I have always worked hard for success to be able to fund the lifestyle I wanted whilst creating wealth. I’m not yet there completely, but making significant progress.
However, in doing so, I found I ran the risk of working to live, instead of enjoying my earnings with ease. Can you relate?
Coming from a poor background, I always aimed to be in a place where I have a significant surplus. Therefore, if for whatever reason I do not have an income, I’m not suddenly panicking because I have no guaranteed reserves to cover compulsory expenses.
I’ve had no problem with making sacrifices, because I know what my long term goal is. I am not in competition with anyone, other than myself.
It is very easy to become influenced by your wealthy peers, so it is important to always keep your individuality and never feel pressured to live beyond your means. If anything, it is always advisable to live well below your means – and never disclose or show your wealth.
Sybarites, if you aim to live comfortably and buy whatever you desire, but – sensibly – discreetly; then keep reading about the sacrifices I have made along the way which are paying dividends.
Avoid buying brand new conspicuous cars if you can
This is debatable – depending on how much research you have done, and the make and model of the vehicle you are buying. It is well known that a new car can significantly depreciate in its first year up to as much as 20% if you have not researched diligently.
That is a big deal when you think of that 20% you could have invested elsewhere, giving you positive equity.
However, you can buy new if you take advantage of special discount programs, example if you are buying with a company discount, or if you are buying the demonstrators at a significantly reduced cost. Always ask your dealerships about these as these can be significantly discounted.
I find vehicles tend to be cheaper if they are the end of year models, so do also check for this.
One other thing to never ignore is the warranty when buying used. Newer cars tend to have better warranties, and if you are very pedantic about features you cannot live without in your car, you may have to wait to find these in an older model which may be worth the wait. Also, remember, some new makes/models of vehicles can be so much cheaper than older models of very expensive vehicles.
It really depends what you are willing to drive. For example, a new Ford will be significantly cheaper than an older Range Rover but an older Range Rover may hold its value better over time.
Second-hand cars that are about two years old can save you a tremendous amount of cash. I mean, this is practically a new car. Do your research, and you should be able to find lightly used cars with long warranties left with as much as 50% off the buying price of the same model when new.
Keep it practical and avoid expensive luxury brands which can be expensive to both maintain and insure. These types of vehicles can also sometimes attract the wrong kind of attention.
The less conspicuous and expensive the vehicle- the less hassle it will give you – unless of course you are a peacock.
I recommend sacrificing new expensive cars, and you will see the cost savings which will help you keep your wealth.
Buy a modest house to preserve your wealth
We all need somewhere to call home. But at what cost?
Don’t be fooled into thinking that having a large expensive house means you are successful.
Buying a house is no mean feat. For most people, it is usually the most expensive acquisition they will make in their life. Therefore, think really carefully of what you can realistically afford to repay in the shortest time possible.
There are many ways to look at the word mortgage itself –which is coming from as far back as the 1100s, but has morphed throughout the centuries.
Mort :– death,
Mort gage:- death pledge.
Think about whether you want to be paying for a house until you are dead, or whether you want to free yourself of the pledge when you repay in full. Do not fall into the trap of being a victim of “keeping up with the Joneses”. It will not serve you well if you buy a lot more house than you need at a price more than you can afford.
Mortgage is a complex topic which I’m not going to delve into here as I’m not from a financial background- but let’s just say there just are a few invaluable principles to implement when thinking of owning your home.
Do you need that castle with 10 acres of land? Perhaps not, unless of course you are utilising that land and the building to provide an income. Sacrifice that luxury pad with useless space which is going to cost so much more in extra maintenance and taxes.
Yes, I understand you have an image to upkeep, but you can look for good neighbourhoods with perhaps the cheaper houses which will then give you an overall lower mortgage. You will still be in an affluent neighbourhood without the highest costs to repay.
Buy smart, for example where housing is scarce. Usually this can lead to high capital gains over a short period of time which can make you wealthy.
Otherwise, do not bank on any guarantees that buying a house with appreciation over time will make you any wealthier. Factor in inflation.
Aim to save as much of a deposit as is humanly possible – you are making a sacrifice to pay out less every month in the long run. Abstain from unnecessary high-end wants such as make-up commodities, low quality trendy clothing or frequent restaurant visits. Keep your diet clean and, if you must eat out, be very discerning.
Right now, the worldwide savings rate is depressingly low- therefore, it really makes no sense to save. An alternative is to use the money that you would be saving to pay off your mortgage early, which can help to save you a lot in interest rates. This is possible if your mortgage is low to begin with.
It can become impossible if the mortgage is too high, leaving you with very little disposable income which can leave you feeling burdened. Think of all the beneficial things you can do with that extra cash when you have no mortgage to repay.
