RPF0383-Budget_for_the_Accessories
00:00:00.000 | Welcome to Radical Personal Finance, the show dedicated to providing you with the knowledge,
00:00:05.000 | skills, insight, and encouragement you need to live a rich and meaningful life now while
00:00:10.280 | building a plan for financial freedom in ten years or less.
00:00:13.020 | My name is Joshua Sheets and I'm your host.
00:00:14.800 | Today we have Radical Personal Finance short, a very simple personal finance concept that
00:00:19.820 | I want to share with you.
00:00:22.340 | The title of today's show is Budget for the Accessories.
00:00:27.920 | Now this is coming from both failure and success on my part.
00:00:34.320 | Failure in that many times I've not budgeted for the accessories and lived to regret it.
00:00:40.680 | And success, and sometimes I have and I have been very pleased with the results.
00:00:46.260 | The concept of budget for the accessories is extremely simple.
00:00:49.420 | If you're going to purchase something, whether that's an item, a service, whatever, make
00:00:54.700 | sure that you're not calculating your budget based simply upon the price of the object.
00:01:01.860 | Make sure that you're not setting a target figure such as I'm going to spend $500 and
00:01:06.140 | then purchasing on the single item or service the full $500 worth.
00:01:11.780 | Make sure that you're holding back enough room in your budget to cover the accessories
00:01:16.440 | for that item.
00:01:18.440 | Because if you think about it, for most items, at least the examples I can come up with,
00:01:24.560 | the accessories are just as important or very important at the least to the value that you
00:01:34.440 | get from that item.
00:01:37.040 | Now I'm going to give you a half a dozen examples here going from as simple as a cell
00:01:40.920 | phone and my last example will be talking about your house, about how to think through
00:01:45.140 | the budget that you make for your house.
00:01:47.740 | But the idea here is for you to think about something in terms of its utility.
00:01:53.820 | Let's talk about a cell phone because that's the most ubiquitous example I can come up
00:01:57.380 | with where every single one of you either has a phone or is probably listening to me
00:02:04.620 | on your phone right now.
00:02:06.800 | So Apple or Samsung or Blackberry or whomever you like comes out with their latest, greatest
00:02:13.060 | brand new phone and these things are expensive.
00:02:15.580 | I mean, $1,000 easily for one of these new top of the line phones.
00:02:21.420 | Let's say that you're looking through your budget and you decide, "Well, I actually have
00:02:24.940 | $1,000 that I could spend on a phone."
00:02:29.980 | Question is, should you go and spend $1,000 on the phone?
00:02:34.580 | I don't think you should because if you do, the only thing you'll have is the phone.
00:02:40.720 | A better plan is probably to budget something like $600 or $700 for the phone and $300 or
00:02:48.380 | $400 for the accessories.
00:02:51.980 | Let's talk about some simple ones.
00:02:53.980 | Probably the most useful, most valuable accessory that you can have for your phone is the case.
00:03:01.980 | Many of you purchase these mobile phone insurance programs, things like that.
00:03:06.380 | The cheapest form of insurance is to get a high quality, well-built phone case.
00:03:11.900 | If you've never looked around this market, here's a little bit of consumer information
00:03:15.840 | for you.
00:03:16.840 | You can find cases that are decorative and slightly protective or you can find cases
00:03:22.260 | that are extremely protective.
00:03:24.980 | There are different standards of protection.
00:03:28.700 | I recommend to you that if you're shopping for a phone case, you try to get one of the
00:03:32.180 | ones that usually goes under the idea of ballistic protection.
00:03:35.460 | It passes one of the drop tests that they do where it can survive a repeated two meter
00:03:41.380 | fall.
00:03:42.380 | The phone is six point ... It's two meters, I think about six and a half feet.
00:03:45.500 | Six and a half feet off the ground, you can drop the phone and the case has a sufficient
00:03:49.700 | suspension system built into it where it'll cushion the fall and keep your screen from
00:03:56.180 | breaking, keep the phone from breaking on a repeated basis.
00:03:59.740 | That's actually the type of case that I have.
00:04:01.560 | If you're interested in a specific model, when I was doing all the research for my phone,
00:04:07.060 | I discovered a case that I really like.
00:04:09.860 | It's called the Thule Atmos X3.
00:04:12.660 | Thule, the same company that makes those car top carriers, T-H-U-L-E, Atmos, A-T-M-O-S,
00:04:19.540 | and mine is the X3 brand version.
00:04:23.020 | I really like it.
00:04:24.020 | I'll link to it.
00:04:25.020 | I just made a note to link to it in the notes for today if you want to buy it on Amazon.
00:04:28.940 | They're super cheap now.
00:04:29.940 | When I bought it, it was 30, 40 bucks, something like that.
00:04:32.220 | The phone, it's been great.
00:04:34.100 | It covers the phone and gives it protection from a two meter drop.
00:04:39.020 | It does a tremendous job of protecting the phone, but it's still very thin.
00:04:42.180 | It still slides easily in and out of my pocket.
00:04:44.580 | It's very comfortable to hold.
00:04:45.820 | It makes the iPhone that I use extremely firm in your hand where the original model without
00:04:51.580 | a case is not that way.
00:04:53.180 | But it has that really high quality ballistic protection.
00:04:56.200 | Really love it.
00:04:57.200 | I bought my wife one as well when we got her a new phone.
