It’s only a couple of weeks since I told you about a new way to measure wealth, and here is an article on a respected blog telling you how to go about renting ‘stuff’ that you might need, so that you can appear wealthy!
Now it might surprise you, unless you’ve read my original post, that I think the best ‘bang for buck’ way to be wealthy is to be Rent Wealthy …
… this is where, instead of owning that villa in France, you rent it. Instead of owning that luxury yacht, you charter it (with crew and caviar, of course. After all, you are wealthy!). And, instead of owning that expensive personal jet, you call up Warren Buffett’s company, Net Jets, and charter one (no maintenance or holding costs, either!).
And, the Get Rich Slowly article says that you can now:
… rent designer bags, sunglasses, and jewelry. Yep, companies like Avelle, Bling Yourself, and Wear Today, Gone Tomorrow will rent merchandise by the likes of Chanel, Hermès, Louis Vuitton, Prada, Chloé, Herve Leger, and more. For a monthly fee, you can carry the “it” bag.
One site, for example, will rent a vintage Birkin bag for $600 per week. The cost to buy a vintage Birkin is about $17,000 (I’ll give you a moment to stop choking…mmkay, better now?). A Coach bag that retails for $350 can be rented for about $30 a week, or $20 per week if you keep it for a month.
As the author points out, you can actually own the Coach bag in 4-and-a-half months, so renting would seem pretty stupid when you can just save up for one or two nice handbags and use those throughout the next year or so.
But that’s not the point: renting, financing, or even buying this sort of consumer item with cash is likely to be sudden death for your personal financial well-being (remember The 5% Rule for your personal possessions, including your car?!) …
… unless, of course, you are already rich!
And, that’s where I disagree with the author: I am not comparing the cost of purchasing the $350 Coach bag against renting it … I’m comparing owning, say, 12 of them (after all, what rich person can get by on just two changes of purse in a year? Ask Paris Hilton … ) against renting 12 to 24 of them – one or two per month!
And, you don’t have to worry about them taking up space in your closet – collecting dust – after you have already been seen in public with them …
Clearly, renting is a ‘no brainer’ 🙂
That’s why I like being Rent Wealthy; I can have pretty much whatever I want [AJC: within reason, and remembering my 10-1-1-1-1 spending thresholds to make sure it’s something I really want or need] without any albatrosses around my neck.
Once you reach your Number, and if you are rich enough, try being Rent Wealthy for a while … I think you’ll like it 😉
merry Christmas to you and yours. Please keep your thoughts and ideas posted as they are a great resource. All the best.
@ Ill Liquidity – Ditto … rest assured that (except for a day or two here or there) I’ll keep posting … making money doesn’t take vacations 😉
You know, the rent versus own model is “common sense” when you talk about larger items.
It is why I don’t believe I should buy a summer retreat (especially right now when I would never be able (or want) to spend even five weekends a year at it).
Merry Christmas to all
If I had to generalise, I would suggest that the frequency of use is more likely to be the determining factor rather than size if you look at it in terms of relative value.
Renting items usually makes a lot of sense in cases where the item will not get a lot of use: holiday homes, scuba gear are good examples.
For something that gets a lot of use, like a home or a car that you use daily, owning usually works out better.
I use the word “usually” because there may well be exceptions: try telling your fiancee that it is better to rent a bridal dress than to buy one and you will find out pretty quickly that it is not always about money.
@ Trainee – you are right in saying that “there may well be exceptions”: in the USA I rented a new luxury Audi on a daily rate for 2 years! Naturally, I had negotiated an outstanding deal for reasons that I cannot go into here 😉
What happened? Have you stopped blogging? Or have I been placed on some black list? I haven’t received an email from you since around Dec.23rd.