10 Things Wealthy Retirees Stopped Buying To Stay Rich

Today I'm in South Hamilton Park here in Novato, California, and we're going to talk about 10 things that wealthy retirees don't waste their money on. Because the interesting thing about people who retire and never run out of money, it's that it's not like they picked the best investments to be in for the long-term or had an enormous salary or anything like that. What it actually comes down to is what they did not spend money on. It almost goes back to that saying, it's not how much you make, but it's about how much you keep. That same principle applies here as well, because depending on how you spend your money, it can either set you up for life for a wonderful retirement or completely derail it. And these things are not in any particular order, but I think they're all equally important. The first one is constantly upgrading your car. There's a big difference between replacing a vehicle that's 15 or 20 years old and it's on its last leg and it's become unreliable, it's always in the shop, all sorts of things like that, versus having a five-year-old vehicle that you just want the newest model with all of the latest gizmos on it. That's a totally different thing. And people who end up retiring comfortably look at this situation from two very different angles. They ask themselves, why should I spend 60 grand on a brand new car for something that does exactly what my old car does, which is take me from point A to point B. New cars also come with higher registration fees, higher insurance premiums. And if you need a loan, now you have a car payment, you're also paying interest versus if you keep a car for 15 years or so and say you pay it off in five like a normal person would, not taking one of these crazy seven or eight-year car loans. Well, now you enjoy 10 years of owning that vehicle interest-free with no car payment and all that extra money that you would have been spending on a car payment or interest ends up in your investment accounts and fuels your retirement. And that's certainly going to be one of the common threads throughout this entire list, because it's not that a wealthy retiree would never buy a new car. It's just that they're probably not going to buy it until they actually need it. Once it's a necessity, sure. But while it's still a want, probably not. This next one, all of us can relate to, which is paying for subscriptions that you're not using or you have forgotten about. And this is a relatively new problem because 20 years ago, basically nothing was on subscription. Only your monthly cell phone bill or monthly utility bill that you just had to pay for was a subscription, essentially, of recurring monthly payment. But a lot of other things you could just buy and own forever. You still can, but it's becoming harder and harder, most notably movies and TV shows, things like that. You can still buy the physical edition, but for some crazy reason, people decide to pay for streaming and rent everything instead. But this goes far beyond streaming. Streaming is just one of the things that require subscription nowadays. People are also paying for cloud storage, different app subscriptions, music subscriptions, news subscriptions, meal plans, software subscriptions, gym memberships that aren't being used, delivery subscriptions, all sorts of crazy things that you get lured into because there's a great signup bonus. Now, just having one or two of these isn't going to completely derail your finances. But when you have five to 10 of them, for example, and each one costs you roughly $20 a month or more, well, now you're paying possibly $200 a month or upwards in just monthly subscription fees, which once again could be redirected into future retirement savings, making a difference between retiring comfortably and running out of money in retirement. And so wealthy retirees know that this is a waste of money, and they thoroughly look at where their money's going each and every month. And if they see a recurring expense that they're not utilizing to its fullest, they cancel it. When was the last time booking a doctor's appointment was actually easy? Because for most of us, it's the opposite. You call around, you explain your situation to three different people, and then find out after all that they don't even take your insurance. So what do you do? You just don't book it. And that is the problem. Now, imagine skipping all of that. Imagine typing in exactly what you need and instantly seeing doctors near you who are already confirmed and in network. Imagine scrolling real patient reviews, checking actual open time slots and locking in an appointment in the time it takes to read this sentence. That's not a hypothetical. That's ZocDoc, and it's exactly what today's sponsor does. Best part, it's completely free. No hidden costs, no catch. A lot of these appointments are available usually within 24 to 72 hours, sometimes even the same day. At the end of the day, your health isn't something you can keep pushing to next month. So if there's an appointment that you've been avoiding, head to ZocDoc.com slash border narrow and get it booked. Thanks to ZocDoc for sponsoring this video and making it easier to take care of ourselves. Now back to the video. The next one, living in more house than you actually need. And of course, we had to bring this up as a primarily real estate focused channel here, because this can probably be one