00:04:59.100 | It does a great job.
00:05:00.620 | There are many others as well.
00:05:01.740 | If you are in a very dangerous environment, you're a construction worker, you work on
00:05:06.700 | a boat, et cetera, then you'll want to go for one of the waterproof versions of the
00:05:10.100 | phone cases unless you're getting one of these newer phones that are very well waterproofed.
00:05:13.900 | I don't like the waterproof because I don't like having something on the screen and I
00:05:17.100 | don't really spend that much time where I need the screen protection.
00:05:20.960 | But that case will give you a tremendous usefulness of the phone and it's worth budgeting for
00:05:27.660 | that.
00:05:28.660 | So let's say that your budget for the phone were realistically $1,000.
00:05:32.500 | If you've got to spend 10 to 20 to $50 on a case, you've got to pull that off of that.
00:05:37.620 | Well, what else?
00:05:39.100 | I've learned over time that the first thing I should do when I get a new device is make
00:05:43.100 | sure that I have proper accessories for it.
00:05:46.140 | So the most useful accessory after the case is chargers.
00:05:50.780 | So when I upgraded from phones that were requiring USB connection to lightning connection, I
00:05:56.940 | didn't just simply stick with the one lightning cable that came with the phone.
00:06:00.900 | I went ahead and purchased a half a dozen new USB lightning cables.
00:06:05.620 | And I really have gained tremendous benefit from doing this.
00:06:10.300 | Now this is going to be...this is a perfect fit for a #firstworldproblems.
00:06:16.180 | But here's what I do.
00:06:18.180 | I have a high quality cigarette lighter adapter in all three of my vehicles.
00:06:27.500 | And by high quality, I mean not the cheapy dollar store one that you can get that doesn't
00:06:31.620 | put out enough amperage to charge the phone, but one that does put out a high current,
00:06:37.220 | high voltage, high amperage or voltage, I'm blanking on my electrical theory at the moment,
00:06:41.980 | puts out a lot of current to charge the phone quickly.
00:06:44.660 | If you try to run a big phone and you're trying to do something like I do, I often will use
00:06:50.180 | a GPS app on the phone.
00:06:52.140 | My favorite is an app called Waze, W-A-Z-E.
00:06:55.100 | If you're not familiar with Waze, it's a free app that is completely big brother snooping
00:07:00.060 | in your life and it is really hard to say no.
00:07:03.540 | Because what the Waze app does, again, W-A-Z-E, is it uses all of the user data on your phone
00:07:09.740 | and it uses all of the other people who are using the app to give real-time GPS information
00:07:14.460 | to help you get real-time traffic information about if you're sitting in a traffic jam,
00:07:19.580 | how long the traffic jam is going to be, or even better, it'll reroute you around the
00:07:23.380 | traffic jam based upon how big the traffic jam is.
00:07:26.720 | It's really great because it's pulling that real-time data from all of the user's phones.
00:07:31.540 | It's a really good app.
00:07:32.780 | I usually drive with that on because it helps me to avoid traffic problems when I'm going
00:07:40.020 | somewhere.
00:07:41.180 | I find that to be a really useful feature.
00:07:43.480 | The other thing I like about it is you can turn on a little alert, which sounds a tone
00:07:48.280 | if you exceed the posted speed limit in a zone.
00:07:52.300 | I like to do that because if I ever exceed this posted speed limit, I want the alert
00:07:55.660 | so I can drop my speed back down.
00:07:57.340 | I don't like to pay speeding tickets, a little personal finance thing, and I generally have
00:08:02.500 | no reason to ever be in a hurry.
00:08:04.620 | I use the Waze app.
00:08:05.620 | Well, if you have one of those cheap drugstore, dollar store things, chargers, if you have
00:08:10.780 | your screen on with a big phone, a cheap dollar store cable and a cheap dollar store cigarette
00:08:16.420 | lighter doesn't deliver enough current to the phone to even maintain the battery, let
00:08:19.580 | alone charge it.
00:08:21.060 | If you get a high-quality cable and a high-quality cigarette lighter adapter, you can get in
00:08:25.620 | and you get in the car and your phone's at 50% and you plug that thing in and you're
00:08:30.860 | using the screen, talking on it all the while, and when you get out of the car sometime later,
00:08:34.820 | it'll be 75%, 80%, perhaps 90% or 100%.
00:08:38.180 | I have a habit that anytime I'm in a vehicle, I'm charging my phone.
00:08:42.060 | Your phone is usually one of your most important, most valuable accessories in your life.
00:08:47.460 | Want me?
00:08:50.180 | If you left your phone behind when you leave your house, how many of you would go back
00:08:56.980 | and get it or have gone back and gotten it?
00:09:01.660 | Most of us, we've gone back and gotten it.
00:09:05.180 | Most of us, if we leave it behind, we would at least seriously consider it.
00:09:07.980 | Now, I can't think of anything else that if you left behind, you'd be that tempted to
00:09:13.900 | go back and get.
00:09:14.900 | You leave your wallet behind, "Well, I probably need, but I can get by."
00:09:18.340 | You leave your socks behind, "Well, I'll just be sockless today."
00:09:20.740 | Easier for some of us in Florida than some of you guys up in the north.
00:09:25.500 | The phone is a valuable accessory.
