Barbara Corcoran: This Is the One Question You Need To Ask Before Buying Anything
Put on your headphones and download an episode of “So Money,” hosted by Farnoosh Torabi, who is an award winning financial correspondent, best selling author and television personality. Torabi’s podcast, in its own description, “brings candid conversations about money with the world’s top business minds, authors and influencers.”
In episode 738, Torabi spoke with guest Barbara Corcoran, one of the stars of TV’s “Shark Tank” and who offers financial advice based on her rags to riches story involving the leap from working class beginnings to an estimated net worth of $100 million.
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Deciding What To Buy
For this episode of “So Money,” Torabi asked Corcoran what makes her buy one thing over another, especially when price isn’t an issue.
“Okay, so you’re a part of a community of spenders, Barbara,” Torabi said halfway through the episode, “that arguably doesn’t need to worry about price tags. I mean, you are a bit price conscious, which I like. I like to hear that. When you do make a purchasing decision, if price is not really the issue, what makes you want to buy something if you’re comparing two things — a product, or a service — what makes you go for something versus not?”
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Know What You Will Use
Corcoran has found many ways to save and live frugally over the years — she will fly first class if she’s not the one buying the ticket, but if it’s coming out of her end, then sitting in coach is fine by her.
“The first thing I ask and probably the main thing that I ask is ‘how often will I use it?'” Corcoran told Torabi. “I’m just not wasteful. I don’t mind spending a lot of money on a jacket that I’m going to wear on every flight, every rainy day.”
“In fact, I recently remembered what I bought,” Corcoran recalled. “I had the salesclerk take the tag off, take my credit card and not tell me. Cover up [as] I sign it. Because I knew it was a pricey label. Why I went ahead with that purchase [is] I wear that beautiful jacket, [it] would look good on every air flight I take. I wore that yesterday in the rain. I had it on this morning. I’m going to wear the heck out of it.”
That’s quite a statement from Corcoran, who built her $5 billion business with a $1,000 loan and sold her real estate empire, Corcoran Real Estate, for $66 million a few years ago. Most people in that position might be burning money on things they do not need or care about. Not Corcoran.
And Don’t Buy What You Won’t Use
“If I get great use out of something, I will spend anything,” continued Corcoran. “If I don’t get good use out of it, I’m not going to spend a dime. Forget about it. It’s so wasteful. I can’t help but to think what a family could do with that money who didn’t have the means. It would feed their family for a month on the cost of a designer jacket.
“I just don’t have that freedom of thought to be able to go there. Unless I’m going to wear it and justify it, ‘Oh, no. It’s alright. It’s okay to do this.’ Then I’m okay with spending money.”
Tobari asked Corcoran to recount the purchase of a Gucci dress that was to be used sparingly, when she filmed “Shark Tank.” Corcoran ultimately didn’t feel the dress was for her, solidifying her motto of asking herself if she’ll use the item before making a purchase.
“I’m not going to blame it on a guy that helps me dress with TV,” Corcoran said. “He said I’d wear them on ‘Shark Tank’ and I’d look a million bucks. Totally goes, I never wore them on ‘Shark Tank.’ I feel so guilty. I only wore it twice a month. I’m not wearing more. As we speak, that dress is in the box that I had labeled my classical sisters. I have five sisters, all of which, except for one, is exactly my size. Anything I don’t use, it goes out that season to my sister’s knit room.”
Corcoran went on to explain that she’d rather give away her clothes to her sisters and see them happy than purchase new things for herself that do not make her feel the same way.
“How often will I use it?” is a question you can ask yourself the next time you’re faced with buying anything, particularly if it’s a bit out of your normal price range.
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This article originally appeared on GOBankingRates.com: Barbara Corcoran: This Is the One Question You Need To Ask Before Buying Anything
