Have you ever heard of an Indian monkey trap? It’s a device with a hole barely large enough for a monkey to stick its hand in. You put a banana in the trap and the monkey reaches in to grab it. The monkey finds out that with its hand wrapped around the food, it can no longer remove it from the trap. The monkey is too stubborn or lacks the intelligence to let go of the food. Because it won’t let go, it is trapped and loses everything.
While you may think the monkey is acting ridiculous, I see the same behavior just about every. single. day. with the hairless, upright primates known as humans. A perfect example lives lived across the street from us. I’ll call my ex-neighbor Carol.
When we moved in, I noticed that Carol had a brand spanking new Audi A6 in her driveway. I’m a car guy, so I chatted her up:
- Me: Whoah, Carol, pretty nice ride you have.
- Carol <with great enthusiasm>: Oh my Audi, yeaaaaaah!!
- Me: Looks pretty good in the black!
- Carol: Yes, I love it. I’ve dreamed about owning one for years. It is my pride and joy!
I felt a bit sorry for Carol. Her life seemed to revolve around this 4 wheeled object. I let it go and took the high road, assuming that she was probably making a decent buck and was able to afford this $50,000 car. What a dumb assumption!
The trouble started a couple months later when I noticed Carol’s utility trailer was gone. Since she was kind enough to let us borrow it and it was very useful, I asked about it:
- Me: Hey Carol, what happened to your trailer?
- Carol: I hit a financial road bump, so I traded it for rent this month.
Hmmm, cracks were forming. She still had the Audi though.
Things seemed to be getting even worse for Carol in June. I learned that she had asked another neighbor who was moving if she could have (not buy, just have) his lawnmower. She explained to him that hers was broken and she couldn’t afford to get it fixed.
More cracks. She still had the Audi though.
Things came to a head for Carol at the end of July. She was no longer able to afford the rent on her place, so she had to move out.
Very big cracks now. Audi was still in the driveway though.
Carol’s story may be an extreme example, but not an uncommon one. People fall into money traps every day in the form of expensive cars, super-sized homes or by an insatiable thirst for $1,000 purses. It’s a bit sad and very shortsighted.
If you’re not careful, you too can fall into a Money Trap. Just look at what happened when our friend Sac (stupid American consumer) went car shopping.
Frugalsaurus couldn’t help our friend Sac resist the siren call of the Money Trap disguised as a sweet Alfa Romeo 8C*. I couldn’t save my neighbor’s life from being turned upside down by an Audi. However, you can learn from these cautionary tales. When tempted by some purchase you know deep down is ridiculous, think of the long term ramifications. That new car or boat may look pretty sweet, but how much of future you are you sacrificing?
*I’m a sucker for beautiful cars. However, I’m happy that I have nothing fancier than a bright orange Honda Element (the exact opposite of a beautiful car) with 130,000 miles sitting in my driveway. (Mrs. 1500 note: You could probably pay off the debt of entire countries with what he has invested in toy cars, though.)
Hey 1500,
I see this kind of money trap all the time. I wanted to share a short story of one of my close friends and his recent blunder. My Friend (Mr. Peckham) decides to move from a 2 bedroom apt. to a 3 bedroom apt. The new apartment is $450 more in rent each month but it comes with a modern look and extra bedroom. However the rent is now $1050. I also want to mention his girlfriend convinced him they needed to move… 3 months later they are broken up and Mr. Peckham needs to borrow $330 to pay for fines. I lend him the dough and now he has been sleeping in his car. GF moves back home to her rich family and leaves BF with his tail between his legs. Let’s not mention one child (1 year old) with another one on the way. I just shake my head.
Brian @ dividendmongrel recently posted…I Got Nominated … Be Very Affraid!
Whoah! Not good. This guy needs an intervention. That girlfriend sounded like she was no good. Hopefully, the stay separated.
It really is amazing what people prioritize for in life. I used to be that way a little bit, wanting to save all my money in order to upgrade my car to something sportier. Then I got married and realized how many more important things there are to do with money.
