If there is one thing that we Americans love to do, it is entertain ourselves. We are constantly looking for ways to have more fun and to make our neighbors and friends envious of our experiences. Naturally then, many of us fall prey to hobbies that are more costly than we initially thought, and they are keeping us poor without us even realizing it! Based on my encounters with various family and friends, here are the top 5 hobbies that are keeping you poor.
Owning a boat seems to be one of the top wants of any red-blooded, hard-working American. When we pass by a nice house with a fairly new SUV and a boat gleaming in the driveway, we just can’t help but get envious. Oh, how nice would it be to own a boat? We could invite our friends to our slip and party every weekend. We will be tan, relaxed, and everyone will love us. Many people long so much to be a boat owner that they jump the gun and decide to buy one on credit (instead of waiting until they can actually afford one).
So, the typical boat owner most likely bought a boat on credit that cost them $20,000 or more. Think of all the new expenses that they just signed themselves up for:
- Paying interest on the loan
- Paying for the fuel (which can easily cost more than $400 for a full tank)
- Insurance each month (you know, in case someone hits it or it sinks at the dock)
- Maintenance (BOAT often stands for “Bet On Another Thousand”…they are expensive to fix)
- Paying extra for all the high-priced food and beer at the marinas
Bottom line, boats are expensive and are keeping you poor. If you want to be rich, you might want to wait a while before you buy one (or just become friends with someone that has one).
Horses are amazing animals and can be fun to ride (if you are into that sort of thing), but they are not cheap to own. Have you ever owned a dog and were surprised by the total monthly costs after factoring in food and medicine/check-ups? Well, multiply these costs by about 10 and you have the actual cost of owning a horse. More specifically, here are the expenses if you plan to own a horse and board it somewhere other than your property:
- Housing – often at least $500 a month, but can be upwards of $1,200 or more in urban areas
- Horse trailer – if you ever plan to move your horse, you need to have a trailer
- Food – this can easily cost $150 to $250 per month
- Farrier (hoof trimming) – $25-$50 per month
- Tack and Grooming – $50 a month
- Health Care – better put $100 away each month because your horse will need care at some point
- Training – optional, but is an obvious expense if you want a trainer to help your horse out
There is a reason why only the wealthy have horses. If you are not rich, I would suggest that you NOT own a horse.
There are quite a few people in the world today that get their sense of identity from the car that they drive. For this reason, they are not buying 10 year old Honda’s. No sir, they are purchasing brand new Mercedes and BMWs and trading them in each year for the newest model. When someone buys a car like this, they are often paying $60,000 or more, and then trading it back into the dealership a year later for $42,000 or so. Either that, or they will lease the car for about the same expense. If you can handle simple subtraction, you know that this habit means that you’re paying out $18,000 per year just to drive a new fancy car! Unless you’re a CEO and making millions of dollars each year, you probably don’t want to get into this habit. It will most certainly keep you poor.
This one is fairly obvious, so I’ll keep it short. The house always wins. I know you might think that you are great at gambling and are winning more often than you are losing, but I can almost guarantee that you aren’t. Gambling is not a way to get wealthy – it will almost certainly keep you poor for life.
#5. General Recreation
This is probably the most common way people are staying poor and they don’t even realize that it’s keeping them down. Think about it though. The common family has $8,000 in credit card debt, has student loans, a car payment, and a large house mortgage. They have massive debt and are barely surviving from paycheck to paycheck. Beyond this though is a common thread. Instead of trying to earn more money to pay off their debts, they decide to recreate to take their mind off their troubles. That’s right, they are paying money to play softball, go bowling, or play flag football.
This additional recreation is keeping these families poor. Not only is it costing them money, but it also wastes time that could be used to work extra hours or think of ways to earn money, cut expenses, or build additional knowledge! I have a friend that is constantly putting off his college education because he doesn’t want to stop playing softball. It’s a pretty sad excuse, but he is definitely not the only one making it. General recreation is keeping quite a few people poor. Don’t let your name be on this list.
Are you avoiding these traps and setting your mind on wealth instead?
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.