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Money Magazine: 25 Rules to Grow Rich By, Part 5

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We’ve finally come to the last installment of Money Magazine’s 25 Rules to Grow Rich By, which has a catchy title, but is more or less just a list of “rules of thumb” that may or may not be applicable to any one individual. And let’s face it, you are all individuals. (Yes, we are all individuals!) 1 Now without futher ado, here are the final five.

21. Lease a new car or truck only if you plan to replace it within two or three years. Usually, the rule of thumb dictates never leasing, so this is an interesting conditional. There are some situations where you know you won’t need a car a few years into the future. For example, maybe you’re moving to a city with decent public transportation and no need for a vehicle, like New York, or maybe you’re only in the United States for a few years before heading back to Europe. I can understand leasing in these situations. You have no intention to keep the car, and you have low monthly payments.

22. Resist the urge to buy the latest computer or other gadget as soon as it comes out. Wait three months and the price will be lower. Ah, the curse of the “early adopter.” I’m exposed to this first-hand as I attempt to find a new notebook computer. I want something that will last five years as my previous notebook did, and I’m trying to get excellent features like abundant RAM, WUXGA resolution, and a speedy processor, but it’s not quite fitting my “budget.” I’ll probably end up settling for something less powerful, and therefore less likely to last five years.

23. Buy airline tickets early because the cheapest fares are snapped up first. Most seats go on sale 11 months in advance. It’s like Money Magazine is reading my mind. I’m working on airline tickets to California in November. I should have purchased the tickets before Labor Day, but here we are. I’ll end up spending about $450.

24. Don’t redeem frequent flier miles unless you can get more than a dollar’s worth of air fare or other stuff for every 100 miles you spend. If I fly Continental Airlines on my trip to California, I should pass the threshhold of 25,000 miles, which should earn me a free flight. Here’s their chart for flights within the U.S. According to this rule of thumb, if the flight would normally cost $250 or more, than using 25,000 miles would be worth it. When I redeem the miles, I will undoubtedly be limited to a select number of flights.

25. When you shop for electronics, don’t pay for an extended warranty. One exception: It’s a laptop and the warranty is from the manufacturer. I usually don’t go for the extended warranty on anything, including laptops. The standard manufacturer’s warranty should be sufficient. Any problem I’ve had waith a laptop occured early on in its life. Extended warranties are usually nothing but bonuses for salespeople.

When I was in high school, I worked at RadioShack for a short time. We were told to push the “TSPs” — Tandy Service Plans. There was a code on all price tags that allowed the salespeople to know the price of the TSP without having to look up the details. When we sold a TSP, we would get a small bonus in our paychecks.

For smaller items, the TSP would function as a “replacement plan:” for an extra $9.99, that pair of headphones can be returned at any time — forever — and be replaced with a new pair, for any reason. This isn’t a bad deal, as long as customers remember to come in, and keep their receipt.

Nowadays, the only time I go into RadioShack is when I need A/V connectors. I try to avoid the salespeople as much as possible.

1. I hope that there is at least one person familiar with Monty Python’s Life of Brian.

Published or updated October 30, 2006. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

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{ 3 comments… read them below or add one }

avatar J.D. @ Get Rich Slowly

I’ve been following this series with intereset, Flexo. You’ve done a good job. I had a lot of readers forward this article to me. You did a better job with it than I would have.

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avatar Luke Landes ♦127,535 (Platinum)

Thanks, J.D. It may take me a while to finish series that I start, though.

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avatar ThomasB

Love “life of Brian” , are you refering to”com’on aggle wif me”?
Ps love this series.

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