Welcome to Personal Finance Club where it’s shit on car loans Saturday!
People are so weird about cars. So many of us otherwise frugal, rational, human beings become financially INSANE when it comes to cars. At the grocery store we’ll carefully price compare between brands, trying to do the math on ounces per dollar. Should we buy the bulk size to save 20 cents per ounce? You know we’re not buying name brand Lucky Charms. Marshmallow Matey’s will do JUST FINE, plus we save 75 cents!
But then we walk onto a car lot and we INDISCRIMINATELY BURN THIRTY-FIVE THOUSAND DOLLARS THAT WE DON’T EVEN HAVE ON A STUPID CAR. Do we just love the idea of signing up to be a slave to our jobs for another few years in order to pay off this car loan so we can drive to said job in that same stupid fucking car?
What on earth guys. Stop that.
You know what I see when I see a BMW on the street? A silly broke person trying to look cool by living way beyond their means. And when I see a nicely maintained 1998 Ford Taurus still cruising around? I see a Roth IRA that’s blowing up in value like an H-Bomb test in the Marshall Islands in the 1940s.
Keep driving the car you have. If you need a car, buy a used one in cash. Invest what you would have spent on a car payment in an index fund for a few decades and you’re rich.
As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.