Self-Made Millionaire: This 'Status' Purchase Taught Me a Firm Lesson
Before you swipe that credit card, do you really want this big purchase, or do you just want the respect that may or may not come with it?
A recent study by Kuoda found that private jet journeys are the most exclusive luxury experience in the world, with trips around the globe starting at $181,000 and a monthly search volume of nearly 1 million. The rest of the list included luxury experiences like private wellness retreats and polar expeditions, proving that there are plenty of people with an appetite for status purchases. While it can be amusing to peruse lists of unique experiences, these status purchases aren’t always worth the cost, even for those who are millionaires.
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We consulted with a self-made millionaire who spoke about a status-symbol purchase that ended up costing her a lot of money and wasn't that useful in the end. Dr. Olga Bachilo, a board-certified plastic surgeon and founder of Glamour Plastic Surgery and Med Spa in Houston, Texas, shared her experiences with spending a significant amount of money on a private golf club.
The Status Symbol Purchase That Wasn’t Worth It
“After completing my residency in 2017, I built my practice from scratch," she said, "and by 2021, I had reached the seven-figure mark with a combination of surgical volume, a thriving med-spa side and a reputation that was entirely patient-driven.”
At this point, it was a natural decision for Bachilo to join a private golf club with her friends and colleagues, since she had already played a bunch of times. She felt that this was the next logical purchase for a self-made millionaire to make.
What Were the Costs?
The initiation fee alone was $80,000. Plus, annual dues were about $12,000 to $15,000, which she had to pay even if she didn’t play golf for extended periods.
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Why Was It a Total Waste of Money?
Bachilo estimated that between running a surgical practice and managing a growing med-spa, she was getting out there maybe six to eight times a year at best. After running the numbers, she found that every round of golf cost somewhere between $1,500 and $2,000, just in prorated dues. This was before green fees, the dining minimums and the unwritten expectation to entertain guests there.
She originally felt that joining a private golf club made sense because it was expected of successful people, and because there would be numerous networking opportunities. However, the math didn’t work out and very little networking occurred because she couldn’t attend the course often enough to play.
What You Need To Know About Vanity Purchases
There are two important lessons to take away from this vanity purchase.
Lesson 1: The Money Could’ve Been Better Utilized
“It wasn't only the money that was going out of my account each month,” Bachilo said. “It was what that money wasn't doing elsewhere.”
She pointed out that if she invested the $80,000 back into the practice or put it into index funds at that stage of business growth, it would have compounded significantly over the following years. The money allocated to the private golf membership didn’t yield any returns and became more of a hassle.
Lesson 2: You Could Be Stuck With This Purchase
Bachilo stressed that you can be stuck with your status purchase in some cases. She learned that most private clubs won’t refund initiation fees and the resale of your membership depends heavily on whether the club has a waiting list that will take it. That luxury purchase that you view as a treat can bring you more issues in the future.
“So my advice to all people who hit seven figures," she said, "is to think about every decision you make. If it isn't generating a return, building your business or buying back your time in a meaningful way, it's a liability dressed up as a reward.”
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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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