00:09:27.620 | All of these lighter adapters and the high-quality cable in each of the cars makes it so that
00:09:32.820 | my phone is always very well charged, so I don't have to worry about it running out of
00:09:36.300 | juice.
00:09:37.300 | I don't want to worry about it being down at 10% or 15% or running out when I need it.
00:09:40.860 | That dramatically improves the usefulness of the phone by having all those electrical
00:09:45.560 | cables in all the cars.
00:09:46.560 | That dramatically just makes me actually have it.
00:09:50.500 | Back to the point where I said you're better to buy a cheaper phone, it's better to have
00:09:53.620 | a cheaper phone, maybe a little less memory or a camera that's not quite as high quality
00:09:58.600 | that's actually charged and working when you need it than to have an expensive phone, but
00:10:02.620 | you blew all your money on the phone and you didn't have the money to keep it charged all
00:10:06.180 | the time.
00:10:09.260 | I know I'm laboring on the cell phone, but I'm trying to give you some practical tips
00:10:12.340 | because I know all of you have phones, but also to use this as a broader metaphor for
00:10:17.540 | other things in your life.
00:10:19.820 | So I invest, it's a little bit weird to use that word, but I think it's accurate.
00:10:26.980 | I invest in high-quality cigarette lighter plugs and cables for each of the cars.
00:10:34.220 | And if you're married or you have other people, you might want to go ahead and have two.
00:10:37.780 | I like to carry an extra cable in the car for other devices.
00:10:41.340 | So friends have a USB phone, things like one that charges, an Android that charges with
00:10:46.620 | a USB cable.
00:10:47.620 | It's nice to have a USB cable or a simple adapter.
00:10:50.140 | There are a couple of simple ways to do that.
00:10:51.540 | I'll skip past it for now.
00:10:53.500 | But I also like to have cables that stay in other places in my house.
00:10:57.680 | So I like to have a cable that's on my desk so my phone can be charged when I'm at my
00:11:01.740 | desk.
00:11:02.740 | I like to have a cable that's charged by my bed if I put my phone by my bed.
00:11:07.260 | Sometimes I do that, sometimes I leave it in the office overnight, you get better sleep
00:11:09.700 | that way.
00:11:10.980 | I like to have also a separate cable and adapter that's set up in my travel kit.
00:11:15.820 | And that way when I'm traveling and I'm packing, I can pack in about 15 minutes because I just
00:11:20.780 | have a separate dop kit that has all of my toiletries in it and it has a standalone charger
00:11:25.820 | and adapter and cables and all of that for electronic devices.
00:11:29.980 | It costs a little bit of money, but it's a one-time purchase that you can use for a very
00:11:35.100 | long time until they change the adapter, which is going to be a number of years at least.
00:11:40.320 | And it gains so much value for me of having the benefit of always having the phone charged,
00:11:47.140 | always having the phone and not having to unplug a cable from here and take it from
00:11:51.420 | there.
00:11:52.420 | It's just very, very simple.
00:11:53.420 | It costs a little bit of money.
00:11:54.500 | I have found that it's one of those things that's been very helpful for me.
00:11:58.140 | Well, what else?
00:11:59.140 | What other accessories are useful with a phone?
00:12:02.020 | What about car mounts, having a nice mount in your car?
00:12:06.000 | Makes a big difference.
00:12:07.000 | If you don't have a high quality mount that sticks to your dash or that's just screwed
00:12:10.700 | into your dash or that hangs from your mirror or something like that, you're not getting
00:12:15.900 | the full benefit of the phone.
00:12:17.620 | If you just have to look down in the cup holder that's dangerous, you can't use some of the
00:12:21.380 | GPS functions, et cetera, as well as you can otherwise.
00:12:24.900 | And so go ahead and spend and get a high quality, it doesn't have to be expensive, but you're
00:12:30.180 | going to spend $10 to $30 for a high quality mounting system.
00:12:33.900 | And you can get a mounting system that's very convenient, one of these nice magnet ones
00:12:37.280 | or something similar.
00:12:39.420 | Adds a lot of value to the phone.
00:12:41.300 | I'd rather have a slightly cheaper phone and a mount in my car where I can use that phone
00:12:47.620 | for its functions such as GPS, such as safely managing audio files while I'm driving down
00:12:52.980 | the road than a more expensive phone that I have to stick down in the glove box or stick
00:12:57.300 | down in the cup holder.
00:13:00.160 | Other batteries, I've mentioned on the recent hurricane show how important cell phone batteries
00:13:04.860 | are.
00:13:05.860 | I think that all of you should have at least two high quality lithium ion batteries as
00:13:10.780 | far as battery backups.
00:13:12.520 | Very simple, we should have one that goes into your pocket or your purse, a small type
00:13:16.900 | of lipstick case or one of the small flat ones if you're a guy.
00:13:19.940 | Me as a guy, I like to have one of the small thinner battery cases.
00:13:23.500 | If you're a girl, for my wife, kind of the lipstick, more tubular design works better
00:13:29.380 | for her purse.
00:13:30.780 | That way if you're out and you're not near a car, you're not near your house and you
00:13:35.700 | do like me where you actually use your phone a lot, the batteries don't last a full day.
00:13:41.380 | So it's nice to have that charger and a little cable there to be able to plug it in and charge
00:13:45.040 | it up.
