If someone broke into your house and stole hundreds of dollars each year you’d want to catch them right? You would want to stop them as soon as possible. There are thieves we live with and tolerate.
The term ‘vampire energy’ refers to anything that is wasting electricity while you’re not actively using it. Just like vampires these things are active at night and suck your blood… I mean money (to the tune of 3 billion dollars a year in the USA). From this info-graphic the biggest culprits are plasma screen TVs, video game consoles, inactive computers/laptops, and VCRs.
How to Stop It: Make sure buy electronics that turn completely off and use a power strip to turn off everything completely. Graphic Source
Holding on to Old Stuff
How does holding on to old stuff sap your wealth? Well, stuff you aren’t using is tying up valuable cash. This cash could be worth a lot in the future, especially if you consider compound interest. Read more in this post about how much is a $100 in the future… you’ll be surprised. In 50 years a $100 could be worth 28,900 at a 12% ROI. In addition, stuff has a way of multiplying until it fills all available space. Some us have grown up never throw anything away and saving everything, from the mundane to the ridiculous. I’ve never understood storage sheds because they seem like such a rip off. If you don’t use your stuff often enough that it can sit in a storage shed its time to get rid of that junk.
How to Stop It: Break the habit of buying stuff and sell stuff you haven’t used in 12 months.
Interest on Debt
This silent killer works while you’re sleeping, on vacation, sick, and working. It works all the time no matter what. Try to avoid interest at all cost. You may be surprised to see how much interest you pay on different APRs each month.
How to Stop It: Rapidly pay off your credit card debt and switch to an all cash lifestyle.
Buying Brand New
The two things that come to mind here are brand new gadgets (technology) and buying brand new cars. These two things can take wealth from you quicker than you can say ‘iphone price drop’. Stay off the bleeding edge of technology and buy when a product is in its maturity phase, not while it’s in the early adoption phase.
If you’ve done your research you can negotiate on your next car purchase. They say the second you drive off the lot your new car losses 30% of its value. Some cars are more likely to depreciate than others. Typically the more deluxe cars depreciate quicker.
How to Stop It: Buy with cash and do your research. Find deals on craigslist and other classifieds for medium ticket items.
Inflation – The Hidden Tax
If you don’t protect yourself from inflation you will be in trouble when you retire. Inflation eats away at your wealth by deteriorating the value of the cash you hold. Because the government has a printing press they can print out as much money as they want. When they do this it ‘waters down the cool-aid’. When the cool-aid is too watery it’s pretty well worthless to everyone. On average you want to have a return on investment of at least 3% or higher each year just to stay above inflation. Cash in a high interest savings account just won’t cut it anymore.
How to Stop It: Buy stock in companies that are inflation resistant (i.e. they can raise their prices when they need to). Try to own real assets with real value (e.g. land, gold, property, rentals).
If you’re talking about hyperinflation that’s a whole different story.