$1,000 away from having a paid-off car, he (let’s call him Tommy) decided to buy a brand-new car for $40,000.
Car insurance was around $300, and the car payment was $500.
While getting his new car, he decided to also poke fun at me for not buying a new one.
But he forgot to do the math.
He doesn’t save or invest. On top of that, he set himself up to throw away 60 grand over six years.
Instead of buying a car, I could invest 60 grand at a 10% interest rate for six years, not investing anything additional, which would come out to 110 grand.
I think I’ll be okay.
Some people might argue and say, well, he’s living because he bought a new car.
Is buying and driving a fancy piece of metal your definition of living? I hope not.
Most People Think Like Tommy
If I’m not driving a new car, I’m not living.
My car is almost paid off; it’s time to get a new one.
I can leave saving and investing for later down the road.
Investing is a losing game; you can’t trust the stock market.
My best years are now. I won’t wait until I’m in my 50s to start living.
There is a way to invest and live now. You don’t have to live a life of sacrifice.
And because most people think like Tommy, they will always be broke, barely making it by, or living a financially mediocre life at best.
If You Want To Live Differently, Don’t Follow The Crowd
The best piece of financial advice you could implement today is to do the opposite of the majority.
Most people:
Live above their means.
Delay investing indefinitely.
Spend their money unintentionally.
Don’t maintain an emergency fund.
Only maintain 1-2 sources of income.
Buy new cars they can’t afford to pay cash for.
Don’t increase their income frequently enough.
Focus on academic education instead of financial education.
Be Wary Of The Flashy Things
Nice things are just that, nice.
But there is always a cost to those things. Tommy now must ensure he works to earn a certain amount to afford that 1,000 car expense, not to mention any maintenance and repair costs that arise. He doesn’t have an emergency fund, and he doesn’t have any investments or other savings. He’s one inconvenience away from getting financially behind.
Before you make a purchase, question your intentions, motives, and reasoning.
Are you buying this because you want to or because society is making you think you want to?
After buying my first car ten years ago, the guy that sold it to me pointed out the next car I should buy when I work my way up.
I still find his logic humorous and ignorant.
Working my way up financially has nothing to do with the type of cars I own.
It’s nice to be able to buy certain cars, but at the end of the day, we should never place too much value on materialistic items.
Am I saying don’t buy flashy things? Hell no. I like some flashy things, but I will never compromise my financial health for appearances. And even when we can buy flashy things, it doesn’t mean we have to buy them.