All right, let's have some fun. Let's talk about some of the things that I think are a complete waste of money that we need to stop spending on. Here's the thing. Our ability to build wealth, our ability to have financial freedom, our ability to live life by our own design is dependent on our behaviors, our habits, our choices, more so than our money. It's what are we doing with the money that matters.
And too often, we get caught in societal pressure, we get caught in social media pressure, we get caught in peer pressure. We think that we should live a certain lifestyle because we see the marketing and the commercials and, oh, my gosh, I got to get that luxury car or that sports car, or I got to go on that vacation. And we never think about, what do I want? I think that we were put here to live our life our way. And as long as it's legal, moral, not hurting anyone, you have the power
to do that. And if that is a tent in Montana, more power to you. If that's a yacht in Monaco, let's do it. Or if it's something in between, it's your choice. But what we tend to do is we get used to what happens as society has normalized certain kinds of expenses. Expenses and marketing has created urgency around certain kinds of expenditures. And now, all of a sudden, we do things without understanding the economics behind it. And in this video, I want to
break it down. I want to let you know where. I think that it's a complete waste of money, and we need to avoid it. All right, so let's do this. We've got. We've got ten of them, but I might have one or two bonuses at the end, too. So let's just start with the first one. And this one is a. It's a big one, and I think it affects a lot of people's lives. And that is. This is one is high interest debt. Now, I'm going to say high interest debt greater than 6.5% or so. Okay. Interest rate.
Now, here's the thing. And most credit cards are three, four, five times that. It's 2020, 8% right now. So this. I'm talking primarily about credit card debt. High interest debt, consumables that you're financing. This is your lifestyle. These are luxury vacations and stuff that you can't afford to pay cash for. You're deciding to finance it on a credit card because it's easy. The reason they gave us credit cards isn't to give us credit.
Marketers were smart. The reason they gave us credit cards is to remove the friction from the buying decision because it doesn't feel as bad to swipe the card, to tap the card, touch the phone, we don't feel the pain. But if I had you for a week, even to pay for everything in cash where you have to count out the dollar bills, I promise you you'll spend differently. So what we need to do is get out of high interest debt. Okay, first, avoid any more high interest debt. So if you have balances,
we got to get a plan in place. But first things first, let's avoid it. Let's not, let's not use it as the tool and the vehicle to finance a lifestyle that we clearly can't afford living beyond our means. Then we got to get out of that high interest credit card debt because it is going to continue to accrue for years and years. And now something that you thought you paid to, you are paying
$2,000 for. You find out that you're paying $7,000 for it in interest and the cost of it, it's just you can't get out from under it and you will not build wealth with it hanging over your head. Here's the deal. If you have debt, if you have high interest debt, I want you on a debt payment plan. The easiest way to get on a debt payment plan is to go to melabraham.com node. There's a free training there. There's a free tool there. Download it, get all
your debt in there. It'll spread the payments out. It'll give you exactly what to pay when, and you get yourself in the game to take control of that high interest debt. All right, that leads me to number two. And number two, this may be odd, but it's true. Extended warranties, y'all. And I see this on Amazon now, every time you buy any kind of technology, says, do you want the warranty? Think about this. I've got my setup. I've got a screen here. I've got two screens here,
and I have another small screen here and everything. So I've got all kinds of stuff. But one of these screens here I thought had a crack in it. And when I bought these two screens, I had the option to buy an extended warranty. And when I chose not to do it, but think about it, I bought another one because I thought one had a crack in it. It cost me dollar 99 because the prices came down and I got it on sale to
get a new screen, especially when it comes to technology. What we find is that the prices of technology and the rapid movement of technology doesn't warrant, necessarily the cost of an extended warranty, because the cost of replacement is far easier and outweighs the benefits of any kind of extended warranty. And so I think that in 99% of the cases, it's a waste of money to get extended warranties on things that probably aren't going to cost much to replace. Now, full transparency. I'm an apple
nut. Everything I have is Apple. I have applecare on everything. And primarily because my whole business, my whole existence is on it. And I need to make sure that I have no downtime. So if I need to get a replacement, I get a replacement really quickly, and I have the data, the data backups and redundancies and make that happen. So I want you to be really critical about whether you should have an extended warranty or something like that.
