Should you buy a second home, RV, timeshare, or a boat? Chances are they could be horrible for your financial life, but, if your lucky, your friends may make these purchases. We all have friends, and as humans we are hardwired to stand out from our peers. Sometimes our peers make financial decisions that would not be great for our personal finances, but we can take advantage of those purchases that they have decided to make. We recorded a show back in 2016 where we discussed financial mistakes you hope your friends make. So, we are returning with a fresh take on that episode.
Join us for this week’s episode as we share the financial decisions you hope your friends make. Our goal here at the Money Guy Show is to always help you understand how to best use your army of dollar bills to achieve financial independence.
Here’s What You’ll Find Out in this Episode:
- Buying a second home: Many times people look at the benefits of owning a second home (appreciating asset, tax breaks, rental income, and unlimited vacations) but often overlook the overall cost of owning a second home.
- Owning a timeshare: Timeshares are often pitched as a great deal for you and your family. There are many parts to owning a timeshare. Many times they use high pressure sales tactics and huge giveaways to lure you to buy. Timeshare contracts can be difficult to understand, have high maintenance costs, and a very complex system on when you can use the property.
- Recreational Vehicles: RVs seem very good in theory. They can qualify as a second home tax deduction, but they depreciate in value. There are many hidden costs to maintain a recreational vehicles.
- Boats: We have all heard the joke that the best days to own a boat are the day you buy it and the day you sell it. Always make sure to consider the costs of maintenance, storage, and fuel. According to Dr. Stanley’s book, 93% of boat enthusiasts are not millionaires, and 70% of millionaires have never owned a boat.
Honorable Mentions:
- Country Club Membership: The average annual cost of a country club membership is $6,240. In addition to that there are initiation and capital fees as well.
- Season Tickets: The problem with season tickets is sometimes the market value does not align with the overall costs of the tickets. Also, there can be other fees associated with the cost of the tickets.
- Gambling: A gambling trip where no one is a gambler. If you take the trip with a risk taker you will be able to experience the highs and lows. If not, you may take a trip that will be not be exciting at all, or worse – you’re forced to be the risky one of the group.
Resources Mentioned in This Episode and Related Episodes
- Stop Acting Rich
- How To Think About Money
- Homeaway
- VRBO
- David’s Vacation Club Rentals
- RedWeek
- Cruise America
- Financial Order of Operations: How To Prioritize Your Financial Goals
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