The purchases that make you richer are the ones that build skills, save time, grow your network or produce income, and the video names 15 of them. The common belief is that spending money makes you poor, and for the average person it does. The argument here is that smart, successful people have found ways to spend money and end up richer because of it.
Here are 15 things worth buying, plus a bonus on the difference between being rich and being wealthy.
Watch the full video here, or skip to the breakdown below.
The 15 purchases at a glance
- Useful education
- Time-saving purchases
- Your environment
- Country club memberships
- Online courses
- Debt repayment
- Books
- Business events
- Better accountants
- Coaching sessions
- Great birthday gifts
- Travel
- Another apartment
- Equity in other people’s businesses
- Time with your kid
1. Useful education
Much of the education on offer is not conducive to wealth or happiness. It prepares you to be productive enough to hold a job, then chains you to a cycle of debt.
Useful education is the antidote to the educational inflation happening now. Everyone is highly educated, but only a tiny minority has skills that are actually valuable. The world needs more electricians and engineers, not influencers.
2. Time-saving purchases
Anything that really saves you time is a solid purchase. If you are young and wondering what to invest in, the suggestion is to move to a rental with higher rent that is closer to work.
The math: 30 minutes saved each way is an hour a day, 5 hours a week, 20 hours a month and 240 hours a year. At eight hours a day, that is 30 extra work days a year, so you can justify paying up to 50% more in rent.
Spend that time on things that make you happy, inspired or rich.
3. Your environment
We are like plants when it comes to growth. If the environment is toxic, you cannot blossom, and when a flower does not bloom you blame the soil, not the seed.
Invest in everything you touch or experience: the bed, the pillow and the linens, comfortable shoes, a warm home and a decent view. Invest in what you eat, drink and consume too, because all of it shapes tomorrow.
Upgrade your environment because your environment upgrades you.
4. Country club memberships
A club is not about the spa or the golf course. It is a place to network, and the high fees keep the mediocre out so you are surrounded by successful people.
Most people see these fees as extravagant because there is no immediate return. The value comes in the long run. A round of golf takes roughly four hours, which is enough time to build connections and get to know each other while staying fit. That is why rich people golf so much.
5. Online courses
Education is moving online, and the best of it can be applied immediately. A wonderful online course is so valuable it feels like stealing from the teacher, while a bad one is the teacher stealing from you, so scout carefully.
A good course can change a life for a few dollars, and many come with a money-back guarantee. Wherever you are in the world, you can find an expert to walk you through the practical side of what interests you.
The ultimate skill, the script says, is learning how to learn. Once you have it, you can pick up any other skill, which makes it the ultimate competitive advantage in a fast-changing world.
6. Debt repayment
Debt is the closest thing the modern world has to slavery. It makes poor people poorer and rich people richer, and 99% of the population cannot tell good debt from bad debt.
The longer you hold debt, the more interest you pay. The poor go to the bank to ask for money, while the rich get calls from the bank offering money at discounted rates.
You cannot be free unless you are debt-free, so buy back your freedom by paying it off.
7. Books
Books let you live more lives than your own, and they are among the most underrated asymmetric investments. A book costs $15, and ten books can change your life for the better. That is $150, yet people would rather watch a reality show than grow.
Not a reader? Try audiobooks. Recommended titles are Die with Zero by Bill Perkins, Tuesdays with Morrie by Mitch Albom and Antifragile by Nassim Taleb.
8. Business events
Business events are a more diverse version of the country club. People gather for motivation, knowledge and contacts, and you get access to some of the most influential people in your industry. The script says this is how Alux connected with names like Gary Vaynerchuk, Jordan Peterson, Gabor Mate, David Sinclair, Mark Manson and Adam Grant.
The VIP ticket is not worth it for the front row, since you have probably heard the speakers’ ideas online. It is worth it for the private party after the event, where business is done, true networking happens and many deals come together.
It takes only two or three events to build a foundation of contacts who can introduce you to everyone else.
9. Better accountants
If one direct service earns its keep, it is the accountant, or the tax advisor if you are in the US. A good one may cost two or three times as much as a mediocre one but can save you 10 to 100 times the money.
Accountants are the magicians of the financial world. The video also notes you are under no obligation to pay more tax than the legal minimum, and that if you want to contribute more, you can do it directly, since the government seems a poor middle-man.
