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HOT TOPIC The road to wealth is simple: Drive a crappy car

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MJ DeMarco

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Very rarely do I agree with Marketwatch's personal finance tips but I agree with this one.


Early in my entrepreneurial journey, my lust for fast cars really set me back in many ways.

Each time I was burdened with payments which forced me to work crappy jobs. All for an above average car that was merely a mask to an identity that I haven't yet achieved.

The nice car gave me a temporary ego boost (for about 1 month) and swiped away TIME and MONEY.

Nothing wrong with a nice car, even an exotic one.

But for the love of God, wait until you can afford to buy one, pay cash (or use cheap money) and not bat an eye about it.
 

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Tourmaline

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I'm currently in the market for a new vehicle. Simply need something bigger.

I struggle between wanting a newer car with better safety tech and crash ratings, vs just getting the cheapest car that will do the job and not be a pita reliability wise possible. Either way it will likely be a Toyota or Honda.

Do you or anyone have an opinion on buying a newer car specifically for better crash ratings(better engineered crumple zones and what not) and better safety tech(automatic emergency braking, lane keep assist)?

Looking at $10-15k for an older vehicle vs $20-25k for a newer one with the better safety. I'm not sure if the difference is that pronounced, but it seems like according to NHTSA death rate statistics that newer vehicles are indeed notably safer?

I'm buying this in cash but still would rather not spend more than necessary.
 

Lee H

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Buying a car is often an ego trip that lands you in debt for years. I have had expensive new cars and after a very short period of time the buzz wears off and you're just left with an expensive monthly bill for little or no pleasure.

Don't get me wrong, a car is fairly essential in this day and age but I encourage my kids to only buy something they can afford and not get hung up keeping up with the Jones's.
 

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Nothing wrong with a nice car, even an exotic one.

But for the love of God, wait until you can afford to buy one, pay cash (or use cheap money) and not bat an eye about it.
Totally agree but I suspect the advice will largely be ignored by the masses as I think most people have to go through it personally and get it out of their system before the reality really hits home. When 6 months down the road they see that huge chunk of cash disappearing out of their account each month and feel the squeeze on their finances.
 

struka

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This is always a good topic for me because I am a car guy and I love cars but one thing I love more is no car payment. Everyone I know wants the newest car around me and keeps asking me when I will buy a new car. I always tell them, there is nothing wrong with my car, it is reliable and I only drive 15 miles a day. I've had it for 14 years now, paid $5k cash for it, it is still worth $5k (to a car enthusiast) with 326k miles on it.

My favorite line from people that have the new cars is "i have a new car and I never put money it." That is true but your car also cost you $40k (more if you're paying interest), you will sell it in few years for maybe $20k, so technically your maintenance free car cost you about $20k during that time minus oil changes are required maintenance that every car needs".

I will drive my car as long as I can but there will be a time where I won't be able to fit 3 kids with car seats so I will need a newer car. One thing with me is I buy cars for a very long time because I get attached to them and I know how to work on small things. I get the most use out of cars unlike the majority of the population.
 

Vitaly the Winne

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I've had my car for about 4 years, and people close to me have asked me "when are you going to get a new car?" The script trying to dig its way in, and the Jones effect all around me. Basically it comes down to eliminating bad debt, and as a friend of mine once said, "think of the world around us as Gulliver's travels, and every distraction as a little rope getting tied around you, meant to keep you in place and tied down. The more you focus on your goals and getting what you want, the more you begin to cut these ropes and get up to claim your grestness, and the more you fall for these distractions the more ropes are getting tied around you and making your descent to greatness that much more difficult."
 

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I don't get the preoccupation that people have with cars.

A few years back, I met a girl from Orlando. She worked at Disney. Her father and mother also both worked at Disney. They all made just barely above minimum wage. The three of them shared (I think) either a studio apartment or a one-bedroom place, just to afford rent.

But she was driving a brand new sports car.

One day, I picked her up in my 1997 Toyota Corolla.

I remember her looking at me very quizzically. Later, she shared with me that it totally blew her mind and she really respected me for not letting the car I drove define who I was.

I was like, "Of course it doesn't define who I am!"

To me, all it is is a four-wheeled machine with an engine that gets me from point A from point B.

The car I drive says nothing about my worth, my value as a human being, or my identity.

If anything, what it says about me is, "I care about efficiency, I hate wastefulness, and if I'm in the process of building something great for myself, my car is going to rob the very LEAST possible amount of money from my venture."