of the biggest difference makers on who retires comfortably and who doesn't, guys. Because if you buy more house than you can comfortably afford, well, what does that mean? Once again, we're talking about a situation where more money is going into paying for that house and all the upkeep and all of the utilities and maintenance surrounding it, and less money going towards saving for retirement. Now you might need a big house if you have a big family. If you have five kids, you might need that five or six bedroom house. That might be a necessity for a while, but keeping it in retirement might not make any sense. And I'm not saying it can never make sense because depending on how long ago you bought this house, if you're say here in California and you're fully utilizing your benefits of having ultra low property taxes due to Proposition 13 and the house is paid off, well, it might make sense to keep that big house even though you don't need it anymore, because it could actually be cheaper than buying a new house that's smaller. But in most other parts of the country where they don't have these type of deals on property taxes, that's not going to be the case. Basically, the larger the property is, the more expensive it's going to be to maintain in every single way, shape and form. And some people say, well, look at the equity I have in this thing. I've built up over a million dollars in equity. Yeah, but if you're spending all of your money maintaining it each and every year, you're not leaving yourself much leftover. And then eventually the house is going to have to be your retirement plan because you're going to run out of actual retirement money. Now you're going to be forced into a situation where you have to borrow against the house in some way, possibly even do a reverse mortgage. And that puts you in a bad position. Or what I would recommend instead is using one of the companies I've partnered with called Sell to Rent. They basically will help you sell your house to an investor and they let you stay in your house as a renter. And you might be able to close in as little as 15 days. You can get multiple competing offers on your house. You choose the one you like best. There's no credit check, no repairs. And you even have flexible lease terms that are all going to be discussed and thought out before the sale of the home. So if you are somebody who wants to use your house as your retirement plan, I would recommend looking into something like Sell to Rent over a reverse mortgage. The link is down in the description below. And while we're on the subject of houses, how about this one? Remodeling your house just because the style has changed. You know, there's a big difference between maintaining your house or upgrading things that no longer work. If your roof leaks or your plumbing is failing, your air conditioner dies, things like that, those are necessary repairs. But tearing apart a kitchen that functions perfectly or a bathroom that works perfectly just to upgrade the vanities or the kitchen counters, things like that, that's a huge waste of money. People say, oh, it's going to increase the resale value of the home. Well, so what? If you're not planning on selling the home anytime soon, then by the time you do sell, those upgrades are going to be outdated versus people who retire wealthy. They are much less likely to spend thousands of dollars replacing perfectly usable cabinets and countertops and flooring and things like that. People watch too much HGTV and they are very good at convincing you that you need to do all sorts of updating around your house. Otherwise, it's just garbage. And I love this next point. This one applies to everyone, guys, not just retirees, but buying things just to look wealthy, the fake rich epidemic that I love talking about. The people who try to look wealthy the hardest are usually the ones who are spending themselves out of a healthy retirement. People who always have to buy the new car every three to four years, which I already talked about, but that's just one aspect of it. They also got to have the nice designer clothes and the expensive watch, the newest electronics, the newest cell phone, all sorts of things like that. That doesn't show you what's going on behind the scenes in that person's bank account. There is a good chance that they are broke or at least not building a solid life towards retirement. And look, I'm not against consumerism and buying things that are expensive that if you can actually afford it, I think it's great, guys. I really do. If you've worked your whole life for something and you want it and you can afford it, then you deserve it and you should buy it. But recognize that is not the same thing as saying, well, I have been working hard. I still can't really afford it, but I'm still going to buy it anyways because life is too short and I'll just have to work longer and maybe never retire just because I do buy these things. And here's the thing. This is a mistake that a lot of younger people make because you really want to keep up appearances with people, especially since you have more of a social life. But imagine how important this thing is when you're 30 years old. How important do you think it's going to be when you're 70? You're going to care far less about what other people think of you, fast forward 40 years down the road, and you'll be glad that you didn't care when you were 30 once you're sitting fat on your