FI Pilgrim recently posted…July In Review – Income/Expense and Net Worth
Good for you! We all do silly things sometimes. Even MMM had a sports car and sportbike at one time. Realizing these errors and changing direction while young is a very, very powerful thing.
It really just boils down to “delayed gratification”, you either get it or you don’t. Love the “Future You” comment.
Yep, most people never ever consider future you. Too bad. I have the opposite issue. I live too much in future me.
I don’t know if i totally agree with that. I learned some very bad habits with family / ex-wife early in my 20’s. It didn’t take too many years of “wtf am I doing” to realize the error of my ways. Chalk it up to bad rolemodels and wanting to please the un-pleaseable. Thankfully I had the large salary to quickly correct my mistakes and am in a really good place right now.
Now if your 35 and still doing the same stupid stuff (or even 40, 50, 60) well i have no pity for how you end up. I personally don’t like to touch the same fire twice but that’s just me 🙂
Well, can’t say we haven’t been swayed by a beautiful yellow car lately, but at least the price of ours was a lot closer to the micro-machine alfa romeo there than the real thing.
I think a lot of times it comes back to the “I deserve this” or “I am an alfa-romeo person, not a honda person” mentalities and those are dangerous to adopt.
Mrs. Pop @ Planting Our Pennies recently posted…How To Plan A Major DIY Renovation
Ha, people pay more for Apple computers than you paid for that car. Carol could learn a thing or two from the PoPs…
What an interesting and well-presented article. Like Carol…I have a bit of a $weet tooth for German autos. Thankfully, I’ve seen the error in my ways and have come to this realization: The thought/dream of owning luxury items is almost always better the the actuality of obtaining them. The shine and novelty wear off. I picture Carol’s Audi either repossessed or dented/dinged sitting outside her new residence ( perhaps at her parents?) Once again, Mr. 1500…great job. As you zero in on the “two comma club” ( 1 Mil)…the more important thing is that you’ve learning to avoid the trappings that will steal your stash of cash.
I was thinking the same thing. I’m pretty sure Carol is now living in a seedy apartment. The Audi will now sit in a parking lot next to 20 year old Cavaliers and Oldsmobiles.
1500,
Too bad about your neighbor. Must have been a lease since she held on to it. Those are a terrible trap. Love the Cars R Us pictures!
-RBD
Retire Before Dad recently posted…That’s The Way I Want To Go
Let me know if you’re in the market for a Mustang, Alfa Romeo or Mini. Sleazy Sales Saursus will cut you a deal.
Haha, I think we all can relate to a friend or family member who does this. I have a neighbor that keeps leasing expensive cars because he can’t afford to buy…..but wouldn’t be caught dead driving anything but the newest import.
Even more amusing, I used to work with the son of a doctor. We were engineers and made good money, but his dad still bought him a lot of toys. He drove a brand new BMW M3 and wore designer clothes everywhere……but lived in a $500 per month apartment. (No he wasn’t a drug dealer, but I could see why you would think so.) So finally I asked what gives. Apparently, his dad drew the line at buying him a house. Poor baby 🙂
-Bryan
Income Surfer recently posted…Do You Predict Future Profits?
Whoah, an 3 is quite the toy. His dad should have drawn the line at a used Toyota. No matter how much money I have, no handouts for my children.
Those are pretty awesome toy cars though! The “I deserve this” feeling like Mrs. PoP talked about is something I struggle with every day. I’ve had it in check for quite a while now, but I have a feeling it will never really go away :-(. What matters is how I handle it
Retired by 40 recently posted…July & August Goals
I struggle too. Despite my rant, I’ve like a fancy pants Acura NSX. An old used one will still cost $35,000. It is ridiculous, but I’ve come to terms with it. Like you, I may never be able to suppress the desire, but as long as I don’t act on it (at least before FI), it’s all good.
Some people just have a skewed view of what should be priority in their lives. Some of them, or should I say us because I was there once, care more about how we look in a nice car than how our finances look.
I like the home-made American Money Trap. I’ve been trapped in one of those trying to get to the last chip.
Aldo @ Million Dollar Ninja recently posted…Is It Better to Buy or Rent?