And hey - I don't even pay for maintenance on this thing! Hahaha I'm just like all the people with new cars - all I need is my regular oil change and tires, and I'm good to go for another 100,000 miles!
 

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JByers210

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Glad you posted this. I just bought a 06 Honda Pilot a couple months ago that should last me for at least 5 years with no crazy payments. I have friends who went after the mustangs and trucks and have spent stupid amounts on all of it with the leases and repairs.

To each their own...but I would rather be free to work on my business than get a nice car to go to work with every day.

I'm currently in the market for a new vehicle. Simply need something bigger.

I struggle between wanting a newer car with better safety tech and crash ratings, vs just getting the cheapest car that will do the job and not be a pita reliability wise possible. Either way it will likely be a Toyota or Honda.

Do you or anyone have an opinion on buying a newer car specifically for better crash ratings(better engineered crumple zones and what not) and better safety tech(automatic emergency braking, lane keep assist)
IMO Honda Pilot. No issues. I did a ton of research and ended up with it for the reliability.
 

PinPointing

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I drive a lot doing sales. I had a cheaper car that I paid cash for but it was loud, always something broken, and frustrating. It finally died and I financed a ford fusion that was a couple years old. Quiet, leather, reliable, and a solid stereo. I even get compliments on it being so nice for a ford.

the payments aren't crazy and it helps build my credit. Most important to me is it makes work far more enjoyable.
 

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Typical car payment for a 5 year car loan: $350.

That is: $21,000.00. Not counting full coverage insurance.

I bought a 2001 Kia Rio around Mid 2017. Grandma drove it. Low miles. $1,500 dollars. I put a timing belt, water pump, etc on the vehicle. Runs like a champ.

The car note above. Was mine. I could have saved a ton of money. If I had only realized what it was doing to me. I wasn't struggling to make the payment. When I started making way more money hustling. I noticed my expenditures more. Using mint, has been a godsend.
 

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I've only owned 1 car and still drive it, a '05 Cadillac STS. Still drives well and doesn't look like it's 15 years old. Took out a loan in my last 2 years in the military and made sure to pay it off before I exited. I remember setting up auto payments, forgetting I set up auto payments, then paying 2 or 3 times the loan amount some months.

Going to take the front bumper off this weekend to touch up the paint & blacken out the grille, keep that baby looking new.

Insurance? Ha! The car is worth less than $3k today; I think I pay around $25 a month.
 

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Well, I'm still driving my $1300 2001 mini van for work even though my mechanic told me to stop driving it. I've decided to drive it until something happens where I can't drive it any longer or it needs new tires. Had the oil changed a few days ago and it still purrs like a kitten.
 

Charnell

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Well, I'm still driving my $1300 2001 mini van for work even though my mechanic told me to stop driving it. I've decided to drive it until something happens where I can't drive it any longer or it needs new tires. Had the oil changed a few days ago and it still purrs like a kitten.
Username checks out.
 

JunkBoxJoey_JBJ

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Very rarely do I agree with Marketwatch's personal finance tips but I agree with this one.


Early in my entrepreneurial journey, my lust for fast cars really set me back in many ways.

Each time I was burdened with payments which forced me to work crappy jobs. All for an above average car that was merely a mask to an identity that I haven't yet achieved.

The nice car gave me a temporary ego boost (for about 1 month) and swiped away TIME and MONEY.

Nothing wrong with a nice car, even an exotic one.

But for the love of God, wait until you can afford to buy one, pay cash (or use cheap money) and not bat an eye about it.
2004 GMC with 158+k...and STILL kicking.

Tried to post pic of dash, file too large, but the payment isn’t!

PS - But I do agree with their recent book reviews.
 
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Matt Hunt

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I wholeheartedly agree! I just laughed on the inside when I graduated PA school and half of my classmates were getting brand new vehicles. Some were at least a Ford or Toyota (though still can be really pricey), but many were getting a Lexus, Infiniti, etc. This is at the time where we had just graduated, barely making money yet, and still have a ton of student loan debt!

I continued to drive my 2006 Honda Accord. Here's the best part about that car... I paid $10,500 for it. Had a hail damage claim after a couple years that paid $6,500 I think (I didn't bother to fix it). Then last summer a girl pulled out in front of me and I crashed into her. Then the car was actually totaled, but her insurance paid me $4,500 for it (plus another $500 in case I wanted to go to the doctor... I was perfectly fine). So it was basically a free car for 3 years! The A/C was broken, though, which was hell in the summer here in TX, but it would've been $1,700 to fix that. I lived with the sweat!