endless retirement checks that keep coming in and you never have to worry about money again. Just imagine that type of lifestyle and that should be enough to stop everyone dead in their tracks from making this mistake. The real smart people would rather have 50 grand sitting in their investment account rather than 50 grand worth of things sitting around the house proving that they used to have 50 grand because now you don't. Now you just have 50 grand worth of depreciated stuff that if you wanted to sell it, you'd be lucky to recover half of the money. Here's a real good one, especially for people who are constantly worried about loss and making sure that they're insured for everything and that is insuring every little thing that you own. When you go to buy a new TV or a fridge or even a cell phone these days, they immediately try to sell you some type of insurance. You buy an iPhone, they want you to buy AppleCare. You buy the fridge from Best Buy, they try to sell you the three-year extended warranty or whatever and people get paranoid that things are going to break or they're going to break it themselves and they buy these warranties. But most of the time, you don't end up using this insurance and those are more things that drain money out of your wallet. Sure, you have to have homeowner's insurance if you have a mortgage, you have to have car insurance even though there's a 50% chance they might not pay out your claim, but you don't have to spend the extra $150 or $200 to protect your refrigerator that you just spent $1,500 or $2,000 on. It might sound scary to have to replace it, but these things do come with a stock manufacturer warranty and unless you get a limit, you're probably not going to need that warranty. So the difference between a wealthy retiree and somebody who throws money away is somebody who insures themselves against catastrophic losses while considering that smaller losses are something that they could reasonably absorb themselves. And if you are financially savvy, then there's no reason why you shouldn't be able to absorb that loss. And I'm not saying that these extended warranties on certain things never make sense. There are situations where it could make sense. You have to do that diligence for every purchase and determine that yourself. But it's just another thing that people waste money on. Here's another thing that wealthy retirees don't do. They don't turn their retirement into one giant vacation because after working 40 plus years of your life, it's easy to convince yourself that you're finally going to do everything you've always wanted to do. Now it's golf memberships, buying the boat, buying the RV to go cross country, going on cruises, expensive restaurants, all that stuff adds up pretty quick. I'm not saying you shouldn't enjoy your retirement, but the problem is living a lifestyle in retirement that requires an extra 30 or 50 grand a year that you shouldn't be spending. I think it's important to have things that you enjoy that are free. Like I'm walking right now. I actually love hiking. That's the number one thing I like to do here in California for anybody who wants to know. When I come here every summer, when I'm not working, I am on the trails. Guys, you find me at the gym, which some of my viewers have met me at the gym here in Marin County, or I'm on the hiking trails. I love being outside here and enjoying the nice mild temperatures in the summer and breathing in all that fresh air in the forest. I just love it. And it's free. You can also do inexpensive things like gardening and fishing, tennis, or pickleball. Those are all very inexpensive hobbies to have that won't break the bank in retirement. Sure. I'm not saying you should never golf or you should never take that cruise or whatever, but live within your means, guys. You have to do this in retirement as well. Not just when you're working to make sure that you never run out of money in retirement. Because that's one of retirees' biggest fears is running out of money. And the thing is, it's totally preventable. You don't ever have to run out of money, but it can be very easy to do so if you don't plan accordingly, properly for inflation and your increased cost of living as you get older and all the things that you wanted to do in retirement. The next one is becoming the family ATM. Once people that know you know that you have money, they might come knocking on your door asking to borrow some of it or just straight up have it. Most notably, probably your children. You see all these 25-year-olds buying homes today. And how? With mommy and daddy's money. Mommy and daddy are fronting the bill. And that is coming directly out of your retirement fund. And obviously, people want to help their children and grandchildren. If you can afford it, once again, go for it. But if it's going to make the difference of whether or not you're going to be able to retire comfortably and wealthy, and maybe you won't, then it might not be such a good idea. This can look like paying a child's rent, or helping with a car payment, giving your children or grandchildren the down payment money for a home, or just buying the home outright for them, paying for family vacations for everybody, or repeatedly bailing somebody out who's irresponsible from their debts. These are all bad decisions. And over time, if you continue to be the family ATM, you're going to end up robbing yourself blind. And think about this. Why