00:13:46.040 | I also think it's really valuable when traveling or when out and doing a lot of work or when
00:13:53.980 | you're doing emergency preparations to have a nice high capacity 15,000 milliamp hour,
00:13:58.980 | 18,000 milliamp hour, 20,000 milliamp hour battery that you use that can go in your pocket
00:14:04.100 | and recharge your phone a half a dozen to a dozen times.
00:14:07.420 | These batteries are really valuable to have.
00:14:11.380 | And so I'd rather have that phone and those accessories to keep it using, to keep it going
00:14:18.100 | than the more expensive phone.
00:14:20.460 | Cheaper phone, more accessories, better in my opinion.
00:14:23.860 | Now that's really phone centric.
00:14:26.460 | I'm using that example because I think it's something that you can probably relate to.
00:14:31.460 | Most of us who use smartphones use them a lot.
00:14:35.580 | And I always scratch my head when I see somebody with a thousand dollar phone that ran out
00:14:39.780 | of juice because they didn't plan ahead to have juice.
00:14:45.060 | Now we can go one step further.
00:14:46.460 | Those were all just ideas to have the basic functionality of the device.
00:14:52.260 | What about ideas to enhance the functionality?
00:14:54.700 | Something like a monopod and a little clip to be able to use the phone for taking high
00:14:59.220 | quality stable video or a simple mobile tripod, something like a GorillaPod.
00:15:04.060 | I have a mobile video kit that I use.
00:15:06.260 | How about something like an external microphone to capture higher quality audio for your videos?
00:15:12.100 | Audio makes a big difference.
00:15:13.100 | Actually more important when you're studying video, content is number one, audio is number
00:15:17.540 | two and video quality is number three.
00:15:20.580 | So you can have the greatest fancy new camera on the iPhone 7, but if you still have the
00:15:24.620 | junky microphone and you got a bunch of wind noise, eh, not going to work so well.
00:15:29.040 | So all of those accessories and the sky's the limit.
00:15:32.020 | So I won't go into all those different things that you can do, but I'd rather have a $300
00:15:36.900 | iPhone 5 if they still sell those, whatever the cheap SE, they're on the SE now, the iPhone
00:15:41.500 | SE and all of the accessories than a 7 with no accessories.
00:15:47.020 | I really think that's a better move.
00:15:50.060 | Now you choose the budget, you pick the accessories, but think about that.
00:15:56.900 | Think about the benefit.
00:15:57.900 | Now let's talk about something where as an example of hurricane preparedness that I just
00:16:04.220 | mentioned and I want to mention this again in case you didn't listen to that hurricane
00:16:07.020 | show and we'll go on to something like your car next, but a generator.
00:16:11.060 | I see this and right now there's loads of people, loads of you who are digging out from
00:16:14.580 | after Hurricane Matthew.
00:16:15.840 | Some of you, many of you perhaps still without power and you always see this when people
00:16:22.180 | are trying to prepare for a hurricane or other type of power outage where they go out and
00:16:27.340 | buy this expensive generator and maybe one five gallon can of gas.
00:16:35.480 | Think about what is the functionality that you want when you're buying a generator for
00:16:38.860 | power, you need power while the power's out.
00:16:42.220 | Well five gallons of gas will run a generator anywhere from say five to 10 hours perhaps
00:16:48.260 | depending on the generator, depending on the load, all that stuff, but it's not a ton of
00:16:52.580 | time of power.
00:16:54.900 | If I'm choosing and I've got a $500 budget, instead of buying a $450 generator and a single
00:17:02.420 | can of gas, I'd rather buy a $150 or $200 Harbor Freight generator and have $300 worth
00:17:08.580 | of gas and gas cans or other storage mechanisms set by so that the generator can provide several
00:17:14.700 | days of power.
00:17:18.980 | And also importantly, I'd rather lay in the accessories to be able to fix the generator,
00:17:23.020 | simple tool set, change of oil, better to have a $150 generator and an extra oil filter
00:17:30.140 | and an extra quart of oil set by so that after you've run it the appropriate lifespan, you
00:17:34.380 | can go ahead and change the oil than the big expensive generator that you run out of gas
00:17:38.540 | because you only had one can and you fry if you do get more gas, you fry because you can't
00:17:44.820 | change the oil.
00:17:46.280 | So think about the accessories.
00:17:50.300 | Talk about vehicles and cars.
00:17:51.780 | If you buy another car, if you buy a new car, whether it's a new model year car or whether
00:17:56.940 | it's a car that's simply new to you but it's an older model year, think about the car that
00:18:01.100 | you're buying and what you're trying to get from the car, how you anticipate using it
00:18:05.380 | and make sure that you don't spend all of your money on the purchase price of the car.
00:18:10.420 | If you're going to want accessories for your vehicle, purchase those accessories early
00:18:14.940 | so you get the maximum lifespan from them.
00:18:18.180 | Remember, the shorter amount of time that you spend...
00:18:26.180 | When you're calculating the cost of something, the way it works is you calculate the price
00:18:30.500 | that you pay for it, then you're going to sell it at the end of your ownership.
00:18:37.700 | You calculate what's that sales price that you're going to get for it, how much money
00:18:41.340 | you're going to get for it.
00:18:42.340 | It might be zero if the item completely depreciates or it might be if you buy a car and you buy
00:18:46.300 | it for $15,000 and you sell it when it's worth five and you take the difference between those
00:18:51.020 | things.