Okay. That leads me to. To the next. The next, uh, thing that I think is a complete waste of money, and I am guilty of this, uh, luxury goods that depreciate. Oh, my gosh. Okay, think about this. Here's. Here's the thing. I get it. I want to. I want to drive a nice car. I want to have. High end car. I want to have. I get the feeling of it. But you're buying a depreciating asset. Clothing depreciating asset. It's a use asset. It is
a consumable. Okay. And look, I'll be the first to tell you, we have nice stuff. I drive a nice car. Okay. I. We live in a nice home. We wear nice clothes. Although most of the time, if you saw me, I am in Adidas sweats and a t shirt. Okay? But when I go out on stage and all that stuff, I do that. But I think that we need to be really smart about assets or things that we buy that actually depreciate and have no lasting value, and especially if in order
to buy them, we have to go into debt to do it. So not only do you have the loss of value like you buy a car, most cars will lose 20% to 25% of their value in the first year, and then I finance it at a high interest rate. So to add insult to energy injury, it loses its value, and I'm paying interest on it at the same time. So we need to be aware of those things that are not. They're consumables. They're really nothing. Assets
that grow in value. They're not assets that create cash flow. There are things that decline in value that might have some momentary benefit for it, for you. But that's it. I'm doing. We're doing a really amazing vacation this year. It's not financed. It's paid for in cash. Even though I drive a nice car. Paid for in cash. I'm really careful about buying things that depreciate in a way that's going to erode my wealth or do it.
Do it with debt. All right, so that's number three. I would avoid luxury goods that depreciate, especially if I have to finance it. Okay, number four. Oh, my gosh. I have been victim to this, too. Impulse buys. Okay, impulse purchases. Listen, y'all, you just go on anything, Instagram, TikTok, and there's advertisements you can buy. There's a reason I got a $900 coffee maker in the kitchen down there, because I looked at it, and I go, that's cool. I can order my coffee
from an app. And I, like, literally, I can sit here now and make myself an Americano coffee. I can make myself an espresso. I can make myself a cappuccino, all from an app. But it was an impulse buy. Not really the smartest thing, although we use it a lot. All right, we use it a lot. But here's the thing. We need to be careful about impulse buys, especially when they're high ticket items, especially when they can sit back and put you into a financial strain
or something like that. Or that there's some buyer's remorse that might come into play. It is important for us to understand, and this is why I want. I tell people to delay an emotional purchase until the emotions wear off. And if they still want it, go back and get it. So delay it for 24, 48 hours. Don't make a decision. Put it aside. Because the tendency is when our emotions. If it's an impulse buy, it's an emotional buy. And when our emotions
go up, our financial intellect goes down. We make bad financial decisions when our emotions are involved, we need to avoid the emotions. And impulse purchases are typically emotional purchases. And marketers, they know it. And if they can stroke the strings of emotion, they can get at the threads of your money in your pocketbook. All right, that leads me to number five. Oh, God, this timeshares, yo. These seem like a
really good idea. When they give you the free stay and the full court press and the marketing speak and all that stuff. It seems like a really cost effective way to have vacations and the promises of, oh, you have this network of timeshares, and you can do this, but I can't tell you how many people that I have talked to that absolutely regret and detest the timeshare purchases that they've done because
it's inflexible. They have blackout dates. They can't get at the other, the other timeshares, it's a one time purchase with an ongoing financial commitment and the returns on it are diminishing that the returns on it are declining. Do you want to go to the same place every year for vacation? And if you can't get access to the other network timeshares, that's what you're stuck with. And so it's important to look at it. And I just, I think timeshares are, should be avoided at all
costs. Okay? That's just the way I look at it. I would avoid at all costs. That leads me to number six. My God, get rich quick schemes. And I've, look, I'm human. That's how I got in. The Ponzi scheme is, it looked really wonderful. But investments that promise quick, abnormally high returns and say that there's no risk, it should be your first red flag. It should be your first red flag. There is a reason in my book, building your money machine, I set a set
of rules in place, okay? If you don't have the book, get, you got to get the book. I have a specific criteria for investing. I have specific rules to follow. I have due diligence that I follow. If it doesn't satisfy those criteria, they don't get my money. They don't get my money because I lost one third of everything I owned. I made that mistake in a big way one time.
