No Longer Buying These 7 Things Made Me Rich, According to John Liang
In a YouTube video, financial influencer John Liang recently shared some of the spending habits you can change to build wealth faster. The money-saving strategies he recommended do not warrant substantial lifestyle changes, but they are very effective.
Getting rid of the following recurring expenses in his 20s helped him achieve financial freedom in his 30s.
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1. New Cars
Liang refered to new cars as the No. 1 wealth killer and mentioned that the average car payment is between $700 to $800 per month. That’s why he sticks with an older car instead of getting a new vehicle every few years. A car is just designed to get you from Point A to Point B and viewing it from this mundane lens makes used cars more attractive.
2. Cheap Things
Buying cheap things sounds like something that would save you money. However, cheap products are often poorly made and require replacements sooner than expensive products. That doesn’t mean you should buy a new car. However, if you buy a cheap car that has over 200,000 miles and has been in multiple accidents, the future repair costs may make it hard to justify the low price.
You can apply this mentality to clothing, furniture and any other product. Frugality is good. That involves buying the best available product based on price and quality. Looking at the price of something without considering quality results in cheap purchases and replacement costs.
3. Food Delivery
Apps like DoorDash and Uber Eats are easily accessible and save time, but you end up with higher bills in the end. Liang recommended picking up your own food to save money, but it is even better if you make food at home. Not only is it cheaper to prep your own meals, but it’s also healthier.
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4. Flights
Flights can take a toll on your finances and when Liang took several of them for a long-distance relationship, he came up with a strategy to minimize these costs. His strategy was to open credit cards with big sign-up bonuses and rack up travel points. He estimated that credit card points save him $40,000 per year on travel costs.
5. Latest Tech
Chances are that you do not need the latest smartphone, computer, TV or action camera. Liang realized this when he built his TikTok and Instagram pages by filming on an iPhone 11 Pro. He remarked that he just needed the smartphone’s camera and while other smartphones have more features, those perks don’t matter since Liang uses his smartphone for its camera.
Liang estimated you can save $1,000 to $2,000 per year by avoiding the latest tech and using what you have.
6. Complicated Investments
Getting rid of expenses like the latest tech, ongoing subscriptions and food delivery will add up, but Liang believes you can save the most money by avoiding complicated investments. He recalled how he lost $5,000 by investing in GoPro shares right at the IPO.
It was a lot of money to him at the time and it caused him to focus on low-cost index funds moving forward. He puts 98% of his assets into these funds, which produced an 18% return over the past year.
7. Discounts
Discounts are another money drain because they make people buy things they wouldn’t have bought otherwise. It’s even worse since discounts make people feel like they made smart purchasing decisions. Getting an item for $70 that normally costs $100 feels like a steal, but you’re still down $70. Liang encouraged people to only buy things that they need and to avoid spending for the sake of spending.
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This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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