If you must, move to a country with a high standard of living but with a low cost of living. This is the best trade-off to not only living a life of luxury; but preserving your wealth.
Get comfortable with being sensibly frugal
As Sybarites we want the best- and yes, so we should. However, we must be smart enough to recognise that overspending will put a dent in our finances. You will not keep your wealth by spending unwisely, and those spontaneous purchases can end up making you miserable.
On the other hand, the advantage to being frugal increases your financial margin to allow you to invest more, and yes- to give more.
Having a big enough margin is how you succeed by making sure that your money is working for you. If you are not sure how, get an investment broker. Any surplus you have- invest.
However, being frugal may harm you if you become cheap and tight. It narrows your mindset and prevents you having a sense of abundance. Having a mindset of scarcity will inhibit your ability to grow and succeed.
This is a fine balance, but it is important to have a mindset of abundance to be successful. Spend when and where you must to have a fulfilled life, but always without wanton abandon.
One tip I have is this – when making purchases, always try to source affordable options. It is not infrequent to find the same article at ridiculously different price points. Always research whether there is an investment potential, and buy for pleasure.
I frequently delay making random purchases. If I want to buy a bag, a pair of shoes, a coat, or a piece of jewellery – I tend to think of how much I can resell it for if I need to.
I buy for pleasure, but also for profit.
Send your children to the best schools for them
Again, this is an emotive topic.
I once lived in a city with dire educational resources for primary aged children. The best private schools were competitively sub-par at best. I had to think of my children’s futures – and in so doing, I made the sacrifice to relocate- leaving all I knew behind.
You may not have to sacrifice relocating, but you may have to think about long commutes or moving to housing or communities which you may feel is not ideal for you.
You may even have to sacrifice a little in your relationship, for example, if one spouse has to live somewhere else whilst you secure your children’s futures. You may even have to sacrifice taking regular family holidays to fund your children’s education.
These can be huge sacrifices to make, therefore, it is advisable to spend the time to think about whether it is really worth it for you and your family’s health and wealth.
Finding and sending your children to reputable schools is a sacrifice that usually pays dividends in the long term. However, this does not necessarily mean the most expensive or indeed the most elite schools.
What is important is the opportunity to gain a stellar well-rounded education with access to the best resources for your child, whilst taking their needs into consideration.
The best schools tend to attract teachers of a high calibre including those with specialist knowledge or interests which will ensure your child gets a superior first-class education. This may then set them up to getting accepted into some of the best universities, as these schools tend not to have such a narrow curriculum. Therefore, if your child is not academic, they may not be limited by a lack of opportunity.
Sports, the Arts and languages, which sometimes are neglected in mainstream schools are usually included in the curriculums of elite schools, which can lead to opportunities in these fields later.
Social networking is also to be considered, as they more than likely will acquire contacts that will serve them later in life. There is an adage that successful people tend to stick together and create opportunities for each other.
How does this save you money? Well, having a stellar education creates better prospects. They more than likely will secure well-paid employment, or nurture entrepreneurial tendencies.
This then equips them with the financial resources to fund themselves, therefore, gaining financial independence faster. They may also end up marrying well, contributing to your family estate.
Sacrifice ftiends who celebrate being and remaining poor
I cannot think of anything worse than being around negative people with self- limiting beliefs. Not only do they dehydrate your emotions, but they deposit their toxins within your mind.
If your friends are not encouraging of your efforts to succeed – disassociate from them. You will never become successful if you are surrounded by people who do not have a mindset of success and prosperity.
There are some traits that you should actively seek out in your friends, to determine who you should weed out.
Avoid friends who take pride in being poor, have a persecutory mentality or harbour jealousy and contempt for successful people. They will try to sabotage your efforts at success, and try to make you feel guilty for respecting money and wealth.
Avoid those who are ignorant aimless selfish pleasure seekers, but also those penny pinchers who believe hanging onto their every penny in savings accounts will secure their retirement.
Another cohort to avoid is the religious fanatic who associates money with evil, greed or sees ambition as a grave sin.
As Sybarites, we thrive on pleasure, but we aim to have enough abundance to be able to give back.
Do not feel guilty for avoiding friends who wreak a negative mental toll on your mind.
Instead, surround yourself with like-minded people who will foster your growth, provide opportunities and help you to keep your wealth.
To remain successful and wealthy, there are some sacrifices that you should consider making.
Start thinking about them early if you have not already done so, because these will add value to your life over time.
However, don’t think about them as sacrifices. I mean, this may make you feel rather persecuted. Instead, think about them as investments.
The aim is to desist from seeking instant gratification and focus more on discipline in order to reap the rewards later. It is worth it.
What did you think of this post by the way? Do you agree with my observations?
Have you sacrificed anything to preserve your wealth? I would love to hear.
Please share in the comments