Most of my examples are fictional. But this one is REAL. I literally have two friends around 30 years of age who each just bought a new mattress. And they did it in very different ways. The names and emojis have been changed to protect the guilty of burning money.
Meghan legit did just buy a $3,000ish mattress (originally $6,000, but half off! What a deal!) PLUS, the mattress company was even so nice as to LOAN HER THE MONEY INTEREST FREE FOR SIX YEARS. Hey, that’s free money. Can’t pass that up.
But wait. No it’s not. Free money is when you don’t have to pay it back. Meghan has to make payments for the next six years. The mattress company (whose cost on that mattress is probably closer to $300 or less) now gets to make a 90% and $2,700 profit margin over the next six years. See how it’s not free money? It’s more like a $1,000 mattress (still a VERY expensive mattress) with a 52% interest rate. FIFTY-TWO PERCENT INTEREST. It’s straight up bananas.
Meanwhile Madison wheeled and dealed with a local furniture dealer. She price shopped, and let the store know she go to another place if they can’t beat the price. Ended up getting free delivery thrown in and paid $209 out the door, tax and all.
What she DIDN’T spend on a $3K mattress over six years will grow to about $30,000 at retirement. That’s like 6 months to a YEAR of time she won’t need to work. You know how great it is to take a day of PTO? Imagine SIX MONTHS. That’s what this affordable mattress just got her.
And before you YOLOers tell me that it’s worth it for a good night’s sleep. I knew you would say that so I got the two beds together and selected 50 random people to spend a night with Meghan and Madison in each bed (one at a time, don’t be gross). I had them rate the beds and fill out a survey. The results are in and no one could tell the difference.
I made all that up about the 50 people, but I bet you couldn’t tell the difference. They both look and feel like nice new beds.
As always, reminding you to build wealth by following the three PFC rules: 1.) Live below your means and 2.) Invest early and often. 3.) Don’t buy $3,000 mattresses.