Why you should take sound advice.
Recently, I had a discussion with a long time client that seems to always have a challenge taking sound financial advice. She always listened to the advice and felt that her financial concerns would be met because of her income.
She earns $90,000.00 a year, her net income monthly is $5734.00 after all deductions. Over the last year she dismissed my advice to deal with her home and the purchase of a new car. Since then, she has loss the home to foreclosure and purchased a pre-owned 2002 Chrysler with a car note of $635.00 for 48 months.
Just this week, she went to a local Wal-Mart to send off her nearly late payment to encounter a cashier that was very customer oriented; maybe too much. As the cashier received the payment she said to my client, “You must be driving a Benz or something”. In amazement my client asked “Why would you say that?”, the cashier replied “With a payment like this you got have a luxury car”.
With laugher my client said “No I drive a Chrysler”, the cashier said “I drive one to, mine is a 2010 and I only pay $285.00 a month”. In shock, my client only replied by saying “Really” got her receipt and walked away.
This is clearly a situation where it’s not about income, it’s about decision making. My client’s income is possibly three times that of the cashier. However, the decisions made by both of them, it is safe to assume has determined the cost of what they would pay for the same item.
The cost of a 2002 Chrysler at $635.00 for 48 months is $30,480.00
The cost of a 2010 Chrysler at $285.00 for 72 months is $20,520.00
This is a very high cost for decision making.
Making sound financial decisions can and will be challenging at times. But you must realize that is not about the income that will set you on the path to wealth. It is about learning to make sound financial decisions in every area of your life. Paying your bills on time, saving money, reducing your spending, creating a budget, eliminating your debts and starting an invest plan as soon as possible.