I got another Accord after that. It was $16k, but only 31k miles on it. More than I really wanted to spend, but the old Accord had 217k miles and was still going strong. So there's likely a lot of years I can get out of this car. I think that's the sweet spot... used, but not broken down. I don't think I'll ever buy a new car again.

Plus I'm in Dallas where we get hail every spring, and it's parked outside, so at some point I'll probably have a hail claim on this one, too!
 

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D.Navi

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Sometimes the most obvious things are what set us back the most.

Note to self: Beware of Engel's law -- stay within your means as your income increases. Cash is still king.

And right now, no car works better than a crappy car at my current standing in life. :)
 

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Thanks Mj. That reminds me of something I want to put in my book.
 

Vitaly the Winne

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I think the people who have patience instead of cash flashing to impress the Joneses (usually when there isn't much cash either) are the ones who ultimately get ahead.

Like MJ said in either TMF or Unscripted, about 80% of the new cars on the road are financed, and as soon as a new car drives off the lot it loses about 20% of its value, not too smart.
 

EVMaso

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My favorite article on the topic of car ownership comes from the fine folks at The Tropical MBA:


Entrepreneurmobile: A vehicle that has almost fully depreciated. They are reliable cars that are generally inexpensive to maintain and fix. They can often be sold several years later for the same price they were purchased for. Now seen as status symbols of the new rich, these vehicles free us from a prison of payments and allow us to focus on real wealth and asset generation.
I have linked this article to other people so many times.

I myself have an "entrepreneurmobile" (2005 Focus baby!) that is currently in the first stages of death (random non-critical electrical failures here and there). One summer I drove this thing the equivalent of 3x across the US East to West.
 

Kak

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2004 GMC with 158+k...and STILL kicking.

Tried to post pic of dash, file too large, but the payment isn’t!

PS - But I do agree with their recent book reviews.
I'm at 230k in my Suburban. I plan to drive it 400 miles tomorrow. Wouldn't hesitate to buy another. I'll keep it for activities that call for an old truck. GM truck platforms are very solid and long lasting vehicles.

Part of being unscripted is you can be rich as shit and still drive an aging vehicle. Why? You can do whatever the hell you want to. There is no expectation schedule to meet. There is no image to keep up. Just life without a script.

I'll upgrade this year because I can write it off with bonus depreciation. Thinking GLS or Escalade.

Right brain says Mercedes. Left says Escalade.
 
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JunkBoxJoey_JBJ

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I'm at 230k in my Suburban. I plan to drive it 400 miles tomorrow. Wouldn't hesitate to buy another. I'll keep it for activities that call for an old truck. GM truck platforms are very solid and long lasting vehicles.

Part of being unscripted is you can be rich as shit and still drive an aging vehicle. Why? You can do whatever the hell you want to. There is no expectation schedule to meet. There is no image to keep up. Just life without a script.

I'll upgrade this year because I can write it off with bonus depreciation. Thinking GLS or Escalade.

Right brain says Mercedes. Left says Escalade.
And besides...same friends know when to wave!

Yes, f*ckers it’s still me driving it.
 

Mr.Brandtastic

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Yea I drive an old car. Have had it for years, everything works and it runs. That's good enough for me.

So many guys, so many people I know fall into the car trap. Every year or two it's time for a new car! Like their old one is just not good enough any more. Even though their old one is way newer and nicer than my old one. They sometimes gloat and brag about their cars but it doesn't phase me. In the next breath they're griping about their insurance and car payment.

Toys can wait. If you can't delay gratification then I can almost guarantee you'll never be successful. If the car doesn't seem cheap to you, don't buy it. If you have 10k your car should be 1-2k, not 10k.

I just hate seeing it. Guys go down this road of ever escalating one-upmanship. Part of it is arrogance and ego but the worst of it is the almost lusting for the status and dominance that car provides. Because nothing screams insecure quite like having a car you have to work a hated job to afford. The sidewalker walks on the increasing debt treadmill until it's an all consuming void.
 

minivanman

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I'm at 230k in my Suburban. I plan to drive it 400 miles tomorrow. Wouldn't hesitate to buy another. I'll keep it for activities that call for an old truck. GM truck platforms are very solid and long lasting vehicles.

Part of being unscripted is you can be rich as shit and still drive an aging vehicle. Why? You can do whatever the hell you want to. There is no expectation schedule to meet. There is no image to keep up. Just life without a script.

I'll upgrade this year because I can write it off with bonus depreciation. Thinking GLS or Escalade.

Right brain says Mercedes. Left says Escalade.
Check out that new Jaguar SUV.
 
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