Steve Adcock retired from his corporate job in 2016 at age 35 having saved about $900,000. Soon after, with the help of an upward-trending stock market, he and his wife pushed their net worth over the $1 million mark.
These days, Adcock publishes his Millionaire Habits newsletter as part of an effort to lead people to financial independence and early retirement the way he got there: by succeeding professionally, investing wisely and living frugally.
Even though his net worth contains two commas, Adcock still considers himself frugal. To him, that doesn’t necessarily mean spending as little money as possible. Rather, it means spending smartly on things you know will add value to your life.
“That’s the difference between being cheap and being frugal,” he says.
Here are three things Adcock refuses to spend money on.
1. Lottery tickets and gambling
You won’t find Adcock daydreaming about the Mega Millions jackpot, because he won’t be in the running.
“I never played the lottery ever, and I refuse to buy a lottery ticket,” he says. “You hear the same thing. ‘You can’t win if you don’t play.’ But let’s face it — even if you play you’re not going to win.”
Statistically speaking, Adcock is right. Your odds of hitting the Powerball, for instance, are 1 in 292.2 million.
Your chances are better when it comes to conventional gambling, such as betting on sports or playing at the casino, but Adcock isn’t a fan of that, either. “I don’t gamble. I never gamble. There are people who probably make money gambling, but I would never bet a dime,” he says.
Any money that he would consider gambling with? “I’d rather just save it and invest it instead,” he says.
2. Extended warranties
Adcock won’t allow himself to be upsold into an extended warranty — a common offer for household appliances and electronics sold at big box stores. “You’re probably not going to use it. It’s just additional profit for the store,” he says.
If you do buy the warranty and your product breaks, there’s no guarantee that the repair will be fully covered, he adds. “You could still end up spending more for the warranty than what you get out of it.”
Instead of springing for the policy, Adcock relies on his emergency fund for any unexpected repairs.
“You can put a little money aside every month, and essentially you’re building your own extended warranty,” he says. When an item breaks, you have the money saved to repair or replace it. If it lasts forever, you have the money to put toward other expenses.
3. The cheapest product… or the most expensive one
When shopping for just about anything, Adcock generally avoids the cheapest option. His thinking: “It might be more likely that a cheap product will break before an expensive one breaks.”
He doesn’t want to overspend on the top-shelf product either. “I buy the one that I think is going to work the best for me and lasts the longest. It may not have all the features and capabilities of the top-of-the-line thing. I find a middle-of-the-road product.”
Adcock is particularly drawn to products with quality guarantees, citing hand tools from Craftsman and Harbor Freight and their lifetime warranties as examples.
“You could buy higher-end tools. But if you buy one of these store brands, they’ll replace it if it breaks,” he says. “I find that is by far the best value when spending money.”
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