Ha! I haven’t bought Pringles in years. I should have given Kevin Smith some credit for the photo.
This article was hilarious!… and also a little sad for the neighbor, but there is nothing you could do.
I think now whenever I see something like a nice motorcycle or car I want I’ll have to say to myself “Don’t be a SACer, don’t be a SACer!”
Old School recently posted…DIY: Is it worth it?
Ha, maybe I’ll coin a new phrase?
Those are some amazing dino-ramas. I’m in awe, really. And the Pringles can trap is inspired.
As others have said, the “I deserve it” mentality is such a dangerous gateway drug to lifestyle inflation, or even just lifestyle creep. This idea that as you advance, or age, you are simply too old/too wealthy to subject yourself to an inexpensive car, public transit, the list goes on. It’s terrifying that your neighbor would prioritize a toy over her home–I wonder if it was a truly conscious decision on her part or just sheer neglect/ignorance of her finances?
Mrs. Frugalwoods recently posted…Frugal Hound Sniffs: The Barefoot Budgeter
Oooh, the Frugalsaurus is planning all kinds of stuff with his friends. The next couple weeks will be interesting.
“I wonder if it was a truly conscious decision on her part or just sheer neglect/ignorance of her finances?”
I think she is completely ignorant. She needs some wise guidance from a friend.
Even worse for Carol, chances are she didn’t put much down on the Audi up front and was fully leveraged so the car was likely upside down. If she was living on that tight of a budget, she probably couldn’t come up with the cash to pay off the loan if she sold the car. Just speculating, but it’s entirely possible 🙁
Up here, I very rarely see a sports car. Instead it’s these ridiculous Ford Raptors with extra loud exhaust and every option imaginable rolling down the road.
My friend once mentioned that his favorite pickup was the Raptor. I then asked him if he had any idea how much they cost. He didn’t. Thankfully when I told him how much they were, he doesn’t want one as much anymore.
Big Guy Money recently posted…Free Your Mind: You Don’t Need Someone Else’s Program
Bleh, we’re in Colorado so we have the same issue with pickups. Don’t you know that everyone needs a $50,000 pickup for pizza, beer and grocery runs?
One first has to come to terms with themselves and accept to live life as who they truly are, not defined by who we imagine others or things think we should live. Deep down, I’m sure your neighbour is trying to please someone through something (an Audi A6 in this case).
Kapitalust recently posted…The Investment Policy Statement
Right on Kapitalust. Wise, wise words. This is brilliant:
One first has to come to terms with themselves and accept to live life as who they truly are, not defined by who we imagine others or things think we should live.
Too many learn this lesson too late if ever.
I was one of those people making poor decisions a few years back I bought a nice little Mercedes. After the payment, insurance, upkeep, maintenance, and my future wife glaring at me, I sold it, still ranks as my top 3 financial decisions I have made. I now take a bus/train and pay $80 month total.
Even Steven recently posted…The Great Coffee Debate and Little Wins
Nice work with the bus/train. Chicago has a great system.
I love the A6. So much so that when I reach financial independence I might allow myself to buy a used one with under 200,000 miles on it.
Chattanooga Cheapster recently posted…Are CSAs Worth It???
I like it too, but my sentiments echo yours. I will only have a nice vehicle after my finances are in order.
Once again, I love the pictures and the message. Indian Monkey Trap…didn’t know what that was, I learn something new every time I’m here! I know many people who fall into this trap…it’s really sad that their lives revolve around material items. Is this the same neighbor you’ve mentioned before with a daughter who is the same way and is financial trouble?
Andrew@LivingRichCheaply recently posted…The Top Ways Your Home is Costing You Money
Thanks for the kind words Andrew, much appreciated!
This is a different person. The other neighbor is long gone.
Haha…I love these stories you do with the toys.
