6 Things To Stop Buying To Make More Money, According to John Liang
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His advice and real-life experiences with losing money these ways provide valuable lessons for anyone looking to get their finances in order.
Brand-Name Clothes
Liang recalled wearing brand names with big logos to try to fit in. However, he realized that spending money on brand-name clothes didn't actually translate into social status or happiness. Now, Liang said he avoids trends and instead opts for simple, durable clothing that he wears until it's worn out.
Take a cue from Mark Zuckerberg's closet. Variations of his oft-worn gray T-shirt and jeans combo can be bought for an affordable price. Investing in a few quality, versatile pieces not only saves money but also reduces the mental load of daily outfit decisions.
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Flights
Liang has traveled extensively but admitted that early on, he wasted a lot of money paying cash for flights. He learned to leverage credit card points and airline miles to drastically reduce travel costs. For example, by earning points through rent payments or credit card spending, he cut the cost of expensive long-distance tickets from around $1,000 to just a couple hundred dollars.
The points and miles game, also known as 'travel hacking,' can help you save thousands on travel expenses such as flights and hotels. However, you should avoid accumulating credit card debt, make sure you know what benefits you get for your annual fee and always pay your balance in full.
Electronics
Liang confessed to being a gadget enthusiast but realized that upgrading tech every year was unnecessary. He used a 4-year-old iPhone while growing his social media presence and upgraded his MacBook Pro after six years when it was barely functional. This approach saved him thousands.
Over half of Americans upgrade their smartphone every two to three years, while 12% upgrade every year, according to Consumer Affairs. This is often driven by marketing rather than actual need. Unless your device is broken or severely outdated, holding on to electronics longer can save money and reduce electronic waste.
And when it is time to upgrade, you can save money by buying refurbished or previous-generation models.
Sales and Clearance Items
Liang pointed out the danger of 'spending to save' during sales, which often leads to unnecessary purchases. Just because something is discounted doesn't mean it's a good deal if you weren't planning to buy it in the first place.
The original price increases the perceived value of the item, and seeing it on sale for less encourages you to impulsively buy in order to take advantage of the 'savings.' True savings come from buying less, not buying more just because it's on sale. To avoid falling into this trap, buy only sale items that were already on your shopping list or that fulfill a genuine need.
Buying in Bulk
Liang grew up loving bulk shopping trips to Costco but found that as a household of two, buying in bulk often led to waste, especially with perishables. Although bulk buying can save money, it works only if you can eat everything before it goes bad.
The U.S. Department of Agriculture estimates that Americans waste about 30% to 40% of the food supply. Buying in bulk is a smart strategy only when you have the storage space and consumption rate to match. Liang and his family still buy bulk items like toilet paper and paper towels, but shop for perishables at local grocery stores to minimize food waste. This balance helps avoid the hidden cost of spoiled food, which can negate any savings from bulk discounts.
Complicated Investments
This is the most impactful change Liang made. Early on, he lost thousands investing in individual stocks and got caught up investing in complicated financial products. He now advocates for simple, low-cost index fund investing, just like Warren Buffett.
According to The Motley Fool, over the past 20 years, just 8.2% of actively managed large cap domestic mutual funds outperformed the S&P 500. By focusing on broad-based index funds, keeping fees low and maintaining a long-term perspective, investors can avoid the pitfalls of trying to beat the market with complicated strategies that often benefit the sellers more than the buyers.
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