Buying shares as a substitute for buying ‘stuff’

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Freetrade referral link – sign up and earn yourself a free share worth up to £200


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I get the itch more often than I’d like to admit.

It comes and it goes. It can linger and gnaw away at my mind for quite some time and have quite the lasting impact.

It seeps into my thoughts when I least expect it during the day and jabs at me every time I see an advert on TV or a colourful poster at a bus stop.

This itch is every ‘thing’ I want but don’t necessarily need.

This conflict is something I’ve mentioned before, way back last year when I first started this blog; the newest mobile phone, games console or even takeaway is something I’m forever longing for but usually struggle to justify buying.

Of course, life would be boring without treating yourself from time to time, and I certainly do, but it can quickly get out of hand.

As a result, I’ve tried to find ways of getting the same temporary satisfaction and good feeling you get when you go on a spending spree, but with less of the financial downside.

One happy medium I’ve found is buying small amounts of shares whenever that itch rears its head.

This is something you can do nowadays with relative ease and with little cost thanks to the likes of Freetrade, Trading 212 and Moneybox, to name a few, as well as your big name platforms that allow you to buy and sell funds at little cost.

Wanting a TV but instead buying a ~£100 share in Disney (for example) gives me that shot of dopamine I need in order to temporarily forget the thing I originally wanted (was it a TV did I say?). But this also now means I own a small part of that company and haven’t actually ‘spent’ anything; it’s invested and will hopefully grow larger over the years.

It can work for smaller purchases too.

A cup of coffee at £2.50 could pay for a share Aviva, BP or Tesco. You no longer have your 30 minute hit of caffeine, but instead own a tiny portion of some of the UK’s largest companies.

So below I’ve listed a number of shares with their equivalent consumer product (by average price) to see what shares you could be buying instead of the next impulse purchase…

Share

Item

Average cost p/person*

BP, Aviva, Tesco, National Express

Cup of coffee

£2.50

Burberry Group, Greggs, Dropbox

Takeaway

£15

MoneySupermarket, Boohoo

Meal deal

£3

National Grid, Prudential

New DVD

£10

easyJet, Sage Group

Netflix (basic package)

£6 p/ month

Admiral, Diageo, Persimmon, ASOS

Clothing

£20 – £30

Auto Trader, Rightmove, Avast

Pint

£4.50 – £5**

Tesla

New iPhone

£729

Alphabet (Google)

13” MacBook Pro

£1,299

Coca-Cola, AMD, Unilever

3 course meal incl. drinks

£40 – £50

McDonald’s, Alibaba

Apple AirPods/ Pro

£159

Just Eat, LSE, Nike

Headphones

£70 – £80

Salesforce, Estee Lauder, Spotify, Visa

New Fitbit

£130

Netflix

New Apple Watch

£400

Nvidia, Apple, Mastercard

Monthly car payment (National average***)

£226

It’s a fun comparison to put these things side-by-side and see what I could own if I just cut out, or reduced, the amount I spent on stuff.

It’s another thumbs up to perspective.

Do I really need that other thing? What’s it really going to do for me? Will I really get worth out of it or will it just get forgotten in a month?

You work hard for your money, why not start making it work hard for you?

 

 

 

*These are just the prices I would expect to pay.

**I live in the South – whelp.

***www.motoringresearch.com

5 thoughts on “Buying shares as a substitute for buying ‘stuff’

  1. Huh, well that’s something that I hadn’t considered before. I seem to nearly always get buyers remorse after purchasing something. That doesn’t mean that I am an impulse buyer- I end up considering every option for weeks, if not months before buying it. In fact, usually after purchase, I don’t even use the item for weeks- because its “too new”. I guess with options like freetrade now- it doesn’t matter how small the purchase/order is- as you don’t lose anything in fees.

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    1. Exactly! Freetrade (and T212) have been great for shaking up the old fuddy duddy investment firms (not including Vanguard because they only offer funds). I can only hope this is a sign of the future with increased flexibility and lower fees.

      I used to get buyers remorse a lot too but am consciously making an effort to train myself out of it now so I don’t end up never treating myself. I do still ponder on a purchase for a good while though…you always want to find the best deal or weigh up if you’ll truly get value from the thing.

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  2. Since I’ve been given access to the beta-testing on fractionals, I’ve felt akin to a gambling addict using my Freetrade app!

    I was initially going to test with just £40 to see what it was like. I’ve since thrown in another £60 and I must stop as it’s not my ISA, which is where most of my money should be going. I’m going to keep it to just £20 a month now from now on, to curb my ‘gambling’, although once my MB takes off again, I may throw some profits at those US shares!

    Still, it is better than gambling and shopping – at least you own something (or a part of something) which can increase in value.

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    1. It’s funny you should mention the similarity to it feeling like gambling as that’s my topic for next week’s post.

      I know I’m going to have to be careful once they roll out fractional US shares for everyone. Being able to buy any amount of Amazon and Google for free is just too big a temptation. I did try and limit myself to a certain amount a month too with Freetrade but I broke that rule long ago. My account for Freetrade is also outside of the ISA tax wrapper but I can’t see myself ever using the full yearly capital gains allowance.

      Liked by 1 person

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