People often ask me about the secret to building wealth. They expect some complex stock market strategy, a hidden real estate trick, or the name of a hot crypto token. The truth is far more boring.
Becoming a millionaire is mostly about what you don’t buy.
I didn’t get rich by accident. I built my wealth over decades of consistent investing, working hard, and ruthlessly cutting out purchases that simply don’t make mathematical sense.
I have an expression I coined 20 years ago for my first book:
“You can either look rich, or you can be rich. But you probably won’t live long enough to accomplish both.”
Society pushes us to buy things to look wealthy, but ironically, buying all that stuff is exactly what keeps most people broke. If you want to keep more of your hard-earned cash and watch your net worth grow, you have to stop falling for financial traps, starting with these 10.
The millionaire’s do-not-buy list
Here are things I’ve never bought and probably never will, no matter how much I have in the bank.
1. Brand-new vehicles: The second you drive a new car off the lot, it loses a massive chunk of its value. According to Edmunds, a new car can lose around 20% of its value in the first year alone.
I buy gently used cars — typically two to three years old — and let someone else take that massive depreciation hit. (See “The 10 Best Times to Buy a Used Car — and the Worst Times.”)
2. Extended warranties: Retailers push these hard at the checkout counter because they’re pure profit for the store. The math rarely works out in your favor. You’re almost always better off putting the cost of the warranty into a savings account and self-insuring against broken electronics or appliances. (See “Ask Stacy: Are Service Plans and Extended Warranties Worth It?“)
3. Luxury brand clothing: I don’t need a designer logo splashed across my chest to prove I can afford expensive clothes. True wealth is quiet. I prioritize quality, durability, and fit over flashy brands that charge a 500% markup just for a label.
4. Timeshares: These are notorious money pits. You pay a massive upfront cost, plus ever-increasing annual maintenance fees, for a property you don’t actually own and will likely struggle to sell later. (See “‘I Can’t Even Give It Away’: Why Retirees Are Desperate to Dump Their Timeshares.”)
5. The newest smartphone every year: Upgrading your phone annually is a relentless drain on your wallet. The technology just doesn’t change enough from year to year to justify dropping a thousand dollars. I keep my phone until it stops holding a charge or receiving security updates.
6. Bank fees: Paying an ATM fee to access your own money is ridiculous. The same goes for monthly checking account maintenance fees. There are simply too many excellent, completely free credit unions and online banks out there to ever justify giving a bank a cut of your money for doing nothing.
7. First-class flights for short trips: I appreciate comfort as much as anyone, but paying four or five times the economy price to reach the exact same destination at the exact same time just doesn’t make sense to me. I’d rather endure a cramped seat for a few hours and invest the massive price difference.
That being said, I often upgrade my travel experiences, especially flights and hotels, but I do so using credit card points.
8. Pre-cut produce: Walk through the grocery store and look at the price per pound of whole fruit versus the stuff chopped up in plastic containers. You’re paying a massive premium for someone else to wield a knife. I buy whole fruits and vegetables and spend the extra five minutes prepping them myself.
9. Fast fashion: Buying cheap clothes that stretch out or fall apart after three washes isn’t saving you money. You end up having to replace them constantly. I buy higher-quality staple pieces that last for years, which costs far less over the long haul.
10. Lottery tickets: It’s a voluntary tax on people who are bad at math. Your odds of winning the big jackpot are practically zero. You’re infinitely better off taking that five or 10 bucks a week and putting it into a low-cost S&P 500 index fund.
Building wealth is about choices
You don’t have to live a miserable life of deprivation to get rich. I spend money on things that bring me actual value, like travel, good food, and experiences with my family. But I outright refuse to bleed money on bad investments, unnecessary fees, and depreciating assets.
Take a hard look at your credit card statement this month. You might be surprised at how much faster your net worth grows when you simply stop buying things designed to keep you poor.
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