I have to admit, even though I know better, I still get caught in the monkey trap once in a while. I have two designer handbags that I bought a few years ago. I bought them used for a steal. I used them and enjoyed them for a while, but then my habits changed. They just sat in my closet looking pretty. Even used, they are worth 2 to 3 times what I paid, but I couldn’t bear to sell them! Knowing that I couldn’t afford to replace them kept me holding on even though I needed the money more than I needed the bags. I finally bit the bullet and now they are on eBay with two bids so far and over 30 watchers. They will make up for a nice chunk of the $680 check we just sent out to file for my husband’s citizenship.
Jen @ Jen Spends recently posted…7 ways to stretch your back to school clothes budget
Hey, don’t be so hard on yourself. I’m sure you didn’t pay $1000 or even $500 or even $250, so it won’t kill you. As long as you don’t have 50 of them stowed away. THAT would be bad.
Congratulations on his citizenship! I’d like to celebrate with one of his beers someday!
In June we ended up having to buy a new car because I finally had to retire mine as the transmission was about to go and the car was barely worth anything at that point. While we were talking to one of the salespeople, he started trying to talk our price up but offering us a 6 or 7 year term and talking about how a $500 car payment is normal now and it should just be viewed as “just another line on the budget”. It is amazing how debt is viewed as commonplace and people are willing to up their price limit just because they are offered more money and a longer term in financing.
Thias @WealthHike recently posted…Side Hustle Series #1: Pact
Oh man, 7 years and a $500 car payment is a nightmare. An old Honda Accord that I owned was my favorite car. It cost me $2400 and lasted for 100,000 miles. Actually, it was still fine at 230,000 miles; I just didn’t need it.
I think cars are probably the biggest mistake people make actually. I think they are worse than houses for a couple reasons: 1) At least a house has a chance of appreciating. 2) Most people don’t drive their cars into the ground like they should. I know folks who trade perfectly good cars in every 3 years. Sigh. Finance, sell, repeat.
Ugh. I recently overheard a co-worker say she was looking at buying a new SUV because she “deserves” it. Everyone knows her husband’s contracting business is having some trouble.. unfortunately I predict that this, too, will not end well.
Whoah. I can’t stand the phrase, “I deserve it.” The people who actually do deserve it (like someone who has been caring for a sick spouse for a decade) never utter that phrase.
It is kind of a sad story… as others have mentioned it could have been a lease or an upside down loan, but still, to put yourself in that position where you are basically losing everything to hold onto a car is painful. I hope I know when to let go of a banana!
Kipp recently posted…Valuing Your Time
It is painful to watch. The car was only part of the problem too. This single woman rented a 2000 square foot home. She filled it with crap. It took her a solid week to move out.
Very nice!
When I was more of a low income landlord, I saw this often. Renters bring stuff to the pawn shop, only to attempt to get it out later. not enough money to pay rent, but enough to buy rims.
Since people do not have money in the bank, they opt for ‘stuff”. It’s the stuff that makes them happy.
No Nonsense Landlord recently posted…The Best Way to Pay off A Mortgage
“Since people do not have money in the bank, they opt for ‘stuff”. It’s the stuff that makes them happy.”
Wow, what a sad and unfulfilling way to live. This is horrible, but it seems to be the way of most people.
A friend who is a landlord had a tenant ask if they could be a couple of weeks late with the rent because they wanted to spend the money on fireworks. There’s a penalty for paying the rent late, but spending $400-500 you can’t afford is apparently the new American way.
I used to help parents both mine and husband’s by spending thousands of dollars each year. Finally, I learned that people are poor for a reason, therefore, I can’t do anything about it. Stopping monetary support means sabotaging our relationship–I spoiled them for so long but I had to do it, otherwise it would eat me alive. What they need is a bigger brain, not my money. Thanks for the story, love your blog.
Young-
I’m sorry to hear about this situation. I hope everything came out OK.
Also, thank you for the kind comments. Much appreciated!
I drive an awesome $90k twin turbo Mercedes which I enjoy thoroughly every day but guess what? Household income over $400k and I own my own business, net worth over $3m and growing fast, only debt is a small tax deductible mortgage on a rental property and life is good. Could retire now in our 40’s but have no desire to since we both like what we do.
There ARE some of us who can afford our dream cars or other luxuries without derailing our ff plans.
Um….ok.