00:18:52.020 | That's your cost of depreciation.
00:18:53.020 | If you bought a $15,000 car, you owned it for five years and then you sold it for $5,000,
00:18:58.900 | that means that that car has cost you $10,000 as measured over that five years or in simple
00:19:06.660 | depreciation terms, $2,000 per year.
00:19:11.460 | That's how you always calculate the price of something.
00:19:13.260 | If you're buying a phone, what price you pay for it, what price you sell for it, and how
00:19:17.460 | long you own it.
00:19:18.740 | If you're trying to be frugal with your money and trying to make wise decisions, best thing
00:19:22.380 | you can always do is stretch out your length of ownership period.
00:19:24.820 | If you want to make good decisions with a car, you can drive a fancy car.
00:19:28.780 | If that's important to you, buy a fancy car, maybe even buy a new car, but own it for a
00:19:32.420 | really long time.
00:19:34.300 | Now when you're calculating the value of accessories, and this is why when I got a new phone recently
00:19:39.100 | and why I've had this philosophy for years, I want to own those accessories for the maximum
00:19:43.140 | amount of time possible because that way my per month ownership cost will be the lowest.
00:19:50.180 | It's silly to say I buy a new pickup truck and for three years I really would like to
00:19:55.140 | have a topper on this truck.
00:19:56.340 | Man, it would be nice to have a topper on the back, but man, that's another $1,500 to
00:20:00.220 | get the one that I want.
00:20:01.780 | Well, maybe someday, maybe someday.
00:20:03.740 | Then finally after three years I go ahead and get it.
00:20:06.500 | I get that topper.
00:20:08.940 | Then two years later I sell the vehicle.
00:20:11.940 | I'm never going to get the, especially with accessories, you never get the money back
00:20:14.820 | for accessories.
00:20:16.540 | I'm never going to get the money back or at least that much money back for accessories.
00:20:21.380 | Now my cost per month, my usage cost is tremendously high.
00:20:27.700 | When you're buying a vehicle, if you're going to want to change that vehicle, accessorize
00:20:31.860 | that vehicle, have the things that make that vehicle really valuable, plan for that.
00:20:36.660 | I always chuckle.
00:20:38.700 | You see these guys that have big mud trucks.
00:20:41.060 | When I was a kid I was obsessed with big four-wheel drive mud trucks, so I always noticed them.
00:20:46.540 | Around here in South Florida we have mud, but I don't live in a farming community where
00:20:50.080 | these things are actually used.
00:20:51.220 | They're all show trucks.
00:20:52.580 | I see these guys have big jacked up pickup trucks with big old mud tires on them, but
00:20:56.660 | the tires are completely bald.
00:20:59.180 | Now those mud tires are expensive and I just think, "Why did you go through all this hassle
00:21:04.460 | of buying this big fancy mud truck and jacking the thing up, but you don't have enough money
00:21:08.700 | to replace your tires?"
00:21:10.920 | This was dumb.
00:21:11.920 | Not only is it dumb, but it's dangerous because bald tires are extremely dangerous.
00:21:17.900 | First thing you can do with a vehicle is buy a cheap vehicle and put great tires on it.
00:21:22.500 | If you have an expensive vehicle and bad tires, you don't get the performance.
00:21:26.500 | If you have a high performance vehicle out of it, you're going to get the performance
00:21:29.560 | out of it because of the tire, all the horsepower that you have has to go through that tiny
00:21:34.000 | little patch of rubber on each tire, a few square inches of contact.
00:21:37.300 | You can have the most powerful engine in the world and if you can't transfer that power
00:21:40.560 | to the ground, it does you no good.
00:21:43.300 | It's not only if you have a performance vehicle, but if you're worried about safety, which
00:21:45.960 | you should be.
00:21:48.000 | One really bad financial move is die in some stupid way.
00:21:53.500 | Tires are important and good tires make a huge difference.
00:21:58.340 | You should plan for that.
00:22:00.980 | Where I live, we get lots of rain.
00:22:02.760 | Some of you in the upper northeast, you get lots of rain.
00:22:05.000 | It really matters.
00:22:06.000 | Some of you face snow.
00:22:07.000 | I've never lived in snow country, but from my research, it seems to me that all the data
00:22:11.460 | and the experts seem to indicate that if you live in snow country, your tire quality makes
00:22:18.820 | a bigger difference to your vehicle performance than does something like having four-wheel
00:22:24.260 | drive.
00:22:26.080 | Let's say you go and buy a really nice four-wheel drive Subaru because you're concerned about
00:22:30.060 | safety, but if by having to spend more money on the Subaru, you don't have enough money
00:22:33.820 | to get proper snow tires to keep your tires in good condition, you didn't have a good
00:22:40.780 | plan.
00:22:41.780 | If I lived up north, if I had to choose, I'd rather have a cheaper two-wheel drive car
00:22:47.540 | and have a complete set of extra snow tires on extra rims so it's really simple to go
00:22:52.220 | out on a Saturday morning when it starts to get snowy and just change all four tires real
00:22:56.580 | quick without it being a big hassle.
00:22:58.940 | I'd rather have that than a fancy new four-wheel drive Subaru with bald tires or without the
00:23:04.280 | proper snow tires.
