One of the selling tactics that I have been hearing more and more these days is to make purchases as a “lifestyle investment.” The entire term bothers me in a number of ways, but the worst part is be bringing in the word “investment” into the dialog, the salesperson is trying to make you believe that these purchases will somehow pay-off like traditional investments do.
The truth is that they will have the exact opposite effect and drain your wallet faster than most purchases. In fact, most (but not all) of these “lifestyle investments” are depreciating assets that lose a great deal of value once the purchase has been made. These are the types of items which the salesperson tries to make seem like a great idea by convincing you that it will be a marker of your social status, but the items are simply for show and will never truly make you happy. Here are some of the lifestyle investments that you should avoid if you want to truly make good financial investments with your money.
Luxury cars are one of those lifestyle investments that are better to avoid. While luxury cars can be nice to own, and will certain give a nice boost to your ego and social status, they’re not worth the money. Many people tend to splurge on luxury cars only to let them sit in their garage because they’re too afraid of ruining it. Or they end up not being able to afford the monthly payments on the car or the car’s upkeep, bringing them more trouble than joy.
In this day and age many people believe that owning a mansion or extremely large house is a status symbol they are entitled to own. If you’re financially stable enough to buy a mansion, go ahead and buy one. But if it’s something well out of your financial zone, don’t even bother giving yourself the aggravation of trying to afford it. Not many people need an overly large house to make them happy, so it’s best to avoid the idea of buying one altogether.
Timeshares have been banned from selling themselves as investments as the industry once did long ago. Not being able to do this, they simply changed their sales pitch to them being “lifestyle investments.” Timeshares are rarely a good deal and tend to be more of a money suck than anything else. After all, you’re paying to use your resort rental for a few weeks out of the year and those weeks are determined by the resort. Not to mention you have to pay any associated fees and maintenance costs and interest payments if you don’t buy the unit in full. Then when it’s time to sell, they are worth a fraction of the price you paid and sometimes it is even impossible to give them away for free. Timeshares are another luxury item you should avoid.
Expensive Vacation Homes
Like timeshares, expensive vacation homes are luxury items to avoid. Vacation homes can be a nice change of pace once a year, but they’re also very expensive and can have numerous unanticipated costs that can add up quickly. If you don’t have the financial stability to own two houses, the vacation house should go. Sure, it sounds nice to say that you have an international vacation house or a beachfront property, but it won’t be as nice when you can’t pay the bills to keep that house.
A lot of people crave plastic surgery, but an equally large amount of people end up regretting plastic surgery after they’ve had it done. It’s usually an expensive process that insurance doesn’t cover (as long as it’s cosmetic and not medically necessary, that is) and sometimes it ends up being more money than it’s worth. It’s a lifestyle investment that you’re always going to have to maintain and might end up causing you more aggravation than you originally intended.
Designer clothing might not seem like a lifestyle investment, but it is for many people. After all, there aren’t a lot of people who can afford to pay $500 for a shirt or $2,000 for one dress. It’s nice to own one or two pieces of high end clothing, but this should not turn into a lifestyle, especially if you know it’s a lifestyle choice you can’t maintain. While there are certain designers that make quality clothing, a lot of designer clothing isn’t worth the money since you can find similar outfits or products for much cheaper on the rack.
Additionally, designer accessories are another lifestyle investment to avoid. No one truly needs to buy a $1,000 watch or $10,000 purse. These are items that aren’t necessary to your wellbeing or everyday life. If you don’t have the money to afford these items without putting yourself into debt, you should just avoid owning them completely.
Many people want to own recreational vehicles because they seem like they’ll be a lot of fun to use. And who hasn’t wanted to own their own boat, jet ski, snowmobile, or motorcycle? They’re flashy and fun. But sometimes these items are ones you should avoid. For instance, did you buy that boat juts because you’ve always wanted one? Have you gotten your money’s worth from it? Do you even know how to use it?
Over the Top Entertainment Systems or Tech Products
Lately it seems as if the latest over the top technology products and entertainment systems are becoming lifestyle investments that everyone thinks they’re entitled to. While it’s nice to have a huge TV or the latest smartphone on the market, you need to be careful not to go overboard on some of these products. After all, will an entire room dedicated to top of the line entertainment products really make you happy when you can’t even afford your rent or your electricity bill?
Expensive Household Furnishings
There are a lot of people who like to buy expensive household decorations to show off their wealth or their status. More often than not, the average person won’t care about these decorations or won’t be able to determine their net worth. Expensive household furnishings are something you should avoid for the sake of your bank account.