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Buying Your Luxuries Like The Rich

Updated on September 1, 2017

You Don't Have To Go Broke Buying Your Luxuries

Have you ever bought something just to feel like you regretted it over time? Have you ever bought "more car than you can afford"? After reading this post, you're gonna learn some of the principles learned from the author of Rich Dad Poor Dad, Robert Kiyosaki. If you want to buy the newest car that you feel is out of your price range, the information in this post will shock and amaze you.

Price Won't Stop You From Buying The Car Of Your Dreams

Driving around in a beat up hooptie doesn't give you that good feeling you get if you were driving around in the car of your dreams. The worst part about driving around in old, beat up cars is something is always breaking down, making you spend more than the actual value of the car. Wouldn't it be nice to drive around in a newer, reliable car with less mileage and less wear and tear? You may have your eye on a car that's gonna run you about $25,000, but feel it's way out of your price range.

The next time you go to the dealership, talk to the dealer and get his or her information. Make sure you find a dealer who cares more about your satisfaction with the car rather than making a sale. Let the dealer know you are interested in buying, but you want him or her to get the sale for being so helpful. In their minds, you're the prospect of their dreams because when you are ready to buy, they won't have to work so hard because you have built a relationship with them. The sale is in the bag! So let's say the car you have in mind is $20,000. In the next sections, you'll see how affordable this car can be even if you get paid minimum wage and knee deep in other bills and other debt.

In The World Of Money, Credit Is King

You may not have been taught this in school or in your home, but if you have bad credit, or no credit, you will struggle achieving levels of financial success and buying the things you've always wanted. This could be a house, a boat, or even a car. It feels way better to know you have the power to borrow $10,000 whenever you need it than struggle trying to save that much money over a course of time. Depending on how much money you make at your job (or however you make your money), it could take years to save, when, if you had good credit, all it would take is a moment of your time.

You want to make sure you have good credit. You want to get good interest rates so you won't pay such a high monthly payment. You may take out a loan for $10,000, but after you've paid it off according to their terms, you may have really paid $20,000 in actuality. Treat your credit sacred. Make sure you never miss a payment and keep your debts low. This makes you a lower risk, which makes lenders want to lend you money.

Buying Your Asset To Pay For Your Liability

According to Robert Kiyosaki, he mentions in his works that you have two types of debt:

  1. Good Debt
  2. Bad Debt

Good debt puts money in your pocket and bad debt pulls money out of your pocket. For the most part, we usually buy things on credit, like a car or other luxury item and it takes money out of our pockets, which can keep us poor. This is bad debt. The rich, on the other hand, will go out, look for an asset to buy, which puts money into their pockets. It doesn't matter if it's $100 or $1,000 a month, as long as the asset is making them money. Once they get the asset (or a number of assets), they buy the things they've always wanted.

Once you have established a good credit history over time, you will focus your attention on buying your first asset. This could be a vending machine, real estate, a website, an app that pays you each month, etc. You want to buy something, or invest in something that makes a consistent amount of money over time.

Let's say you borrowed $3,000 from a loan office and used that money for traffic for your website (or a hub). Let's say, after your loan payments and web-related fees, you have a net income of $500 a month. Imagine you pay off your loan in 6 months and re-apply for a $3,000 loan every 6 months. This $500 a month is what you are making consistently. Some months you make more, some months you make a little less. This is a reliable asset you can use.

Let's Go Back To The Dealership

Over a course of 8 months, you go back to the dealership. You talk to the dealer and are ready to buy your car. You apply for and get approved for an auto loan, you give the dealer a $4,000 down payment. You drive off the lot in the car of your dream. You do the math later on and find out that after your car loan payment and insurance, you're paying $450 a month. Your website is making an average net income of $500 a month, so you are able to pay your car on a monthly basis if you had a job or not.

The problem that the poor have when it comes to buying their cars, they use their job income to make the monthly payments. If they lose their job, they lose their car. If you use assets to buy your cars and luxuries, even if you lose your job, you are still able to keep your car because your job isn't making the payments... your assets are. An asset can be anything. From real estate to a web page that collects emails and sends people through a sales funnel, it really doesn't matter what type of assets you collect. Most wealthy people have a number of asset mixes like real estate, stocks, businesses, vending machines, etc making them money. They do not restrict the type of assets they buy. If you can make an extra income without using your blood, sweat, and tears by getting a second job, you can become wealthy over the course of time.

More Assets = More Luxuries

The best part about this strategy is you could be making minimum wage and still buy a brand new car if you wanted. The principle is very simple but highly effective. The more assets you buy, the more luxuries you can easily afford. So let's say you worked as a busboy at a restaurant making $1,000 a month. If you have good credit, and smart about the type of assets you're collecting, you could buy a $40,000 brand new car without the need of getting a second job. We're talking about a car right off the shelf with zero mileage!

The wealthy buy more assets to make more money. The poor and middle class work overtime to make more money. If you work overtime, you'll get burned out over time, which makes you hate the thing that's making you money. This keeps you chasing jobs that pay a higher salary. The problem is the more money you make, the more likely you'll want to buy more luxuries and it becomes a vicious cycle. The wealthy, on the other hand, become richer when they want to buy their luxury items. If you 10 assets paying you $200 a month each and each of them are paying off loans over a course of 4 years. Once those four years are up, you'll have still have an extra $2,000 a month that you can use for whatever you want.

The rich get richer not because they make more money at their jobs (if they have jobs). The rich get richer because they keep buying assets that pay for their luxuries.

Rich Dad Poor Dad Is A Book I Highly Recommend And Has Changed My Life

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