I won't do it again. And I don't want you to do it. If I spent over a million dollars learning my lesson, I don't want, I don't want you to do it. I want you to learn from my lessons. And so when you have these folks that, and there is a lot of scammers out there. There's a lot of stuff out there going on right now where they are not transparent. They are a lot of marketing speak. They don't give you the details. They promise you the world. There's inordinately high returns and they say there's
no risk. They don't have patience. They use urgency. They put the screws to you to get in because, hey, it's closing. It's closing and I don't let a lot of people in, but I'm going to let you in because your next, you came from this person. They play all the psychological trigger and emotional games to get you in. Run for the hills. Run for the hills. That old saying, if it seems like it's too good to be true, it probably is, is real. I lived it. I
don't want you to avoid get, get rich quick schemes. Be careful. Be discerning. If you have questions about something, like, I saw a question that just came in on my q and a hotline about an investment, and it's not a get rich quick scheme, but it is certainly not something that this person should be going into because they are not going to make, they're not going to make money on it. And so I will, I will be responding to that
shortly. All right. Now these are other smaller ones that I think, to think about, and this really depends on your, your current circumstances. Frequent dining out or doordash. Have you seen the fees on Doordash or postmates? Now I get it. We use Doordash. We use postmates. We use it maybe once or twice a week if we need to. But when you start to add it now, it depends
on your. Remember, you got to look at your plan. You got to look at what your plan is if it's in the plan and you have it built out. But if it is impairing your ability to build wealth, if it's impairing your ability to build wealth, that that is a problem and we need to avoid it. So I'm not saying not to eat out. I'm just saying I actually, for the most part, never tell people to not do something unless it's absolutely like get
rich quick schemes, absolutely horrible. I just want you to be fully aware of what you're doing, and if you do it intentionally and you're fully aware of the consequences, more power to you. You've made the decision. But too often, when it comes to finances, we make a decision without being fully aware of the consequences. And we don't realize that maybe we're spending $500 a month in eating
out or fees for eating out. And if I put that $500 away a month into an investment, or 400 of it away into an investment, I could find myself with 500,000 to a million dollars by the time I'm ready to retire. It's a big number. But remember, I'm saying, I'm not saying not to do it necessarily. I'm saying if you're going to do it, be aware of the consequences and what it is. All right. Leads me to number eight. Is unused
subscriptions or memberships. A lot of folks are now using subscription models membership models, monthly cost models, and I. I do not like them because I'd rather pay cash, know that I have it and not worry about it. The problem is, is that most of them are going to subscription models because they want the recurring revenue in there. And what ends up happening for most of us is we needed it at one point and then we allow the subscription to keep on going and we don't take
the time to cancel it. If you're not using it, cancel it. If you're not going to the gym, cancel it. Better yet, don't cancel it. Go to the gym. It's good for you. But the reality is that looking at your subscriptions, your memberships on a regular basis, maybe whether it's once a year or twice a year, and sitting back and saying, I'm going to cancel it and not putting it on auto renew, where things just get renewed in the background and it
comes on the credit card. And this is software, it's memberships, it's other food boxes and makeup boxes. I see them all over the place. So beware of unused memberships or subscriptions that you're just not getting the value out of. If you're not using it, why pay for it? Right. Next one. This one's a big one. And number nine is college or education with no RoI. Here's what I mean by this. I love education. I love learning. I love college in some cases. But here's what I think
is important. When you're going to take a class, a course, a degree, a certificate, why are you doing it? Is it going to further your profession? Is it going to increase your ability to earn? Is there a return on investment for it? Now let me be clear. The responsibility for getting an ROI, a return on investment for your education, is on you. I know that may be confronting, but imagine this. You go get this, you go get a doctor's education, you go to med school, you go through the
residency and you got $200,000 in debt. But you choose, instead of becoming a doctor to go be a high school science teacher, you don't have the compensation to pay off the debt. But not only that, the ROI you're getting is nowhere close. What you should for what the education is that you got. And in other words, your ability to get the ROI is by you using the education at the highest value possible. Now, I get it. Things happen.
