Are you impulsive? If you are in business for the quick buck then maybe you need to take a step back. Starting and growing a new business requires time, care, and money. So here’s the million dollar question. If your new business takes off and you make $30,000 in short notice do you buy a new car, use the money towards your house payment, or put the money back into your business? The obvious choice for many people is to upgrade their status symbol, their car. Nice cars are certainly fun to have and they let others know that you are successful, but is it worth having a nice car if you don’t have any money left to put into your business?

Many people are quick to spend their hard earned cash on things that depreciate in value. In order to fit into society as a successful businessman it is assumed that you will own a Mercedes, have a big house, watch movies in your custom home theater room, and of course take expensive vacations a few times a year. These things can be signs of success, but they can also be signs of stupidity.

For example, most people will easily pay double what their house is worth after they finish paying off their mortgage. With 50 year mortgages now available people will end up paying more than double the value of their house. If you have the option to put your money to work for you, you won’t have to work for your money. Pay off your house. Reinvest your money into your business. Buy stocks. Honestly a nice car and expensive vacations might seem fun for a while but why not wait until you have the cash available to make such purchases?

Buying a car through payments and putting vacations on credit cards are very dumb things to do. In the long run if you can have self control with your money and stop being an impulsive person in general you will find that you will have saved more money in the long run. If your house costs $300,000 and you are going to end up paying close to $600,000 total after your 50 year mortgage, do you realize that you’ve just spent $300,000 too much? My theory goes for expensive houses too. I recommend buying a house that will work for you and using your extra money to invest in stocks, your business, and of course your house payment. By the time you have paid off the house it will most likely have increased significantly in value. The less money you have to put into your liabilities, the more money you will have available to purchase assets.