When is $11 bigger than $10,000?
Well, by now you know I'm opinionated on money matters. Two of my friends recently spent over $20,000 each on renovating kitchens. Their reasoning was "the money is well-spent as it would update our home and we would get a nice return one day when we sell our home."
I had to bite my tongue really hard. If one is renovating to enjoy the updated looks and new stove and appliances, and if one has the cash to pay for it, then fine, go ahead.
But if the justification is based on an expected return on the so-called "investment," then I beg to differ. Spending $25,000 borrowed money on a new kitchen, use it for 10 years and expect that 10 years later, it would still look updated and people are willing to give you 4% to 10% return per annum on that is simply fantasy.
Stop dreamin'...
You may as well burn your money away.
This is my personal opinion of course... and I may be very wrong. But the other day, the Globe and Mail (Canada's prominent business newspaper) also published an article on the same crazy phenomenon that people are so careful on small purchases, but seem so careless when spending $10,000 or even $50,000. Human beings can be so irrational.
When is $11 bigger than $10,000?
Well, by now you know I'm opinionated on money matters. Two of my friends recently spent over $20,000 each on renovating kitchens. Their reasoning was "the money is well-spent as it would update our home and we would get a nice return one day when we sell our home."
I had to bite my tongue really hard. If one is renovating to enjoy the updated looks and new stove and appliances, and if one has the cash to pay for it, then fine, go ahead.
But if the justification is based on an expected return on the so-called "investment," then I beg to differ. Spending $25,000 borrowed money on a new kitchen, use it for 10 years and expect that 10 years later, it would still look updated and people are willing to give you 4% to 10% return per annum on that is simply fantasy.
Stop dreamin'...
You may as well burn your money away.
This is my personal opinion of course... and I may be very wrong. But the other day, the Globe and Mail (Canada's prominent business newspaper) also published an article on the same crazy phenomenon that people are so careful on small purchases, but seem so careless when spending $10,000 or even $50,000. Human beings can be so irrational.