00:23:07.820 | Even for the cost, whatever the modifications are that you want to make, if you want to
00:23:11.380 | swap out the tires, if you want to paint the thing something cooler, if you want to add
00:23:14.820 | a topper, add a tonneau cover or change out the seats for racing seats or add a stereo
00:23:20.100 | system, plan to do that stuff as quickly as possible once you acquire the vehicle.
00:23:25.340 | Get it installed so you can get the usage of the vehicle over your time of ownership.
00:23:30.700 | If you've got to reduce your purchase price in order to get that, I think you'll be happier
00:23:35.060 | with that.
00:23:36.380 | Many other consumer items in life are similar.
00:23:38.260 | If you get a computer, get a proper bag for it.
00:23:40.620 | If you get a nice new laptop, get a bag that fits it, get the chargers that work.
00:23:44.900 | Simple thing I've always done that makes a huge difference, have two chargers.
00:23:47.620 | Again, one charger that stays on my desk at home, one charger that goes with me.
00:23:51.620 | Those of you who spend all your time and you only have one charger and every single time
00:23:54.380 | you wrap up the cord, just buy another charger and that way you don't have to wrap up the
00:23:58.260 | cord every time.
00:23:59.260 | It's really worth it.
00:24:00.560 | Buy an extra mouse, a mouse that stays on your desk and a mouse that goes with you.
00:24:04.220 | Those things add, they take away the friction of life and they allow you to have more benefit.
00:24:10.280 | Camera gear is one.
00:24:11.580 | Photographers know this.
00:24:12.720 | In photography or videography, the lens that you have and the quality of the lens is at
00:24:17.900 | least as important if not more important than the camera body.
00:24:21.980 | The accessories contribute hugely to the quality of the end product.
00:24:27.660 | If you're buying a camera and you're a new camera person, buy a cheaper camera body and
00:24:32.740 | better lenses.
00:24:34.120 | You can always upgrade the camera body later on, but the lenses, if you buy quality, you
00:24:38.100 | only buy them one time and you get maximum use out of them.
00:24:42.700 | What about toys like jet skis or ATVs or boats?
00:24:47.520 | With boats, save the money and lower the purchase price of the boat so you can buy the proper
00:24:52.940 | accessories.
00:24:53.940 | Buy the safety gear first.
00:24:55.780 | When you're boating, make sure that you budget for the proper life jackets.
00:24:59.700 | The best thing you can do on a boat is make sure that you buy those nice inflatable life
00:25:04.100 | jackets for you and for all the members of your family or anybody who's boating so that
00:25:08.060 | when you're out boating, you can wear those things.
00:25:09.980 | The things that the Coast Guard wears, the little suspender looking ones or the fishermen,
00:25:13.180 | the little suspender looking ones that have an automatic inflator.
00:25:15.540 | If you hit the water, they air up.
00:25:19.220 | They're not cheap.
00:25:20.220 | They're 75 to 150 bucks a piece, but I'd rather have a little bit cheaper boat and go ahead
00:25:26.500 | and have four or five of those so that when I'm out on the boat, everyone on the boat
00:25:29.940 | is well cared for and has proper, comfortable life jackets.
00:25:34.260 | Other safety equipment, make sure that you buy something as simple as an E-Purb, an emergency
00:25:39.300 | locating beacon.
00:25:40.780 | Yeah, it's going to cost you a few hundred bucks, but you never know when things can
00:25:44.540 | happen and you'll feel a lot more confident when you're heading out the inlet on your
00:25:47.740 | single engine outboard boat if you've got an E-Purb there.
00:25:52.820 | Big boats, big fancy new boats break down too, and having the ability to have a high
00:25:57.260 | quality backup radio so you can call the towboat or having that E-Purb there in the worst case
00:26:02.140 | scenario, or having a proper lifeboat on the boat.
00:26:06.700 | If your boat is of a certain size, make sure you get one of those nice inflatable compact
00:26:11.420 | lifeboat systems.
00:26:12.900 | That safety gear is worth it.
00:26:14.580 | Now, buy the water toys too.
00:26:16.340 | Buy the nice cover that covers the whole boat.
00:26:19.060 | Get yourself the trailer.
00:26:20.700 | Buy the toys that you need and get them right away so that you can get full use out of them.
00:26:24.580 | Don't wait and wait and wait and spend all your money on the boat and not have the accessories
00:26:28.180 | for it.
00:26:29.520 | If you don't know what the accessories are, you should probably rent the thing until you
00:26:32.500 | figure out what the accessories are and have your shopping list so that when you go to
00:26:35.140 | buy, you just buy it all at once.
00:26:38.100 | Another simple example, if you're going to buy a boat or another toy like that, make
00:26:42.300 | sure that you have, that you budget for the place to put it away, away from damage.
00:26:47.460 | I can't stand to see people who keep their boat out and sitting in the driveway when
00:26:53.340 | for a little bit of money, they could put aside a structure in the side yard or backyard
00:26:57.580 | and cover the thing.
00:26:58.580 | At least install a purchase, a quality custom made cover so you can protect it from the
00:27:04.020 | damage of the sun, but better put it, build a little structure because what'll happen
00:27:09.300 | is if you build the structure for the boat, here's what you can get.
00:27:13.020 | You can buy a slightly cheaper boat, but the cheaper boat, because it's well cared for
00:27:17.100 | and it's not beaten up by the sun and completely destroyed, it'll have a higher resale value.
