Note to Self on Black Friday

Dear Jackass,

Do you think you’re going to hop online, or head down to the shop, and save yourself a fortune by spending this Black Friday? Well below is a little reminder of what will actually happen if you go down that path.

You will buy something you didn’t know existed before you started browsing. By the time you buy it, of course, you will have convinced yourself that you need it.

You will buy a model beyond what you may ‘need’ (if you truly happen to have a ‘need’ for anything at all).

Remember, you can convince yourself of anything. And if you’re not careful, you will.

What do I suggest?

Wait until a real need arises and buy the damn thing then. And if you’re not buying it with cash, don’t buy it. Don’t be fooled by ‘saving’ $100 or so every season on something you won’t use well until after the next sale because you’ll be too busy working even more to pay for your new toy and, since the purchase is probably going to your credit card, the interest will ultimately completely offset the savings.

Consider that if it takes you 3 months to pay off a $3000 purchase that would have retailed for $3250 on any other day, you will have paid about $290 in interest over those 3 months on any regular credit card of about 20% annual interest while paying $1000 per month against your original debt. That’s right, your $3000 debt will cost you $290 in just 3 months.

Remember, especially when it comes to personal finances, if everybody else is doing it, it’s probably a shitty idea.

So, instead, you can hold onto your scrilla and not be influenced by the hysteria. If you had put $1000 per month towards an Index Fund that provides a 7% return annually for three months instead of shopping and paying off the debt as I outlined above, you would have earned about $35 during those 3 months, and a lot more if you keep that money invested for the long haul..

So then, one day, you will take a leisurely bike ride to the shop when you have the money in your hand to buy the thing you desire and have truly established that it’s reasonable to purchase it (i.e. it will bring you joy and/or further income). The aisles will be empty because it is about 10 am on a weekday and most people are at work. You will have all the service you could ask for and you will maybe even enjoy the experience, something I can’t imagine many sane Black Friday shoppers do. You may make the purchase or you may still realize that you really aren’t going to make the best use of it right now and that it’s not necessary.

But whatever you do, much like your upcoming retirement, it will be on your terms, not the terms of the marketing you’re being fed telling you that you can save, by spending! Madness.

Oh, and if you want to retire as early as you can and to live life on your terms, stop being such a Jackass.

Kind regards,
Self

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