“enlightened financial planner”. That means he knows that his industry is against the interest of the investor, and they’re more concerned about corporate profits and maximizing shareholder value than they are about helping people become wealthy. He’s developed a bit of a jaded view of his industry – for good reason. Anyway, he does VERY well as a financial guy and has a lot of insight to share, especially about how amazing it is what some people do with their money. For example, he has clients for whom he manages millions of dollars, and they beg him every year to do their tax return so they can save $400 getting it done by a tax professional! He admits he can do it, but not particularly well and he even TELLS them this — but they still press him to do it to save the $400. What are the chances that a tax pro could find some extra ways to save them tax, and help them save THOUSANDS of dollars by spending a few hundred getting good advice? Probably very good. Unfortunately, some people are just too cheap for their own good. Another thing he says is common that he’s got a lot of clients in their 70’s who are worth millions of dollars, but have squirrelled their money away and never spent it on anything. They literally have millions sitting in the bank but refuse to spend it, and live like paupers. It actually bothers my friend a lot, because as he says, “these guys work their entire life, and they create all this wealth — and for what? For what? They never figure out that the money is to make their life better, and instead they die unhappy because they were too cheap to spend a dollar on themselves.” I’ve run into many older investors like this, guys in their 70’s who own a lot of real estate free and clear. But they refuse to sell, because they don’t want to pay taxes! That’s about the dumbest reason not to sell real estate there is. (hint: if you’re paying taxes, it usually means you’re making money!) Anyway, our conversation came around to Ferraris, because one drove past as we were having lunch. He said to me, “when are you buying a Ferrari?” And I said, “never.” He looked at me with some disgust on his face and said, “Greg, you can afford to buy one – why wouldn’t you? If I could, that’s what I would do. I would hate to die and know that I could have bought a Ferrari, and never did.“ And my response seemed to turn a lightbulb on over his head. I said, “the reason I can afford to buy a Ferrari is because I have NOT bought a Ferrari.” And he got it. The point was, and the point of this post is, so many people go out and buy crap with their money, because “they can afford it” and “they deserve it”. Part of the reason I CAN afford a Ferrari was that in the past, I chose NOT to spend my money on depreciating, ego-based ya-ya like expensive Italian cars, and instead put my money into high-growth, low-risk investment vehicles, which has growth the capital by 100 fold. Now, don’t think for a second I don’t live very well. However, I don’t get my fulfillment or satisfaction from what people think when they see me drive a Ferrari (which is, unfortunately, what causes most people to buy a Ferrari in the first place). I’ve figured out that instead of buying a ridiculous car that I can only drive for 3 months a year, if I invest that money intelligently and let it grow for me, it will be worth millions of dollars in a few short years. Having that patience and discipline for the first few years has made a massive difference for me and my family, and sometimes making these choices is difficult. I’m not knocking everyone who buys a Ferrari or another expensive vehicle, however I will say this — many of the people who do buy one often aren’t the ones who can afford it and probably never will! ]]>