00:27:23.340 | Build the structure, buy the cheaper boat, keep that boat for a few years.
00:27:26.740 | You can turn around and sell it for more, put a little bit of money, then you can go
00:27:29.620 | buy the fancy boat.
00:27:31.740 | But protect the things that you own, protect the things that you want to have.
00:27:36.340 | Think about the use and do those.
00:27:38.260 | A couple more examples, guns.
00:27:42.020 | People buy guns and they're different.
00:27:47.180 | Talking about the use, depending on the use, depending on the gun that we're talking about,
00:27:50.860 | you should probably not buy as expensive of a gun as you can afford.
00:27:55.020 | Number one, let's just say your budget is $2,000.
00:27:58.020 | Pretend that you don't own a gun, you've never owned a gun and you have a $2,000 budget.
00:28:04.020 | You're better off buying, or a $1,000 budget, let's make it more realistic.
00:28:07.180 | If I had a $1,000 budget for a gun, I would buy a $200 or $300 gun, I'd buy $300 or $400
00:28:15.780 | worth of ammo, and I'd buy $300 or $400 worth of training.
00:28:21.820 | Because when you buy a gun, you don't just need the appliance, you don't just need the
00:28:24.900 | tool, you need the ammo that makes the thing work and you need enough ammo that you can
00:28:29.300 | actually shoot it so that when you need it, you know how to shoot it, and you need the
00:28:33.620 | training that makes that tool more effective, more useful for you.
00:28:38.780 | Some guns are toys, some guns are tools.
00:28:42.260 | I think there's a good place for both.
00:28:45.820 | If you're going to buy a gun, buy a gun where the cost of the ammo doesn't intimidate you.
00:28:49.820 | A simple thing like saying, "Oh, I want to buy a semi-automatic pistol that shoots .45
00:28:56.820 | ACP."
00:28:57.820 | That stuff is expensive when you're buying 1,000 round cases of it.
00:29:02.540 | Compare the price of .45 ACP to 9mm.
00:29:05.540 | I'd rather have a 9mm that I've shot a few thousand rounds through so I actually know
00:29:09.300 | how to use than the .45 ACP because that seems impressive to the big macho guy at the gun
00:29:15.180 | store.
00:29:17.220 | Now depending on the application, you need the accessories for it.
00:29:20.140 | If you're talking about something like a concealed carry gun, you need or probably going to want
00:29:24.900 | to buy multiple holsters.
00:29:27.140 | People forget this and they spend all the money on the gun.
00:29:29.740 | They don't buy the ammunition, they don't buy the training, and they don't buy the holster
00:29:33.340 | so therefore they can't use it.
00:29:35.460 | But you're going to want to have a variety of different holsters, a shoulder holster
00:29:39.420 | for the times when that fits your wardrobe and inside the waistband and outside the waistband,
00:29:44.540 | maybe an ankle holster, a deep concealment holster, depending on what your clothing choice
00:29:50.100 | is, what the event is, how you need to do that.
00:29:52.500 | Remember, the point is to have the gun and to know how to use it, but if you spend all
00:29:57.180 | the money on the gun because you bought the fancy one and you didn't buy the holsters
00:30:02.780 | that would work with your various clothing choices in different situations, then you
00:30:07.420 | don't have it when you need it.
00:30:10.740 | Things like magazines, having extra magazines.
00:30:13.180 | Again, depending on the context, there's a difference between buying a hunting rifle
00:30:17.980 | where you're going to buy a bolt action scoped hunting rifle versus an AR-15 sporting rifle.
00:30:23.280 | If you're buying an AR-15, little tip, buying an AR-15, why are you buying the AR-15?
00:30:28.600 | Think about that.
00:30:30.600 | If you are just buying it to have around the house, you need to have training and that's
00:30:35.120 | where you should focus.
00:30:36.520 | As far as I'm worried about some intruder and I've chosen an AR-15 as my home defense
00:30:39.680 | weapon of choice, fine.
00:30:41.160 | But buy training so that you're confident with it.
00:30:45.000 | If you're buying an AR-15 for the end of the world as we know it, the zombie apocalypse,
00:30:48.880 | don't buy a $2,000 AR-15, buy a $500 AR-15 and $1,500 worth of magazines and bullets.
00:30:59.440 | Somebody who knows how to have ... I'd rather have a cheap gun, I mean the AR-15 world,
00:31:05.640 | I'd rather have a cheap gun and 30 magazines and 3,000 rounds than an expensive gun, three
00:31:11.480 | magazines and 300 rounds in that context.
00:31:16.680 | Think about why you're buying something, what's the use that you have for it and plan accordingly
00:31:23.720 | and don't throw all your money into the initial purchase.
00:31:30.400 | Another toy, RVs and then we'll get to houses and we're done for today.
00:31:32.800 | This was supposed to be a short and here we are at 32 minutes.
00:31:35.720 | RV, if you're going to buy an RV, buy an RV and then accessorize it how you want it.
00:31:40.840 | Store it properly.
00:31:41.940 | Make sure that you have the cover for it if you need that, if you're buying a newer one
00:31:44.920 | so you get more resale value.
00:31:46.620 | But the big thing about an RV as an example, save enough money to put gas through it.
00:31:50.680 | If you have a $30,000 budget for camping and RVing, spend $10,000 on the RV and $20,000
00:31:57.520 | traveling.
