Going from point A to point B in style is important in this day and age. We need to post about our material possessions on Facebook because we’ve got hundreds of neighbors to keep up with now. Besides, you don’t want to be caught dead valet parking a Honda Civic do you? The 1/10th rule for car buying is impossible to follow.
2) Buy only brand name clothing. Forget Ross Dress For Less, Target, and Walmart. Those stores are for thrifty losers. Even though you know that staying in shape is the main way to look your best (ever see an overweight mannequin), you need to buy Ferragamo, Louis Vouiton, Gucci, Prada, and Armani. Who cares about the 90% gross margins luxury companies are making. Don’t be a cheap financial dumbass. Dress for success or dress to fail.
3) Always get the latest electronic gadgets. It’s important to get the latest iPhone or Android as soon as they come out every six months to a year. If it takes standing in line for a ticket for hours, so be it. It’s important to always be able to “check-in” at your favorite bar and send out Tweets with nice photo filters to your friends. It’s kind of crazy how people survived without smartphones just 15 years ago. There’s going to be an accelerated product offering cycle of both Apple and Samsung products this year, so get excited!
4) Take exotic international vacations every year. Staycations or domestic vacations are for savers. Despite having only explored less than 10 different states, it’s all about going abroad. As a spender, you deserve to go to Europe for two weeks and spend 10% of your gross salary on a vacation. If you’re European, why bother taking JetBlue or Eurorail across the continent? Come to Milwaukee where you can drink the finest beer in the world. It’s all about seeing the world young because the world might not be around when we are old. I’ve seen the future and it looks so bright!
5) Always pay by credit even if you can’t afford it. The reason why you have a credit card and a $10,000 limit is because your credit card company believes in you. If they didn’t believe in you, they wouldn’t issue the card! You’re young and good looking so you deserve the best even if you can’t even afford your own apartment. You’ll make more money one day, so don’t worry about the 15%+ interest costs that compound over the years. Credit cards are convenient and allow you to live it up. If your friend can pay off $35,000 credit card debt in one month, so can you.
6) Get a fancy apartment. When you’re young, it’s all about having a swanky bachelor or bachelorette pad to impress your guests. If friends can see success, then you must be successful. No luxury car worth more than your annual income should be parked in a crummy apartment. If you don’t want to rent, then definitely look to buy even if you don’t have 20% down and a 10% cash buffer. We’ve got FHA loans by the government that allow homeowners to put only 3% down with no savings buffer. Certainly, nothing bad could go wrong in such a scenario.
7) Buy a timeshare or vacation property. Who cares if timeshares and vacation properties have proven to be one of the worst investments ever. I should know, I’ve got a vacation property that has lost a lot in value. Even if you seldom visit your property, if you can just get the one special experience while owning the place, it’s all worth it. How cool would it be have multiple vacation properties all over the world and let your clients, friends, and family stay there for free? You’ll never feel homesick while on vacation again. Booking a hotel room on a per needed basis is so ordinary. You are not ordinary. You are special.
8) Get multiple degrees without a plan. Education costs are skyrocketing because education has an inelastic demand curve. Harvard can probably charge $100,000 a year in tuition and the acceptance rate would still be below 10%. Why stop at one Masters degree when you can have three? If you don’t know what you want to do with your life, go to law school. It’s prestigious, only takes three years, and only costs $150,000 to attend. The government has the Income Based Payment (IBR) plan now, so don’t worry about all those student loans. When you graduate, you can call yourself an esquire. If you aren’t feeling too spendy, consider getting a PhD. Although it takes 4-8 years on average, you’ll at least get paid to go to school.
9) Pay more taxes. It’s important that everybody pays state and federal taxes to support our country. Even though the government arbitrarily invades other countries and acts like they own the world, it would be unpatriotic not to fund the beast. If you are lucky enough to make money, you better be honorable enough to pay your taxes you ungrateful whino. If you are fortunate enough to make more than the median household income of $50,000, then consider writing an extra 10% check to the IRS given they are doing such a bang up job with your money.
10) Go to Vegas, baby! Vegas is a natural wonderland where anything can happen. You could win $8.5 million dollars by becoming the World Series of Poker Champion too. You can sell all your stock today given the market is up about 6% YTD and put all your proceeds on the 49ers to win the Super Bowl. After the 49ers win, you’ll have increased your returns by 112% and can take the rest of the year off to travel, spend time with family, and do what you’ve always wanted to do. There’s a great saying, “No bet, no win.” If you love to spend money, Vegas is the best place to leave nothing behind.
SPEND MONEY LIKE THERE IS NO TOMORROW
Hopefully this article has given you plenty of reasons why it’s OK to spend all your money and not feel bad. Savers of the world are such silly goats who don’t know how to enjoy their lives. While they are diligently saving for the future, you get to live it up and get bailed out by the government if you mess up. Spenders help stimulate the economy, grow corporate earnings, get more people hired, and subsequently make investors lots of money. Why do you think we’re back to record highs in the stock market? Enjoy life!
RECOMMENDATIONS TO BUILD WEALTH
Refinance Your Student Loans: SoFi is one of the leading new financial technology companies based in Silicon Valley that not only reviews your credit score and income/debt ratios, but also looks at the quality of your education and quality of your work institution. If you’re right out of school, you’ve got a lot of upside, but perhaps your finances don’t look so great at the moment. That’s where SoFi can really offer lower rates because banks and government lenders can’t look at individuals holistically. Check SoFi out for a lower interest rate.
Refinance Your Mortgage: The Federal Reserve is planning to raise interest rates in 2016 and beyond after seven years of keeping interest rates close to zero. If you haven’t refinances in a year, or are thinking about buying a property, lock down a low interest rate now by at least checking with LendingTree to see what’s available. LendingTree has one of the largest networks of lenders that compete for your business. When banks compete, you win!
Manage Your Money For Free: You don’t have to be rich to manage your money. You can take action by signing up for Personal Capital, the #1 free financial tool to help you track your net worth, manage your expenses, analyze your investments for excessive fees, and plan for your retirement. Ever since signing up in 2012, I’ve been able to grow my net worth by over 100% because I know exactly where my money is going. Once you have a plan, it’s much easier to achieve your goals.
Updated for 2016 and beyond!