Gentle reader (don't you love that?), I want to help you. I want to take you on a journey leading to... well, I don't know what it'll lead to, that's up to you. But what I want to do is this: to lead you to a place where you are free to choose what to do with your life, rather than a place where you are locked into a life of work whether or not you love, or even like, it.
The truth is that your life is in your hands. There are many, many options out there, but most fall into the trap of debt/consumerism. It's a cycle - the more debt you show yourself as able to handle, the more credit you can obtain (and, at the moment, oh-so-cheaply!). And so. You buy a new TV, a new kitchen, a new truck. Add it to the pile of debt. To be cleared by the time you retire.. or after the children are through college.. or when you win the lottery.
Life goes on, the bills come in, some things get paid off, other things get replaced, but you never feel like you're actually making progress. Oh, sure, there is some money going into the RRSP, and of course your CPP entitlement will grow with each year. But, oh man, at what age will you be able to claim it?
70? 75? Who knows, by the time *you* get there!
Now. I'm not Dave Ramsey. I'm not (hopefully) going to preach. Here is my core belief: it's a choice.
There is nothing wrong with buying a new truck (but, in *my* opinion, there are alternatives that might suit you better). There is nothing wrong with getting a new TV.
But you have to look at the price. And no, not just the price tag. You have to account for all the extras - the tax, and if you're buying it on (longer term) credit, the cost of borrowing that money.
So, it's a choice. You can have that new truck (the salespeople will be so happy to help you with the loan!). You can have it every three years, and you will always have a payment. It's ok - it's a choice.
There is one thing in this life that is finite, and that is time. Every time you buy something before you are financially independent, you are trading your time for that thing.
In a really simplified example, if you earn $75k a year before tax/$60k a year after tax, and you buy a new truck for $30k, you are trading half a year of getting up, getting yourself to work, working. 100 days, more or less, will revolve around the workplace.
Is that bad? Again - it's a choice. Do you *really really* want that truck? Then sure - buy it. But it is a depreciating asset. In ten years, it will be worth a mere fraction of what you paid for it (and the worst thing is that after 3 years, most of that depreciation will have happened). You have to do a proper cost/benefit analysis.
What are the alternatives? Buy a 'beater' truck for a few $k - yes, more maintenance, but probably you'll worry less about throwing a whole load of gravel or topsoil in the back of it! Or maybe a car with a hitch and a small trailer would accomplish what you need?
Maybe not. Maybe you do *need* a truck, and you absolutely *need* it to be reliable, and maybe you have had bad experiences with secondhand trucks - ok. Buy the new one. But realise what it means - it means you are that much further from retiring, or rather, from having the freedom to choose whether to work or not, to play golf or start a business without the stress of mortgage payments.
You can afford to buy a new truck and retire early, if you are earning a decent wage, and make that choice. It's cool - and I think trucks are pretty cool (though I don't own one myself). But if you want early retirement, saving money and investing it have to become your initial thoughts when spending any amount of money. Habitual. A little checklist:
1. Do I need this?
2. Do I need to pay this much for it?
3. What is the optimal way of buying it?
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