10. Coaching sessions
Coaching means paying someone who has done it themselves to help you figure things out. A good performance coach raises your performance, and performance directly alters the bottom line.
The cost is put at about $500 for a one-hour session or around $5,000 a month for an executive coach. Some talk more than they help, but a few know what they are doing and can save you years and millions of dollars in trial and error.
Coaches and mentors play a major role in an entrepreneur’s growth once they take it seriously, though most people cannot afford them.
11. Great birthday gifts
The best gifts make a difference. They are thoughtfully chosen, took effort and time, and are tailored to the person receiving them.
People forget how few birthdays we have and how few moments we get surrounded by everyone we care about. A great gift is remembered for life. Do not cheap out, because you are not the gift.
12. Travel
The quote that inspired this whole list says travel is one of the only things you can spend money on that makes you richer. It builds a different kind of wealth: memories, which pay what the script calls a memory dividend.
Travel early, when it costs less and before comfort has spoiled you. In your early 20s, spend what you make on travel, because it is the best return you will get.
Against most long-term advice, the video says not to save hard when you are very young, since income tends to climb in your 30s and 40s and savings get chewed by inflation. As you age, your memory bank matters more than your actual bank, and some trips are only available for a limited time.
13. Another apartment
The controversial idea: do not spend your earned income. Work hard, buy any asset you can afford, and spend the money the asset makes you. You get rich buying things that earn money or rise in value.
You do not need to be a genius to get rich in real estate. Buy a studio, a condo or a house and rent it out, and it pays you every month. It may not fund your dream life, but it can pay your utilities forever.
This is called expense arbitrage: list your expenses, then buy assets that pay them for you. As long as your lifestyle does not balloon, your assets eventually cover everything, and that is when you are free.
14. Equity in other people’s businesses
Buying a minority stake of 20 to 40% in a profitable business is described as a cheat code. You skip running the whole business and caring for the entire team.
With your money, knowledge and connections, the business can fund fast growth and open doors, and then you take a step back. The company pays dividends, you work with a great team, and you can build things alongside them. Partnerships are an essential part of growth.
15. Time with your kid
Sometimes more money is just too expensive, and some of the best things in life are not for sale. It is easy to postpone things, but later sometimes never comes.
The tip given is to have kids when you are almost ready, around 60 to 70%, because everyone who has kids late regrets waiting and the gap only grows. With an assistant to free a couple of hours a week, spend them with your children.
Kids let you relive your childhood, this time with money, resources and a little wisdom.
Bonus: being rich means earning a lot by working. Being wealthy means your fortune still grows tomorrow if you stop working today.
Rich versus wealthy
The bonus draws the line between the two words. You get rich by moving aggressively forward: learning, investing and reinvesting profits. Life is a two-way street, though, so now and then make a defensive move and take some chips off the table.
The example given is a business earning $1 million a year. Reinvest part of it, and park part in an uncorrelated market such as the S&P 500, ETFs or real estate. You count as wealthy once your passive income matches or exceeds your active lifestyle.
FAQ
What can you buy that makes you richer?
The video lists useful education, time-saving purchases, a better environment, club memberships, online courses, debt repayment, books, business events, better accountants, coaching, travel, a rental property, equity in other businesses, and time with your kids.
Is paying off debt a good use of money?
Yes, according to the script. Debt makes poor people poorer, and the longer you hold it the more interest you pay. It argues you cannot be free unless you are debt-free.
Why would a country club membership make you richer?
The fees keep the mediocre out, so you meet successful people. A four-hour round of golf is a natural setting to build connections, and the payoff comes in the long run.
What is expense arbitrage?
It means listing your expenses and buying assets that pay them for you, such as a rental that covers your utilities. If your lifestyle stays steady, the assets eventually cover all your costs.
What is the difference between rich and wealthy?
Rich is earning a lot of money by working. Wealthy is earning money in your sleep, so that if you stopped working today your fortune would still grow tomorrow.
Is travel a good investment when you are young?
The video says yes. Travel is cheaper early on, and the memories pay what it calls a memory dividend. It argues that in your early 20s travel is the best return you will get.
Keep reading
- 15 Things Money CAN’T Buy
- 15 Things Money CAN Buy
- 15 Things People Who Are Smart with Money Don’t Do
