Retail therapy is the stupidest kind of therapy because it’s the most expensive therapy on the planet.
It’s so expensive because it ignores opportunity costs.
No really – retail therapy is so expensive you are going to choke when I explain this.
Set the stage with me:
You don’t need a new purse, you want a new purse – for example.
For men, it might be a new electric gadget.
Whatever it is, you spend $300 on it.
You work hard, you have a good job, your bills are all paid, and everything is great.
You deserve this little treat – and besides – it’s only $300.
Right? Wrong.
Wrong because the opportunity cost is you could have invested that $300 at a 10-percent return.
Say you are 40 and live to 80, to buy that $300 purse, you gave up $30 per year in forgone income which comes out to $1,200.
$300 cost + $1,200 opportunity cost = $1,500
And that’s if you didn’t reinvest the income!
Reinvesting the income would have given you $13,577!
You threw away nearly $14,000 on an impulse buy that you didn’t even need.
Let’s not even get into what the compounding numbers look like if you pass your investments on to your children. đź«
All that to say: Quit ignoring the trade-offs you are making.
Trade-offs are real and often large.
Retail therapy is just an incredibly expensive dopamine hit.
Grow up.
Grow up and get a real therapist – like the rest of us.
