Have you ever looked around at people who appeared to be miles ahead of you financially and thought, “what do they know that I don’t?”. While there could be a host of different reasons why you your respective financial situations differ, chances are if they are lapping you financially, they know certain things about money that you’re still unaware of which is why I want to share with you five money tips you’ve never heard before that will definitely change your financial life for the better!
Money Tip #1: Avoid Iceberg Costs
When you think about the movie Titanic, what comes to mind? Chances are you think about two things: how much you cried during the movie and how much it must suck to hit an iceberg. Unfortunately, many people are allowing themselves to be just like the Titanic and are regularly crashing into icebergs that are literally destroying their financial lives. Cue iceberg costs.
Yes, you read that right, there are actually such things as iceberg costs so my Titanic analogy was more relevant than you probably thought. So what are iceberg costs? Iceberg costs are hidden costs associated with an initial action or financial outlay. Let me share with you a couple examples now.
One example of iceberg costs are hobbies. Let’s say that one night you accompany your friend to the driving range to hit a bucket of balls. You have fun at the range and think to yourself that maybe playing a full round of golf would be fun, no harm in that right? However, then one round turns into a full season membership and a new set of clubs and all of a sudden that $10 bucket of balls at the range has turned into thousands of dollars in expenses. Hence, the iceberg — you see the initial cost however other costs exist below the surface.
Now, maybe you don’t golf so that examples doesn’t really hit home for you — no problem! Let me share with you another example that will pertain to most people. Take your car. Whether you bought it new or used, before buying it you will be made aware of the purchase price of the car. Therefore, when you buy that $20,000 car, it appears to cost you $20,000 but that’s just the start of the economic outlays. You then have the cost of gas, repairs, insurance and even a body kit that was prompted from you watching the new…