A few days ago, I posted an article about wakesurfing on an empty lake here in Austin.
I shared an article I wrote one year before, when I first noticed that on most weekdays and weekend mornings, the lake is empty. Many homeowners spent $10M+ on houses for water they don’t use.
This is Part 2 of that article. I use the case study of buying a boat to show how we can all make better purchasing decisions to enrich our lives.
Here are the main lessons I’ve learned.
Lesson 1: Invest in what you value most
I’ve put over 100 hours on my boat in the past year. 99% of it has been wakesurfing.
I have little interest in cruising around on a boat getting drunk.
I love working out, hanging out with friends, and spending time in nature. I get to do all of that wakesurfing on my boat.
It’s been a great investment in multiple activities I greatly value.
Lesson 2: Only buy what you can afford, including maintenance costs
I’ve had a few major issues with my boat. Only once have I planned to go wakesurfing with friends and had to call it off due to a mechanical problem.
I have had Malibu dockside service come out for three or four regular maintenance visits and a couple of small mechanical problems (defective O2 sensor, covered under warranty, and clogged ballast plugs).
Here’s an estimate of all my expenses outside the original boat purchase:
- Lift upgrade (one-time): $7,000
- Maintenance: $4,000
- New boards and life jackets: $1,600 (a friend bought a $1,500 board and “donated” it to the boat, so that’s not included here)
- Lift lease: $1,000/mo
- Gas: $80 per session (1-2X per week) (often covered by friends who want to pitch in)
- Lessons: $5,000 (still have about half unused)
If you add all that up, that’s $25K to $30K over the past year. $9K of that was for one-time expenses (gear and lift upgrade).
Wakesurfing is not a cheap hobby. It would be much cheaper to buy a surfboard for $1,000, spend $20 on wax each month, and go surfing on nature’s free propulsion (ocean waves).
However, I am fortunate to have made a good deal of money. So spending $30K on a hobby in a year doesn’t bother me.
That’s what matters. Are you spending within your limits?
Can you easily afford what you’re buying, including all regular and potential maintenance, with zero stress?
If not, don’t buy it. The whole point of making a discretionary purchase is to improve your life. If the expenses stress you out, you’ve made your life worse by buying it.
Lesson 3: Invest to save time
Driving to my boat takes 25 minutes each way. Plus, I need to spend at least 30 minutes filling up five gas cans at a gas station and manually fueling my boat before each session.
That part is a bit of a pain in the butt.
But boat slips are hard to get on Lake Austin.
I’m trying to get a slip that’s only five minutes from my new house. The only gas station on Lake Austin is right across the lake.
I’d save at least an hour every single session.
It will cost an extra $500 to $800 per month.
But by saving that extra time I’ll wakesurf more.
And remember, I chose not to spend an extra $100,000+ on a fancier boat. That means I can spend the extra $800 per month on a closer slip and still be way ahead financially.
So often, we’re willing to spend way more money upfront in one lump sum than we’re willing to spend spread out over time.
That brings me to the final lesson.
Lesson 4: Invest in experiences
I didn’t anticipate being able to upgrade to a closer slip. That’s not why I chose a cheaper boat.
I chose a cheaper boat because I could invest that same money into getting better at wakesurfing. With the same $100,000, I could buy 266 private lessons from one of the only two pro wakesurfers here in Austin.
I’ve only done around 15 so far, and for most of them I paid half the cost because I’d split the lesson with a friend.
That’s a few thousand dollars on lessons versus $100,000 on a nicer boat.
It’s much harder to spend money doing things than acquiring things.
It’s easy to spend ALL your money (and then some) on upfront purchases such as houses, cars, and boats.
It’s harder to invest the same amount of money in individual experiences.
Even if you went extreme on a vacation, such as investing $50,000, how many of those would you do in a year? One maximum. Likely only one every five years.
You’d have to plan it, research it, book it, schedule it, and coordinate with friends and family members to join you. Then, you’d spend time relishing in your experiences afterwards.
Yet it would be extremely easy to spend multiple $50,000’s on cars, homes, and toys.
And your life wouldn’t be better. Each new purchase would bring diminishing returns and more hassle.
Yet, how do most people spend their money? On things.
Live your life
Trillions of dollars are at stake to make us believe that happiness lies on the other side of another purchase.
What makes us happy is simple:
- Being fully engrossed in activities we enjoy
- Doing good for others
- Spending time with people we love and enjoy
If a purchase is well within your budget and brings you closer to those, then go for it. If not, invest directly in experiences instead.
You’ll create a richer life in multiple ways.
—Matt