When the price is affordable, should we buy it?

When the price is affordable, should we buy it?

When it comes to car, it’s not just the price that matters

You saw that car model you loved a few years ago at a second-hand car listing website. The price comes with a 80% discount over the original price. It’s now affordable and you are sure the bank would approve your car loan. Should you buy it? Well, truth is, there are definitely a very strong reason for a car to drop 80% of its value within a few years. Maybe, just maybe, the repair and maintenance fees forced the owner to part with it for such a low price? So, affordable does NOT mean you should buy it.

When it comes to property, it is not just the discount that matters

It is the same as property! You saw the launching price just 3 years ago. Today, you saw the same development up for sale and it comes with a 20% discount. Looks like a very good deal but just need to remember that you would not be the only one with a 20% discount. Perhaps another 100 buyers would also get this 20% discount. Assuming everyone gets the key at the same time, how sure are you that NONE of these 100 buyers would be selling their home at the same price they bought which is at 20 percent discount or higher?

When it’s about property, the price we buy matters

We think the price is affordable. Have we checked prices of similar properties nearby? Please do not be tricked by all these shouts about RM230,000 or RM400,000 but also to look at the size too. If we know our family is growing, then buying a RM230,000 home but for a small-sized unit is not a good decision. Or even a RM400,000 unit which is said to be right next to some mall or MRT station. Buy what we really need, not buy because of the price alone. It will soon come back to haunt us.

Oh yeah, everything else would be the same as well

If we need a trip to the beach because we love the beach, it does NOT need to be a beach out of Malaysia (when we could fly again). This should be the case even when flights are cheap and affordable and we could afford the flights. We may have saved a few thousands if we had gone to really, really white sandy beaches in one of the islands in Malaysia instead.

The coffee inside a cafe is just RM12 and it’s definitely affordable for us. If we need a coffee, just get a coffee. It does not need to be inside a cafe. if we insist that we wanted Arabica beans only, then it’s possible to buy a bag of roasted Arabica beans of 250gm for RM30 and this 250gm will enable us to make at least 12 big cups of Arabica coffee. By the way, the RM12 per cup of coffee will be easily RM600 if we had gone to the cafe just once per week. That’s RM6,000 per 10 years if the price of coffee in the cafe stays the same…

What if I really earn so much higher than everyone else?

Seriously, if we are able to earn a salary which is far higher than everyone else, the term ‘affordable’ changes tremendously. That car price which we spoke about earlier, it may now be defined as CHEAP, not just affordable. Plus if we do earn so much higher, why bother to look at second-hand car?

When we earn much higher than everyone else, then that small-sized unit can even be our working home (used only during weekdays) and we could even have a chilling home just for the weekends. How about owning condos with nice swimming pools in many different states in Malaysia then? That would also be good as well.

When we earn much higher than everyone else, the RM12 coffee is no longer just affordable. The RM12 may even be spare change to us instead. When that happens, go ahead drink coffee at a different cafe everyday. RM12 x 365 days = RM4,380 and this amount may be huge to many but to someone who’s earning a lot of money, it’s merely nothing…

Happy understanding that even if things seem affordable, it does not mean we should buy it.

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