00:31:58.960 | It's a shame to spend all your money on the vehicle and not have any money to put gas
00:32:03.600 | through it and be sitting at home fretting because gas is $3.40 a gallon.
00:32:09.880 | So plan your budget based upon the use.
00:32:12.000 | Remember, the point of the RV is to get you out on the road, not to sit in your driveway
00:32:17.020 | and impress your neighbors.
00:32:19.020 | Talk about a house.
00:32:23.580 | Many people make the mistake of buying flashy, gaudy houses to impress people they don't
00:32:29.700 | particularly like because they think that's somehow how they can show their self-worth.
00:32:35.140 | Consider what the basic functions are that you want from your house and make sure that
00:32:39.180 | you're either setting aside the money for the accessories and amenities in advance or
00:32:46.020 | that you're seriously considering the house based upon those accessories and amenities.
00:32:53.140 | The amenities are more important than the size or flashiness of your house.
00:32:59.860 | Where in your house do you spend the most time?
00:33:02.540 | Think about that right now.
00:33:03.540 | Where?
00:33:04.540 | In this particular spot in your house, do you spend the most time?
00:33:13.020 | If you think about it, you should come up with the answer, my bed.
00:33:19.020 | For some of us, it might be my office.
00:33:20.820 | I might spend more time in my office since I work in my house than my bed, but most of
00:33:24.300 | us, it's our bed.
00:33:25.980 | You spend seven, six, hopefully at least seven, six, seven, eight, nine hours a day, seven
00:33:31.740 | days a week, 365 days a year in your bed.
00:33:38.420 | How much money have you spent on your sleeping experience?
00:33:44.580 | It's a little tacky and trashy to buy a big, fancy, flashy house and have some cheap thrift
00:33:52.940 | store or budget mattress store mattress.
00:33:57.340 | Not a good use of money.
00:33:59.820 | Better if you have to choose and have to budget, and we all do.
00:34:02.980 | Better to buy the cheaper house and buy the best bed that you can afford.
00:34:09.900 | That comfortable sleep and that high quality bed and sleeping experience will be your probably
00:34:14.740 | most important valuable accessory of your house.
00:34:18.480 | Have a junky looking couch, but have a comfortable bed.
00:34:22.300 | You should own the best, most comfortable bed that you can find that fits within the
00:34:26.460 | scale of your budget.
00:34:28.380 | That bed should be outfitted with comfortable, luxurious sheets or a comforter that is very
00:34:33.620 | comfortable for you.
00:34:35.740 | Other things that affect your sleep, the proper temperature.
00:34:38.180 | Temperature, all the sleep studies, having a proper cool temperature makes a significant
00:34:43.180 | difference proven on your sleep quality.
00:34:47.940 | Better to spend a little extra money cranking your AC down a little bit, if you're in the
00:34:51.300 | culture like I am, so you have great sleep than having a fancy looking front door.
00:35:00.140 | Better if you're going to spend a lot of time in your bed, make your bedroom an attractive
00:35:03.460 | place.
00:35:04.700 | Make it soothing.
00:35:06.540 | Make it beautiful.
00:35:08.020 | Make it somewhere that you want to be.
00:35:11.380 | Your standards are the standard you should follow.
00:35:14.300 | You shouldn't follow the housing magazine, but don't bypass that as a worthwhile investment.
00:35:21.060 | If you can spend a little bit of money on your housing, don't immediately run out and
00:35:24.700 | upgrade your house by buying a new one.
00:35:28.900 | Perhaps you should just simply go out and upgrade your house by improving your current
00:35:34.380 | one.
00:35:36.740 | Might be a very good use of money.
00:35:40.300 | Continue that train of thought.
00:35:41.300 | Figure out where else in your house do you spend the most time.
00:35:43.980 | Is it in your office?
00:35:45.040 | Is it sitting in front of your TV?
00:35:47.420 | Is it sitting in your reading chair?
00:35:50.940 | Buy a high quality reading chair.
00:35:52.540 | Buy a comfortable desk chair.
00:35:54.620 | Is it in your kitchen?
00:35:55.620 | Well, upgrade the kitchen.
00:35:56.820 | Make that a beautiful experience.
00:35:58.140 | Is it your back deck?
00:35:59.440 | Make that beautiful.
00:36:01.620 | You can improve the functionality of the house and get a lot of benefit of it if you start
00:36:05.140 | to look at it.
00:36:06.580 | And that's what I mean by focusing on budgeting for the accessories.
00:36:13.060 | I believe it's valuable to develop and practice the habit of frugality.
00:36:22.380 | But frugality does not mean never spending money or always getting the cheapest thing
00:36:28.300 | that you can.
00:36:30.520 | Frugality means spending wisely on the areas that are important.
00:36:36.180 | And I think a key part of that is this concept that I've outlined here for you today.
00:36:42.860 | The next time you're buying a major option, major purchase, whether it's a new gadget,
00:36:48.060 | a new piece of gear, exploring a new hobby, think carefully about the accessories that
00:36:54.560 | you want for that hobby.
00:36:57.740 | Think carefully about how you can put together a complete kit from the beginning and plan
00:37:03.500 | your budget so that you get full and maximum use of your purchase.
00:37:10.180 | Thank you for listening to this episode of Radical Personal Finance.
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