Monday, September 23, 2013

Making More Money is NOT the Answer

There’s 2 ways to have more money in your pockets. You can either make more money or cut down on expenses. The way we all prefer (that includes businesses) is making more money but it’s also the least profitable one. If you live in Canada, you pay taxes on every dollar you make and it’s easy to spend the extra income.

It’s okay to finance a necessity* but it’s not okay to finance a luxury**.

*A necessity can be something like a car. It is very important to take into account that somethings, like cars, depreciate in value and should therefor be bought used. A car, that’s 2-3 years old, lost around 40-60% of it’s original value due to depreciation.

**A luxury is something you don’t really need (Cable TV,entertainment etc.) Due to constant improvements of technology, depreciation can be found with things related to entertainment as well like video-games, TV etc.. and is therefor not recommended to buy new or at all.

If you have to finance activities, you shouldn't be doing them in the first place.

Originally posted - October 2010

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