But why I'm saying this is, it's really important to look at if it's going to cost me a certain amount of money to get degree, I'll give you a for instance, I have a family member who, we had a heated discussion. He did not like my perspective, but I'm okay with the fact that he, he didn't like my perspective. He got a PhD in heart history and he did it on student loan debt and he got a job as a curator working in a museum and he's only making like $30,000 a year. And he
said it's unfair. I got all this debt and all I'm making is $30,000 a year. Heres the thing. He should have never put that money into the education because the education would never have paid off if he did an RoI calculation. Its one of the reasons I dont like student loan debt at all. But if youre going to use student loan debt, we say that you dont take on more student loans than what your 1st 18 months salary would be. In other words, if hes going to get 30,000, the max student
loans hes going to get is 40 45,000. That's it. Anything beyond that, he better figure out another way to pay for it. He wouldn't have been buried. He would have been able to get out of the loan debt. But the more important thing is that he was paying over $100,000 for an education that was going to get him a 25,000 $30,000 job. There's no Roi in it. Okay. And so when we look at a college education, you don't look at it just for the degree
or you look at a certificate or a trade school. You don't look at it just for the training. You look at what it's going to give you on other side. And do I have the ability to recover that expense and get a return on investment from doing it? And if I do, great. The average cost of a public school living on campus these days is 26,000 a year. At four years, you are over $100,000 in costs. Does it make sense? Can you make that money back and return on investment in a decent amount of time? It
is an investment no different than any other investment. It should have an Roi in it. Okay. All right. Number ten, that's a soapbox for me. I apologize. But number ten, okay. Watch out for avoidable account fees. Okay. I'll talk about this in two different constructs. One is bank accounts. Now, most of my banking I do through credit card, credit unions because I don't like big banks. They charge fees. Their services are horrible. There's no personal service. There's
no personal connection. There's no relationships. And I can get what I need from a credit union. Support a community, support local businesses and do that better. And I get no fees. And I have personal relationships. The credit union that I work with, I've been with for decades, I can literally call them up. I have a relationship with them,
and I don't get hit with a whole bunch of fees. So if I'm going to put money in an account that they're going to use to make money on my money, they don't deserve to then make money on my money and charge me for giving them the money to make money on my money. It doesn't make sense. So I choose to avoid bank fees as much as possible. Okay, now let me look at something else. Investment
fees. So now we're talking about a brokerage account. We've got investments, we've got index funds, mutual funds, things like that. It is really important for me when I work with an investment advisor or when I talk to anyone that's going to help with investments, I say, give me. I want transparency on exactly how you're getting paid, where the fees are, where the expenses are.
Even if you don't work with an advisor, if you buy, say, some sort of actively managed mutual fund, their fees could be anywhere from 0.5% to 1.7%, even more. Well, think about this, and it doesn't sound like a lot, but on a $10,000 investment, that means that you're going to pay fifty dollars to one hundred and seventy dollars in fees, in expenses, okay? But that means that you lose the $170 at the top line, and you lose not only that, but you lose all the growth on it for years. And
it happens over and over again. And if you have more than 10,000, if you have 100,000, guess what? It's 1700. It's $500 to $1,700. It starts to add up. And when you have low cost alternatives, like index funds and ETF's, low cost funds that are diversified, that you can pay 0.015 to 0.04%. The difference is I'm either paying $50 to $170 per 10,000 or I'm paying a dollar, $50 to $44 per 10,000. Huge difference. So I avoid, I avoid expenses and fees, and I'm very upfront.
