I recently wrote about getting my CCIM (why I though it was beneficial and what the process entailed). What I left out was that after I received my certification, they gave me this fancy, ballpoint pen with the CCIM logo engraved on it. And as far as pens go, it was a doozy: a top-of-the-line, state-of-the-art, elite pen if there ever was one! Want more articles like this? Create an account today to get BiggerPocket's best blog articles delivered to your inbox Sign up for free I lost it the next day. On a related note, not too long ago, I was roaming around the aisles of Target. I was wandering around and I came across a pack of 20 BIC pens for $1.69. I bought it. And while I’ve lost plenty of them since then, it hasn’t bothered me much for some reason. As far as pens go, the sky is really the limit. This Montlblanc Meisterstuck Solitaire Blue Hour midsize ballpoint pen costs a meager $1,005 and is surely worth the investment. Or forget that, why not try this Montegrappa My Guardian Angel rollerball pen for just $67,945. Just in case you’re on the fence about it, I should note that it comes with free shipping! On the other side of the equation, it’s hard for me to imagine how a company can make a profit by selling pens for approximately nine cents a piece. It reminds me a lot of Leonard Read’s famous essay I, Pencil that Milton Friedman discussed so memorably when explaining how a market economy works. But that’s the thing about market economies, they provide lots of cheap goods that will get the job done, along with lots of ridiculously priced “luxury” goods that have a brand that is “so in right now!” Related: How I Saved 40% of My Monthly Income & Amassed $100k in Assets Deferred Gratification I, and many other’s on this site, have noted the famous Stanford Marshmallow Experiment, which demonstrated that kids who were able to defer gratification did much better later in life. Indeed, the scientific literature has consistently shown that the ability to defer gratification is one of the most important predictors of someone’s success in life. If this isn’t something that comes naturally to you, it is critical to work on cultivating this mindset. But I’ve also stressed that you “must learn to enjoy the path,” rather than be obsessed with the destination. If you’re always just trying to get there, you’ll very soon realize there’s no there to get to. And you will have wasted your life pondering about a future that will never arrive. This can be applied just as easily to the things you buy as it can to your daily habits and mindset. You don’t need the best stuff to get by. Diminishing Marginal Returns and Faux Wealth There’s this meme I saw floating around comparing someone who’s broke to a billionaire. Price tags were attached to their various items of clothing. The broke person’s shoes were worth $1,000, his pants $400, etc. For the billionaire, his shoes were worth $25 and his pants $15, or something like that. This is of course, an exaggeration. But it highlights that there’s a lot of truth in Macklemore and Ryan Lewis’ song “Thrift Shop“—That’s 50 dollars for a t-shirt, limited edition, let’s do some simple addition [lots of profanity]I call that getting swindled [more profanity]. People pay a lot of money for stuff that is barely better than generics or the stuff you find at a thrift shop. In fact, private label brands generally cost 25-30 percent less than their name-brand equivalents. And the difference between a luxury item and a normal item can be many, many multiples. A friend of mine mentioned she bought hand bags on EBay for less than half of what they cost retail, and she couldn’t even tell the difference. On the other hand, here’s a list of the top 20 most expensive handbags you can buy retail; number one is a mere $261,000! Now maybe I’m just a guy (we men spend our money wisely on essential necessities like $21,327 sneakers), but I honestly can’t tell much of a difference between the top listed handbag and a generic one you’d buy at Macy’s for $200. (Or better yet, on ebay for half that.) Related: 14 Unusual But Possibly Brilliant Savings Tips to Net You Thousands Finding A Balance Of course, these are the most extreme illustrations, but I’m sure you can come up with dozens of examples where many people (and possibly you or I) spend a lot of money on unnecessarily expensive consumer goods that add very little extra utility. My dad had a friend who worked at a furniture shop and would buy a new living room set every couple of years. My dad would then buy his “old” set for less than half of what he paid for it. My dad owns almost 1,000 units, by the way. In economics, there’s something called the Law of Diminishing Returns, which notes that “in all productive processes, adding more of one factor of production, while holding all others constant, will at some point yield lower incremental per-unit returns.” You can apply this to pretty much any consumer good, and it would sound something like, “increasing the price/quality of a good will at some point (very quickly) yield less incremental return.” A $10 version of something is rarely, if ever, 10 times less valuable to you than its $100 equivalent. Of course, I’m not saying to buy the cheap stuff you’ll find in the discount bin at your local dollar store. What you get needs to work. But it doesn’t need to be fancy. My brother’s motto is “buy the second-cheapest item available at the store.” The cheapest will usually be junk. This isn’t a guaranteed method, but it’s a decent rule of thumb. On the other hand, going around flaunting fancy “stuff” is just a way of pretending to be wealthy and successful. The real thing is so much better. And at least from my experience, those who have it, rarely seem that interested in flaunting it. Consumption Versus Investment The reason this is so important is that whatever you spend consuming, you can not spend investing. Credit-card debt hit a record high this year. And those wallowing in it are in no position to start investing for their future. Albert Einstein once said, “Compound interest is the eighth wonder of the world. He who understands it, earns it… he who doesn’t… pays it.” Buying overpriced consumer goods is bad enough. When you put it on credit, it’s all the worse. You’re negatively investing; literally mortgaging your own future to pay for consumer goods that will depreciate 50 percent the moment you complete the purchase. The investment mindset starts with learning to defer gratification. And there’s no better way to learn to defer gratification than to realize that you don’t need the best, most expensive stuff, anyways. Stuff, after all, is just stuff. What about you? Where do you splurge and where do you choose to save your money? Share your tips and tricks below!