My wife is a licensed real estate agent. While this isnt a full-time job, she occasionally helps friends and relatives with housing transactions.I often join the house hunting trips and pay close attention. Im always curious to learn what people desire in a house and neighborhood.Most transactions turn out the same. The clients pay top dollar (bidding wars are common) for a shiny, new (or almost new) home in a boring subdivision.The older homes, no matter how great the neighborhood, are dismissed. And no one seems to want a home that needs a little work, even if it could be purchased at discount.The path of least resistance and convenience is a tempting one. However, there is a tradeoff for it too. Typical people make typical choices which end in typical outcomes:Work 40 hours per week, spend your free time in front of the TV and retire to a place with warm weather when youre 67.*Yawn*I encourage you to think about lifes important decisions in a way contrary to the herd. You may just get wealthy while youre at it.SEE ALSO:How changing one tiny habit allowed me to build my wealthTRADE UGLY HOMES FOR BEAUTIFUL MONEYAt 42, my net worth hovers around $1,500,000. The core of my nest egg was built with real estate.At a young age, my wife and I learned that if you are willing to put a little work into an ugly home, there is money to be made in flipping.When we bought our current home 3 years ago, the housing market was already red hot. A For Sale sign would sprout and within 24 hours, the sellers were entertaining multiple offers. Then, we noticed a home in the same area that had been on the market for 40 days.One tour of the home showed us why. The toilet was blue and the fixtures were 1970s style gold. The kitchen was ugly and the grass was dead. The house had been unloved. No one wanted this thing. Except for us.We bought the home for 10% under asking price and went to work on it immediately. The two bedroom, one bathroom home we bought now has four bedrooms and three bathrooms. With less than $100,000 out of pocket into it, our $175,000 home is now worth north of $400,000.Bottom line: I fully admit that my homes were big projects. I sacrificed many Saturdays to home improvement projects. At times, it was stressful and trying. No one wants to live in a construction zone.However, you dont have to gut a home like we did. There are all levels of rehab. You dont have to tear out kitchens or remodel bathrooms. Sometimes, just a new coat of paint or fresh landscaping will do the trick.CAR CRAZINESSI want a new Prius! one of my relatives enthusiastically exclaimed at a recent family gathering.Whats wrong with your current one' I asked.Nothing. Toyota just released a new model and I like the way it looks. Im going to run the numbers to see if I can qualify for a loan. It turned out that she didnt qualify, so no new Prius for my relative, but it was for her own good.Cars have come a long way in the past couple of decades. Their bodies dont rust in 10 years. With oil changes and other, less frequent maintenance, a modern engine will easily go for 200,000 trouble-free miles. The average person puts 12,000 miles a year on a car, so it should last at least 16 years, but in most cases, much longer.Why do we trade them in on average after only 7 years' Perhaps its because most folks dont understand the future value of money.I like to use my own poor decision as an example. I purchased a new, shiny orange Honda Element for about $20,000 way back in 2003. It was my first new car and I was intoxicated by the toxic new car smell. I didnt really need the car, but I liked the styling and versatility. Silly me. The big question is:How much would that $20,000 be worth if I had invested it'Ill assume the money was put into an S&P 500 index fund. This is a wise investment and a good choice for most folks. Heck, Warren Buffett even recommends it.$1 turns into $2.61. My $20,000 would have turned into $52,200. That hurts. I still have that Element, but it it only worth about$4,000 now. I wish I had the other $48,200.The $52,200 is amazing considering one of the greatest economic downturns the modern world has ever seen took place since then. If the Great Recession had never happened, the $50,000 may have been closer to $100,000. And this is only looking back at the last 13 years.Over the next 40-60 years that I have left to live, my $20,000 Element will cost me hundreds of thousands of dollars.Bottom line: Everyone smiles when a friend gets a new car:Nice work Bob, high-five!However, buying a new vehicleis an expensive mistake. Keep your boring old onewell maintained and drive it until the wheels fall off.If you need a car, go for a used one where someone else has taken the depreciation hit. Forget what the Joneses think.My anesthesiologist friend, the Physician on Fire (PoF), drives a Chevy HHR. The PoF makes more money than you and if a car like an HHR is good enough for him, its good enough for you.See the rest of the story at Business Insider
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