Even my, my wealth team, they know I'm fee conscious. They know I'm expense conscious. And I ask, and they, if they hesitate at all, they're done. They need to be fully transparent. Fully transparent. And if I can't get a clear, easy conversation around what I'm paying and where the fees are. Even if, you know, here's what some advisors will do. Mine don't do this, but they'll say, well, you're guaranteed. A rate of return is 7% net of fees. Net
of fees. That means that there's a fee. Now, the fee in there could be 2%. So it's a 9% return. They take 2% off the top, you get seven. So they say 7% net of fees. No, no, no. Tell me what the return is. Tell me what the fees are. I want to know, and because I want to make a decision, if I don't want to pay the 2%, the two and a half percent, the 1.7%, this isn't the investment for me. Be transparent and be able to avoid the fees as much as
possible. All right, so those are the ten. I got a couple of other things that I want you to think about. I'm just going to throw them out there real quick before we close this one out. Complete waste of money. Lottery tickets and gambling. That's just an opinion. I know some people love gambling. I don't. Fact is, I work way too hard for my money. Here's what I want to know. I want to sit back and go. If I'm going to spend dollar 200 or lose dollar 200 at a blackjack table,
I'd rather go spend dollar 200 on a show. Have a nice dinner. A show. I got something. I paid for it. I know it's gone, but I enjoyed it. Okay. Lottery tickets. The odds of winning. I get it. You got to play to win. But you know what? The odds of winning are so minuscule that I wouldn't waste the money. Okay. Beware of convenience store purchases. Granted. Emergencies. You got to run. But if you're shopping at the neighborhood convenience store, the 711 or the AM PM or the gas station
store, you're overpaying. It adds up. Okay. Be mindful of purchasing a home that doesn't fit your lifestyle. When I say fit your lifestyle, that means fit your lifestyle qualitatively, but also financially. In other words, over buying a home, overextending yourself to. To the point where your housing costs as well, over 30% of your income is too much. Beware of that. And then people will say, well, it's going to
go up and this that, but you still have to sustain it. And what happens if there's a job loss or there's an issue, but more importantly, doesn't fit your lifestyle. You might sit back and say, oh, I got to buy a home. In order to afford a home, I got to buy a home that's an hour away. And it sounds good at the beginning until you start driving in and back and forth to work, and then you sit back, I can't do this. So you got to ask yourself, what's my lifestyle like? What really matters to me?
What is it going to be like to like, I had a dear, dear friend that was think they were thinking of moving to a different state and city and selling their house. I said, before you do that, go. They were mobile, so they could do this. I said, go and rent an Airbnb for a month. Live there for a month. Be what it's like to go to the grocery
store, to. To walk the place, walk the. The parks, to drive there, to do all those things, see what it's like to live like a real person, not, not someone that's there for three days, five days, a long weekend, and it feels like Disneyland. Get real with it. And if it fits your lifestyle, then we can make a different decision. If it doesn't, you kind of go, oh, glad I know now. Spent 30. I spent money on a 30 day Airbnb, but I didn't buy a house that I can't get out of. So a couple of
things that I just wanted to throw in there as bonuses at the end. But the point is, is this. It isn't to tell you not to spend except for a couple things in here. It is to tell you to be aware and intentional with your spending. Because if you're not careful, you're wasting a lot of money. And if you have a leak in your financial bucket, you'll never be able to build
wealth at the pace you should. And so if we can plug these leaks, if we can avoid these costs and these things that are a waste of money, we can put that money towards a richer lifestyle. We can put that money to building your wealth. We can put that money to building your money machine so you'll have your money working harder for you than you did for it.
It is your path to living a life by choice, to eliminating the stress around money, to getting control and mastering your money and having an opportunity to live a get to life instead of a have to life. That's what I want for you. Listen, you know, I'm on a crusade to light the path to financial freedom for a million families. I want one of those to be you. All right. I hope that you found this valuable. I hope that you're going to do
the work that you're going to stay with me on the journey. If you haven't done so, subscribe to this channel. Stay with me on this journey. Let's make it happen. All right. I have nothing to sell you as far as investments, insurance. I just want to sell you on your dreams and the possibility of them. All right. All right. Until I see you on the road in another episode or out there while I'm speaking, always, always strive, live a life that I'll see.
Thank you for listening to the affluent entrepreneur show. With me, your host, Mel Abraham. If you want to achieve, achieve financial liberation to create an affluent lifestyle, join me in the affluent entrepreneur Facebook group now by going to melabraham.com group, and I'll see you there.