Ostentatious living is not the path to building lasting wealth. Last time I checked you can’t use a diamond medallion for a down payment on a home. I have yet to find any institution of higher learning that accepts a pair of retro Air Jordans for tuition. And just try to deposit a set of $5,000 rims as investment capital. Bottom line: Trying to design a future through voracious consumerism or absentee investing is sheer madness.
Instead of purchasing such quickly depreciating assets, learn this four-letter word: Save. Through focused, long-term investing you’ll benefit from the power of compounding and as a result, your money will grow exponentially. But you must stick with it. Those who pull their money in and out of the stock market due to volatility tend to produce real capital losses while others who sit on the sidelines realize zero capital gains. Just look at the activity of the Dow Jones industrial average over the past few years: On March 6, 2009, the index fell to 6, 547, at the time a 12-year low; exactly three years later, the index closed around 13,000, a four-year high. To further make the case for intelligent investing, on that same day in 2009, you could have purchased a single share of Apple stock at $86; three years later that same share of Apple was trading at $542—a 530% return.
My message is clear: Delay immediate gratification so that you can maximize your future. Use your greatest competitive advantage to gain wealth: time.