In the NBA, the phrase “The Big Three” gets thrown around every now and then. When three superstars are assembled on the same team through trades or free agency, instantly making them a championship contender, a new "Big Three" is created. Here are a few that come to mind:
But there’s another "Big Three" that you, like a lot of NBA teams, have probably spent a lot of money on. This one involves your finances:
These are the three biggest purchases you’ll likely make in your lifetime, and if you don't make good decisions here, your smart, smaller financial decisions won't make a difference.
Doing the little things – packing a lunch, avoiding the morning lattes, and cutting back on weekend shenanigans - certainly matter. They’re similar to the role players on an NBA team and are a piece of the overall picture, as small savings that are invested and compounded over time can make a difference. But they won’t make up for buying a home that’s out of your price range, consistently leasing expensive cars outside of your means, or taking out student loans for a degree with low career earnings potential.
Of course, there’s a lot of luck involved with making these purchases and many factors are out of your control (like buying a house near the top of the market cycle, which sensible people have done). But if you avoid doing blatantly dumb things when it comes to purchasing your house, cars, and degrees, you’ll be much better positioned for long-term success.
As the saying goes, don’t be penny wise and dollar foolish. When it comes to your finances, get the big purchases right and build your own dynasty.