We often get caught up in the idea of making big purchases without fully considering the costs associated with them.
In this episode we will explore the difference between price and cost through a conversation with my 15-year-old daughter about buying a car. While my daughter was focused on the price of the car and how to pay for it, I wanted to highlight the additional costs associated with owning a car, such as insurance, maintenance, and the cost of time spent away from other important activities. Understanding the difference between price and cost can also be applied to other significant purchases, such as buying a home.
As the summer approaches and people begin to explore new purchases, it is crucial to fully consider the cost of ownership before making any large financial decisions.
Key Points:
[01:25] #1 Calculation of cost of owning a car
[04:27] #2 Illustration of buying a $500,000 home
[06:15] #3 Importance of accounting for all costs associated with a purchase
[07:06] #4 Trade-offs when making a financial decision
If you loved this episode, you have to listen to these episodes as well:
>> Life Planning: Looking Beyond Finances with George Kinder
>> Success for Minority Teens with Carlos Gomez
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Want to chat with a fee-only financial planner? Shoot me an email at emlen@minoritymoneypodcast.com I Can't wait to meet you.
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