Chest freezers are super-hard to get right now with the COVID pandemic. They are back ordered by manufacturers and the used market is dry. So when Teresa came across one on Facebook Marketplace, she jumped at the opportunity as she really wants one. It was a great deal and the seller was going above and beyond to save it for us. He assured me that it worked and I trusted him. He's a business person and had a solid story for why he was selling it. I'm usually a very good judge of trust.
We paid him $400 cash, no haggling. We got it home and I thoroughly disinfected it for over an hour. It was a lot of work and ended up costing me a full work day. But my wife was happy and that has a great value. I plugged it in overnight to make sure it worked. In the morning, the alarm sounded as it reached 26 degrees. The temperature never dropped below that. In fact, I lost more time throughout the week fiddling with it. Eventually, I spoke to an appliance repairman who diagnosed it over the phone. "It's leaking Freon and is junk." He went on to explain that it would cost way too much to repair and we could just wait to buy a new unit for $1,000 - $1,200. Darn! Teresa and I were upset that we had no freezer, lost $400, and had to pay to recycle our cold closet! Plus, the seller was not responding to us at all! I was duped!
Let's look at this story from an opportunity cost standpoint:
If I had thought like a Rich Man, I would have said NO to any used, risky option to save me money as I would have known that the cost would have been more. It's the Bill Gates $100 bill story that I've told on this podcast. If I was thinking like a Rich Man, I would have told my wife to buy a new freezer and get the one that she wants for a decent price. Then have it delivered, setup, and get the warranty WHILE I worked in our family business on the 20% of work items that earns me 80% of my profits. If I were thinking like a Rich Man, these decisions would have earned me $2,000+ while my wife spent $1,200 on a freezer. I would have been $800 ahead instead of $1,157 behind. In this example, the Poor Man to Rich Man swing is $1,957! Imagine how big this opportunity cost gets when you look at big items and lost time in weeks or months!
So many of us make these Poor Man decisions because it's what we've been taught. I shared this story with my good friend John VanderMuelen and he TOTALLY related with Poor Man Mindset. He wants both of us to avoid this easy mistake so we can achieve our highest potential in business & life.
On a good note... The seller did get back to us and offered us a refund. He was trustworthy and felt bad. That made us feel a lot better!
Ken Carfagno optimized his first solo cleaning business to $60,000 annual profit working 2 days per week without employees, sold it for close to 6-figures, and is currently following his ISO Model to do it again in a different state! This podcast will equip you to do the same!