does the 25-year-old need to buy the house today? They can be smart, and responsible, and work hard like you likely did, and like everybody else who doesn't have that ability, and earn it on their own. They'll definitely appreciate it a lot more, and take care of it a lot more if they do have to earn it on their own, that's for sure. Also, they have much more of a runway ahead of them. If you're in your 70s, let's say, giving away 50 grand for a down payment on a house might shave off a few years of retirement for you because you're losing the compounding effect that you will have till the end of your life as well. Don't forget that. Versus somebody in their 20s or 30s who has that extra runway and time to save that money. And some people just like to twist my words around. I'm not saying never help anyone, and be selfish. I'm just saying, don't make everyone else's financial problems your own, and put your own self in the poor house because other people constantly need your help. This next one is very important and implies to everybody if you have a retirement account, guys, and that is paying investment fees you do not understand. If someone tells you they're charging you 1%, that sounds insignificant until you realize that 1% of a million dollar portfolio is $10,000. And that might not be a one-time expense. Depending on the arrangement of the fees, you're potentially paying that percentage again and again, year after year, which can add up to a substantial amount of money over a long retirement. And I'm not saying you shouldn't use a financial advisor or that they're all bad. In fact, I believe the opposite. I think a good financial advisor is going to put you in a much more favorable position than you could probably do on your own, especially when it comes to financial planning and tax strategies you might not be aware of, and planning your withdrawals in retirement, estate planning. All of those things make a tremendous difference on how much money you end up with and making sure that you're pulling the right amount every year and things like that. But it's important to know exactly what you're paying for and what you should be receiving in return. And wealthy retirees aren't really obsessed with avoiding every single fee possible, but they also don't really pay thousands of dollars a year for services without understanding if they're getting the true value from it or not. So the idea here is that you need to make sure that if you are paying for something like that, you understand and you're aware of what you're paying for and if you're getting the value from And this last one is probably the one that every human can relate to the most because we have all done this in a moment of weakness, which is spending money to change how we feel. Because sometimes buying that brand new Corvette or going on a bin shopping spree with Amazon or something like that isn't just about the stuff you're buying, it's about the dopamine hit that you get from buying it. Sometimes we just like to do things as people that make us feel better, whether it's eating ice cream or buying the new car. Or you might see that your friend just put up a bunch of pictures from their recent vacation to Europe and now the next thing you know, you are buying an even better vacation to Europe because you have to feel good. You got to feel superior, or at the very least, like you can afford to do it too. And just like every other expense on this list, it's not like doing that one time is going to wreck your finances unless it's just a crazy purchase, buying a massive house you can't afford or something like that. But the thing is, all of these things are kind of on the smaller side when it comes to expenses. But the thing you got to realize is they all compound, they all add up to thousands of dollars possibly being wasted per month. And over 30 or 40 years, you are losing out on investing and compounding hundreds of thousands of dollars in retirement accounts, which ends up being millions once you actually are retired. So that's how this all gets you in the end. I think a good rule of thumb that people can use when it comes to making an unnecessary purchase is would you still want it if nobody else knew that you bought it? Or are you still going to get just as much enjoyment out of it in a couple of months from now as you are on day one? And if the answer to those questions is no, well then you might just be buying it in order to make yourself feel better in the moment, not because it produces long lasting enjoyment. And so just like that book, The Millionaire Next Door, this situation applies when it comes to being wealthy in retirement. Guys, you know, seeing somebody who drives the luxury car and who lives in the bigger and nicer remodeled house, people automatically assume that that person is doing incredibly well financially, but you cannot see what their finances look like from their driveway. You know, instead, the person who lives in the house that hasn't been remodeled in a couple of decades and drives a 15 year old car might actually be the wealthiest person on the street because the ultimate luxury in retirement is never having to worry about running out of money. Just remember that. So if you guys enjoyed this video, make sure you subscribe to the channel. And if you don't want to wait for my next video to come out, check out this one on the screen right over here, and I'll see you in the next one.