Why people often end up buying the wrong thing?

I spent my Labor Day holiday doing the long overdue task of spring cleaning my wardrobe.

How hard can it be? Well, any lady will tell you that this is a labor-intensive plus physically and mentally-draining chore, with lots of surprises and heartbreaks along the way.

It took me almost two days to complete the job, after endless rounds of repeating three tasks:

1. Keep pieces that are still in favor.

To maximize the chances of wearing the good ones, mix and match different pieces to try various combinations and create new outfits. Then take photos to keep a journal of the new looks.

2. Put aside pieces that need some work.

Many pieces need maintenance before they can be back in service, like cleaning or ironing, sewing missing buttons, fixing damages, tailoring to make them fit, etc.

3. Throw away pieces that will never wear again.

They are pieces that haven’t been worn for the past two years. Some are old clothes that have seen better days and are now ready for retirement. Others are simply not in the trend now.

For new clothes that are used just once or even brand new, the strong feelings of guilt and regret come every time I decide to dispose them.

There are three common reasons why I end up buying the wrong thing:

1. Buying on a whim

It looks nice in the catalog and fashion magazine. Or I can imagine myself looking fabulous in it the same way it is displaying in the boutique. It is the fashion trend now and I just don’t want to be lagged behind.

2. Buying under pressure

There is peer pressure when a shopping companion tells me that it looks nice on me. A few times I fall into the trap of a flattery salesman who is full of praise when I step out of the fitting room.

3. Buying for the future

It is tempting to buy now and save it for a future occasion. And I am not the only lady who tries to buy clothes one size smaller, thinking that one day I can fit in. But somehow that day never comes.

Who are the third parties reaping the benefits from my silly mistakes? They are my domestic helper and my elder girl who turns ten next month. They are excited by this treasure hunt game to find gems from the pile of my discarded clothes. With the ‘new’ clothes in their arms, they smile triumphantly and ask “any more mom (ma’am)?”.


Property spring cleaning

During the past property doldrums, many investors had to deal with the long overdue task of spring cleaning their property portfolio.

How painful is the process? Well, any owner selling at a loss can tell you that this is a time-consuming and heart-wrenching chore, with lots of headaches and disappointments along the way.

It can take months or even a year to decide what to do, though it won’t go beyond three steps:

1. Keep the properties that still have holding power.

They are the good quality properties that still have positive cashflow during bad times. Measures are taken to minimize costs and maximize returns, such as refinancing for lower interest rate, renting rooms rather than the whole unit, etc.

2. Fix the properties that need some work.

In a soft rental market, no one will take up a place that needs repair. To secure good tenants in a competitive market, it’s time to touch-up old apartments and renovate rundown houses.

3. Dump the properties that are underperformed.

Properties that have negative rental return make little business sense for owners to subsidize tenants to stay there. Similarly, properties that are bought wrongly have to cut loss in time before their values drop further.

There are three common reasons why investors end up buying the wrong thing:

1. Buying on a whim

The project looks nice in the advertisement and the showflat. It is a Singapore dream come true to imagine yourself owning the property the same way the celebrity enjoying his lifestyle in the TV ad. Everyone is buying now and you can’t afford to lose out in the property game.

2. Buying under pressure

All your friends, colleagues and relatives stay in a condo. It is such an embarrassment telling people that you are putting up in an HDB flat. Noises from every direction tell you to go for it. And you find it very difficult to say ‘no’ to that persuasive property agent.

3. Buying for the future

It is tempting to buy now and pay later. Buying a project still under construction means that you only have to pay years from now. By then you will have enough savings and a higher salary to support that pricey property. But somehow the down cycle comes earlier than what you can imagine and everything just go out of control.

Who are the third parties reaping the benefits from your silly mistakes? They are the bargain hunters or value investors who have been waiting for this day to come. They are excited by you cutting loss and are busy finding gems among the bulk of fire sales. With the ‘new’ properties in their arms, they smile triumphantly and hope there are more to come.


Lessons learned

1. The most terrible feeling is the realization that you have spent a lot of money buying the wrong thing.

2. Good taste and good insight often have nothing to do with money. Having money and knowing how to pick the good stuff are two different things.

3. Resist the temptation to buy the thing on the day you first see it. Put it on hold for a few days. You can minimize the chance of regretting it later.

4. Buy only what fits you (or your budget) now, not what is going to fit you in the future.

5. Being picky doesn’t pay. Buy only what is good enough for you, and the fewer, the better.

6. You can’t make choices based on what everyone say is good. Don’t imitate others. Don’t follow the trend. Find your own style.