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Calculating the Cost of a Dream

August 5, 2016

 

Do these people look familiar?

 

Hopefully, yes.  It's funny that some people say we don't talk about money very often; that money is a taboo subject.  It's funny because we actually talk about money all the time.

 

We constantly have to balance our lives by deciding where and how we spend money.  Many people have a fixed income.  Whether they work a salaried job or are on welfare, social security, or disability benefits, a steady income can create be a source of security.   But it can also feel a bit stifling.  

 

What do you do when there is something you want that you do not have the money for?

 

     - You can save up your money, waiting paycheck-by-paycheck.  

     - You can borrow from a friend or family member.  

     - You may use a credit card.  

     - You can steal it.  ***NEVER recommended***

     - You can take from invested money you already have.  

     - Or you can Trade.  

 

Each option has a different cost.
 

Waiting for paychecks to accumulate means that you pay the cost of losing the time you could have spent using it.  If you need the item for a particular event, like a camera for a wedding or your upcoming vacation to a Peru, this may not be the best option.

 

When you use a credit card to acquire the item faster, you're saying, "I need this thing so badly that I am willing to pay more than the asking price."  Agreeing to pay the interest on a credit card means that the product or service you are seeking is worth more to you.  It's more valuable to you.  If the above scenario of photographing Machu Picchu seems hard to relate to, think of car repairs.  

 

 

A car today will get you to work.  Or the grocery store.  That means having a vehicle affords you the opportunity to make more money and acquire the essentials of living.  So if you remove the car, then you also lose the ability to make steady income and feed yourself (unless you have public transportation in your area or can bike or Rollerblade™, etc).

 

Of course, financially, it's better to borrow money in emergencies from family or friends to obtain a lower (or no!) interest rate.  However, depending on your ability to pay the money back, taking out a personal loan might have a higher cost if it damages your relationship with your friend... or your mom.

 

Stealing, of course, leads to the cost of added stress. 

     - Excessive planning

     - Risking jail time

     - Guilt and Shame (even if you get away with it)

and, of course,

     - Mom's mad again

 

[See above picture again]

 

 

Taking out of investments, works the same as a credit card.  You're paying more for the purchase because you'll be missing out on future income from compound interest!!!  Unless your purchase is going to afford you the money to reinvest, this is likely not going to be a good option. 

 

Or you can Trade.  Why did I use such a big font right there?  To get your attention.  Because that's what I want to teach you about here.  "Here" meaning in this blog, over the course of time. 

 

You have so much POWER in your ability to trade.

 

Sadly, most people in America use the weakest and most limited form of trade possible.

That's why people don't accomplish their dreams.

That's why people don't even dream big.

 

 

So Let's Talk About Trade!

 

 

 In the next post...  : )   Monday, August 8th.

 

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