Our Best and Worst Purchases
To continue our discussion on financial independence, I thought I would share with you our best and worst purchases that we’ve made on our journey to FI. Maybe these will resonate with you or maybe hearing these will help you avoid the money pitfalls we found ourselves in.
Of course we’ve had a ton of awesome purchases over the years, like you. But with this short list we really wanted to try and think of items that brought a lot of value to our life - through finances, time or joy. I’m sure you know what I mean...those items that cost a lot but are sooo worth it in the amount of time or joy it gives back to you?
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Alright, let’s get to the list. Drumroll please…..
~ Our Best Purchases ~
Hiring a Maid
No, we aren’t super rich but we do live in a country where hiring assistance around the house is cheap. Like $80/week cheap in Angola (5 years ago). When we lived in Angola, we were both working. We left our house at 4:45am to catch the carpool bus and got back home at 5:30 so you can imagine the last thing we wanted to do on our weekends was clean the house. So yes, we had a maid that came 5 days a week to keep our house clean. But more importantly than the affordability, it allowed us the much needed time to relax and rejuvenate before the next work week. If we had spent a Saturday cleaning each week, we would not have performed very well at work on Monday or enjoyed life in Angola near as much.
This purchase was really more about asking for help - not necessarily a maid specifically. Maybe it’s not a maid for you but a babysitter to watch your kids for one night each week so you can have a quiet meal out of the house. Or if you’re drowning trying to keep up with your online business and planning your family's upcoming trip to Disney - hire a virtual assistant to help plan that trip. There are people out there who love doing that stuff.
And if spending money is not an option, then try and find someone to “trade time” with. Watch your friends kid one night and then she watches yours the next - you both will get a free night. You have to get comfortable asking for help when you need it. Freeing up your time to focus on what really matters to you will bring a lot of value into your life.
Our First House
Andrew thought purchasing a home would be a good investment for him to help start building wealth so he found a neighborhood that was in transition but still affordable where he could afford to put down 15%. He purchased it for $240k and 5 years later, when we left for Angola it sold for $380k, which netted a profit of $140k but we also did spend about $15k to do updates before selling it. We put the profits from selling the house in index funds and it has sat there and continued to grow for us.
Now obviously this is not a typical way a home grows in value. Sometimes, yeah. But not always so I’m not here advocating you go out and purchase a home just for an investment. In fact, I think there are many times when you should rent vs. buying. We’re even looking at renting if we get sent back to Houston because we know we don’t want to live there long term. But for us, personally, buying that first home really worked in our favor.
The biggest thing Andrew did, and you can too, to try and ensure you do get a return on your home investment, is purchase only what you can afford. And to look for something that you can put your own touch on or update. Many people want something completely finished when home buying but if you’re able to see a future vision for the home and willing to put some hard work and love into it, that will certainly help your chances for turning your home purchase into a great investment.
World Pin Map
This was a smaller purchase we made when we both realized we had a passion for travel. It’s a big map of the world that we put pins in whenever we travel to a new place. I enjoy looking at the map and reminiscing about the places we’ve visited and for inspiration on future new travels. Sometimes I look at it and feel proud of all the places we’ve gone and at the same time I’m reminded of how big the world is and how many places I still want to go!
This item is about highlighting one of our values - travel. It’s a way for us to put the value of travel up front and center in our apartment and our everyday life. We love to travel for many reasons, a few being experience, culture, excitement and curiosity. What is something you value in your life? Maybe there’s some way you can see it everyday to give you motivation, hope and excitement. If family is a big value for you then you could invest in some enlarged prints from your last family vacation. Every time you walk past the prints hanging on your wall, you’ll be reminded of the awesome time you had and how you’re currently saving up for your family’s next adventure.
If travel is one of your values too and you are interested in tracking them on a big, beautiful map, this is the one I purchased and I’ve loved it everyday for the past 6 years.
~ Our Worst Purchases ~
Expensive Purses
Full disclosure here - I would buy name brand purses when I couldn't afford them. Like $350+ on a purse. I have a feeling I’m not the only one….
I started this habit my senior year of college. For some reason I felt like I needed a Coach purse, and not just any Coach purse but one with the Coach “C’s” all across the outside of it so everyone could clearly see the brand.
And I think they actually did make me feel richer when I was out and about with them dangling off my arm. But the truth was, I used a credit card to buy those purses and I could not afford them at all. Back then I was only paying the minimum on my credit card balances which meant I was probably paying a 16% interest rate to carry around those bags. Which is sooo much money wasted just to look cool.
Buying things that make us feel richer will not change our bottom line. Well, it might make our bottom line go down which is the opposite of what we want! Whether it’s expensive purses, belts, shoes, clothes, cars, etc. To get to your ultimate goal of financial freedom, you need to only purchase what you can truly afford. And for now, that might be the $25 purses at Target (which are totally cute). Save the flashy name brands for when you’ve hit 7 figures!
A Brand New Car
Andrew bought a brand new car a few years before we moved overseas. Granted, we didn’t know we were going to move however as you can imagine, buying a new car and then having to sell it a few years later resulted in money being lost. But the lesson here is really in purchasing pre-owned, especially when you’re building up to financial independence. If he had purchased a pre-owned car the hit would have been much less when we went to sell it.
Are you in the market for a new car? Or are you just wanting an upgrade to your current situation? I know it can be easier said than done but if you purchase a reasonable car that is well below what you can afford you can use the extra money you were going to put towards monthly payments and put it in your savings account. Within a few months you’ll easily have a couple thousand saved up. Now imagine if you put that money in an investment account - that money you were going to spend on payments will now have compound interest on its side for years to come.
There are lots of resources out there on this topic but I will say that a vehicle purchase can be a big derailment when you’re working towards financial independence. Remember, it’s just something to get you from point A to point B. And people that judge others based on the car they’re driving are just plain rude.
Holiday Decorations
Yep, I said it. Oh, you like to decorate for holidays too? Do you buy new decorations every year? Just “a few” to “add to your collection”? Be honest, has your “collection” gotten a little out of hand? Well this was me.
I grew up in a house where we decorated hard for the Christmas holiday. And new decorations were purchased each year it seemed. Even in January when they were half off...but maybe that was just an excuse to buy even more? And will you even still like those “half-off” decorations in 11 months when it’s time to put them out? Do you just end up buying them because it’s such a good deal?
When I became an adult I thought I needed to decorate hard for each holiday to celebrate properly. It wasn’t until I moved overseas when I realized a lot of other countries barely decorate at all. From then on, I haven’t purchased any holiday decorations at all - just using what I’ve had for 6+ years.
But I’m sure when I move back home to Texas I’ll fall back into the Christmas decoration trap. Is this you too? You know you shouldn’t buy so much but really want to celebrate in a big way? Well I was shopping with my friend Amanda a couple years back and she gave me a tip that is just genius. Here it is - buy decorations with a neutral theme. That way they are classic and timeless and never go out of style. Like linen white and light brown. Or black and white. Stay away from big bright pieces that you’re not sure if you’ll like in 5 years time. I think we can all agree a simple classic decoration stands the test of time and is also more friendly on your budget!
So there you have it...our best and worst purchases in terms of value they’ve added to our lives. What’s on your list? Did you make a bad purchase that you still have? Maybe you can sell it and put the cash in an investment account.
Most importantly, don’t beat yourself up over purchase mistakes. Learn from them and move on. And celebrate the purchases that have truly made you happy or have been a great investment for you. The journey to financial independence is a long one and you need some celebrations on the way!
Feeling inspired? Read our next post on 5 decisions you need to make to grow your net worth! -->>
