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My Rule of Thumb for Any Purchase

Name: My Rule of Thumb for Any Purchase
Uploaded: 2024-09-27T01:30:19+00:00
Duration: 30 s
Channel: Shanli Liu, CPA, CTP
Description: In this short monologue, Shanli Liu, CPA, CTP, shares a personal finance rule of thumb for evaluating any purchase. She advises that if you cannot afford…

27 Sept 2024 · 1 min

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In this short monologue, Shanli Liu, CPA, CTP, shares a personal finance rule of thumb for evaluating any purchase. She advises that if you cannot afford to buy an item multiple times, you should not buy it even once. She illustrates the rule by comparing the cost of a $500–$1,000 item to an hourly wage of $100, showing that the purchase would require two full days of work. She argues that it is preferable to forgo the work and the purchase rather than sacrifice leisure time, emphasizing that valuing your free time over extra work should guide buying decisions.

If you can't buy it twice, don't buy it once, or even buy it 3 times or 4 times or 5 times over. Don't buy it once. When you're looking at the price of whatever the thing you're trying to buy is and you're making $100 an hour and you're looking at a $500 or $1,000 purchase, would you work 2 days in order to do that? Probably not. Would I work all day for 2 days to go out with the boys for 3 hours on Saturday? I'd rather just not work the 2 days. And that was the thing is whenever I had the— well, I'd rather just not work than do that thing. I shouldn't buy that thing.