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Blink 3 of 8 - The 5 AM Club
by Robin Sharma
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Buy This, Not That summary
Sam Dogen
How to Spend Your Way to Wealth and Freedom
20 mins
Brief summary
Buy This, Not That by Sam Dogen is a personal finance book that teaches readers how to save money by making smart purchasing decisions. It offers practical tips and strategies for choosing the best products and services, and avoiding expensive scams and pitfalls.
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Buy This, Not That
Summary of 4 key ideas
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Key idea 1 of 4
Tackle your debts, and avoid the temptations of buy-now-pay-later offers.
Take a moment to think about your monthly income and how you use it. How much are you able to save each month? What are you doing to leverage your income toward achieving financial independence? What is financial independence?
First things first. Sam Dogen defines financial independence as being one of two things: either you have a net worth that’s 20 times greater than your average gross income, or you have sufficient investments to generate enough passive income to cover your expenses. Ideally, you have both.
How soon you become financially independent depends on the work you’re willing to put in, how much you save and invest, and how much risk you’re prepared to take. Again, think about your savings: if you can save 50 percent of your after-tax dollars, that’s the equivalent of one year’s living expenses. Seventy percent gets you two years’ living expenses. And if that’s simply not an option right now? At an absolute minimum, save 20 percent, and you’ll have one year’s living expenses within four years. The wise choice is to save and live frugally in your early years to reap the rewards later.
You need to earn, save, invest, and plan if you’re going to achieve financial freedom. But before we get into how to invest, we first need to tackle a thorny subject: debt.
Many of us get into debt because we try to live a life we simply can’t afford. Buy-now-pay-later offers are around every corner, tempting us to skip the hard work and go straight for the rewards. But giving in to them is a surefire way not to achieve financial independence.
Of course, debt is sometimes unavoidable – there’s a catastrophe, unexpected medical costs, or, as a single parent, your finances are just stretched too thinly. But if you’re serious about your quest for financial freedom, paying down debt must be your top priority.
Where do you start? Credit cards. Average APRs are around 15 percent, but some are as high as 29.99 percent. So pay off your cards immediately, and only use them for rewards and insurance. Never ever carry a balance forward – you’ll just find yourself being ripped off by the credit card companies.
Next, you should tackle your car debt. Your car depreciates in value every month – even if your car loan interest rate is low. Follow “the one-tenth rule for car buying.” That is, don’t spend more than one-tenth of your gross annual income on purchasing a car. After all, driving around in your five-year-old, more-milage-on-the-clock-than-I-care-to-mention hatchback won’t kill you until you can afford to buy your spiffy, new car outright!
Third, get your student loans cleared. If you haven’t yet been to college and would like to pursue a degree, choose a school that’s affordable. That way, you can pay off your loan within four years of graduating.
Finally, think about your mortgage. This is a complex area, which we’ll delve into in the next chapter.
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What is Buy This, Not That about?
Buy This, Not That (2022) is your ultimate guide to achieving financial independence and freedom. It tells you what to buy, how much to spend, and how to make the most of your money.
Buy This, Not That Review
Buy This, Not That by Sam Dogen (2022) is a refreshing and practical guide that helps readers make smarter purchasing decisions. Here's why this book is a worthwhile read:
- With its pertinent insights and eye-opening examples, it empowers readers to make informed choices and avoid common consumer pitfalls.
- By offering efficient strategies and useful tips, the book equips readers to save money, simplify their lives, and prioritize their values.
- The book's ability to engage and entertain through its relatable stories and relatable scenarios prevents it from ever becoming dull or monotonous.
Who should read Buy This, Not That?
- Financial freedom seekers
- Recession-wary worriers looking for security
- Couples craving financial wisdom for a prosperous future
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Buy This, Not That FAQs
What is the main message of Buy This, Not That?
The main message of Buy This, Not That is making smarter spending choices to improve your financial health.
How long does it take to read Buy This, Not That?
The reading time for Buy This, Not That varies, but it's a quick read. The Blinkist summary can be read in just 15 minutes.
Is Buy This, Not That a good book? Is it worth reading?
Buy This, Not That is worth reading for its valuable insights on making wise purchasing decisions. It's a practical guide to improving your financial well-being.
Who is the author of Buy This, Not That?
The author of Buy This, Not That is Sam Dogen.
What to read after Buy This, Not That?
If you're wondering what to read next after Buy This, Not That, here are some recommendations we suggest:
- Your Money or Your Life by Vicki Robin and Joe Dominguez
- The One-Page Financial Plan by Carl Richards
- Getting Good with Money by Jessi Fearon
- Just Keep Buying by Nick Maggiulli
- The Index Card by Helaine Olen and Harold Pollack
- 12 Rules For Life by Jordan B. Peterson
- Outlive by Peter Attia
- Rich Dad, Poor Dad by Robert T. Kiyosaki
- The Power of Instinct by Leslie Zane
- Help Me, I Have No Discipline and Zero Self-Control by Vaughn Carter