What does it mean to be an owner, and not a buyer? Here in the US, it seems as if the acquisition of “stuff” reins supreme. As does debt – $5,000 average credit card debt, $30,000 in car debt, $37,000 in student loans, personal loans, payday loans, and mortgages. Debt rules the day, often exceeding the value of the stuff that was purchased originally. Interest, fees, and other charges pile up, causing the cost of the stuff one bought long ago to rise exponentially.
But what if we become owners, and not buyers? It’s a mental shift, but a powerful one. Lets explore more about what it means to be a buyer, what it means to be an owner, and why one is better for your finances than the other.
Being A Buyer – Instant Gratification
We all know them – the people that love to shop. They buy, and buy, and buy. They’re keeping up with the Joneses, whether real or imagined, and are constantly “treating” themselves because they “deserve” it.
New clothes, new shoes, new cars, stuff for the kids. Bigger cars, bigger homes – because the old ones are just too small now. Amazon beckons, with Prime shipping of course, and that two year old cell phone is just too slow.
No moment of discomfort can possibly be felt by any family member. When the TV is turned on, cable TV must stream through with as fast a speed as possible. Smart phones must work everywhere, apps must be purchased, and movies downloaded. Kids must never hear the word no, and everything of course must be bought brand new.
Being a buyer means getting what you want, the minute you want it – future self be darned. So in exchange for getting whatever you want the easy way, you spend the future paying for it.
Debt is usually the name of that game. If not debt, they’re robbing their future selves of financial security in exchange for what they want today. This is how you can end up with two car loans, and other debt, unable to get the company match in your 401k (by contributing only 6% of your income!) when you make six figures. They’re living so close to the financial edge that it only takes one negative event and the whole thing comes tumbling down.
What It Means To Be An Owner
An owner doesn’t rob from the future to pay for the present. Purchases are carefully considered, and the definition of “need” is much more strict than it is for buyers. A need is a true need – an essential – something that you would not be able to survive without. Food is a need, but fancy food and dinners out are a want. Water is a need, but bottled water is a want. A car might be a need, but a fancy car, SUV, or new car is a want.
An owner recognizes that items purchased today are bought with their “life energy” – and once that dollar is gone, it is gone forever. Not only is that dollar gone, but the children and grandchildren it would have earned had it been invested are gone as well. So purchases are carefully considered, not only with what has to be given up today to buy that item, but what will be given up in the future as well.
Does this mean an owner doesn’t get the wants? Of course not. But they are carefully considered, and debt is not incurred on the way. If it is, then it’s for an asset, and likely not a depreciating one. Real estate and business investments are a yes – fancy new cars that go down in value by ten grand as soon as you drive off the lot are not.
Instead of buying a new car, that money is put into car companies. Rather than tons of new clothes, clothing companies are purchased. There aren’t necessarily shopping sprees at Walmart, but they own shares in Walmart. And smartphone companies are part of the portfolio. Especially when you own index funds, you own shares in all the top companies in the country – and the world.
So Don’t Let Your Stuff Own You
Become an owner, and not a buyer. You’ll become mentally free, financially free, and be much less burdened in general.
What are your thoughts? Do you know a lot of buyers in your own life? Are you an owner, or working towards it? Let me know in the comments!
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This post presents an interesting take. It’s a vital pivot to make when you fight against instant gratification and also keeping up with the Joneses to keep future life and well-being in mind.
For me, 2 important points that you mentioned are – taking debt only for appreciating assets and investing in a company rather than buying it’s products. Great thoughts to start a week :).
This post has some valuable ideas that will benefit people of all ages. Understanding the difference between needs and wants is one of the biggest steps to getting control of finances.
“No moment of discomfort can possibly be felt by any family member.”
What a great line! That sums up how so many people approach life, sadly. And it leads to them needing a job well into their 60’s and 70’s.
Good grief – this is my MiL to a tee…
Her: “but I don’t mind working!”
Me: “but what if your poor health catches up with you and you CAN’T work any more?”
Thank goodness her son is more sensible!
This has been a process for us. We’re doing our best to shift from being consumers to owners at least 50% of the time, which is a bit more reasonable than all the time, since we DO need to eat and live and so on.
Great perspective, the pressure to be a buyer is everywhere. So much so that I tend to get really overwhelmed whenever I have to enter a mall of some kind!
At first glance, this seems to be a simple concept until you REALLY start thinking about it. When I think of people with high net worth, it’s true their money is rarely just sitting in a bank account or in their closet in the form of clothes or what have you. It’s in a business they started or assets that produce income.
Actually I have a slightly different take on this. I own a few real estate properties, but right now I’m living in a rented place. I plan on travelling a lot so I can’t just buy a place everywhere I go. I think experiences are more important than material goods, and experiences are “buying”.
Great perspective on this, didn’t really think about it in that way. You should invest more in a company rather than trying to consume their products.