When it comes to spending money I follow one very important rule. I call it the Rule of 3. This rule can save you from making plenty of finical mistakes.
What is the Rule of 3?
The Rule of 3 is a simple rule that I apply to spending money. If I can’t afford to buy 3 of something at one time, I won’t buy it, no matter what. There is a psychological reason behind this rule. When I purchase something that’s within my means, I’m comfortable having/using it. But when I buy something out of my means, I don’t feel comfortable having/using it. I freak out about it because I know that if something happens to it I won’t be able to get another one.
Breaking the Rule for an iPhone 10!
For example, when the iPhone 10 came out, a buddy of mine peer-pressured me into buying one. By enticing me with the idea that I could quickly flip it for $200-300 more than it cost retail, which was around $1,000, because there were a lot of claims that Apple didn’t have enough supply for the demand (which turned out to be false, Apple had enough phones in stock).
The second I bought the phone, I felt like a “Baller,” but after I walked ou oft the store, I was freaking out. I was walking around with $1,000 in a bag. What if someone snatched the bag from me? What if the phone got cracked (I usually don’t buy insurance)? I was feeling very paranoid having this phone on me. If something happened to it, it would’ve taken me at least two months to save that money back up. I wanted to return it that night!
Fast forward five days later, I wasn’t able to sell the phone for a profit. So my buddy just bought it from me for retail price. If I hadn’t broken the Rule of 3, it would have save me from all that paranoia.
If you apply the Rule of 3 to most of your spending decisions, I promise that it will help you build real financial wealth.
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