Personal Financeblowbackphoto from Getty Images Signature and FRIMU EUGEN from frimufilmsJoey FrenetteThis post may contain links from our sponsors and affiliates, and Flywheel Publishing may receivecompensation for actions taken through them. It’s nice to splurge on the things we’ve always wanted while we’re still young. And while I’m certainly not against spending money on the things that bring one joy, I do think that delayed gratification is one of the most underrated and unappreciated skills one can develop at a young age.Indeed, it’s far better to learn how to delay gratification earlier on in life rather than later on. The opportunity costs of an extravagant purchase in one’s early 20s are high. For instance, buying a fancy car at such an age could take a great deal away from one’s future retirement fund. And for the many young people who just don’t see a need to ever retire (perhaps they love their careers), it still takes away from their financial freedom.In this piece, we’ll look at a young individual who posted on Reddit about how it’s great to have a paid-off Tesla (NASDAQ:TSLA) electric vehicle (EV) along with $11,000 in their 401k, a fairly respectable amount for someone who’s still college-aged! Of course, given how pricey Teslas are, that 401k could have been four times, even more than five times larger. Of course, if it’s your dream to get behind the driver’s seat of the latest and greatest Model 3 or Cybertruck, you should certainly save up for the purchase if it fits in the budget.
It feels great to be able to splurge and save up. But should one prioritize saving and investing earlier on over lavish big-ticket buys?
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You’re never too young to start saving and investing!However, for someone who’s just getting started in their investment journey (they could be four, even five decades away from retirement), I’d argue that it’s a financial mistake to get a Tesla as a first car. Indeed, there are cheaper ways to get some point A to point B, and they don’t entail taking away several thousand from your 401k at such a young age. Though there’s no sense in regretting such a purchase now that it’s been made, I do think that the thrill factor from such big-ticket buys will fade very quickly.Indeed, if you’ve purchased a new car and drove it off the lot, the depreciation in value can be nearly palpable. New cars, especially fancy ones, tend to be a terrible purchase for the long haul, especially for someone who should strive to gain a bigger headstart on their financial journey. Not to rain on the young Tesla owners’ parade, but I do think the individual m