Read on Twitter
Why your need for a new car is killing you financially
// THREAD //
// THREAD //
The average person doesn't comprehend how much money they spend on financing cars over their lifetime
Let's quickly examine the totals and opportunity costs of constantly buying new cars
Let's quickly examine the totals and opportunity costs of constantly buying new cars
Can you "afford the payment?"
When you're buying a new car, this is the question at hand. Car sales has become an art where they mathematically engineer the numbers to get the payment within your price range.
These days, the average car payment is $570 per month.
When you're buying a new car, this is the question at hand. Car sales has become an art where they mathematically engineer the numbers to get the payment within your price range.
These days, the average car payment is $570 per month.
If you did simple addition over 30 years we are talking $205,200
TWO HUNDRED THOUSAND DOLLARS
This is only your cost to purchase the car. We're not even considering the higher insurance, fuel, upgrades, and upkeep.
What about the opportunity cost of that money?
TWO HUNDRED THOUSAND DOLLARS
This is only your cost to purchase the car. We're not even considering the higher insurance, fuel, upgrades, and upkeep.
What about the opportunity cost of that money?
$570 per month compounded at a very conservative rate of 6% over 30 years turns into...
$561,606
Over half a milly to keep up with the Jones'!
How about the average market return over the past 10 years at 9.2%...
$1,024,064
$561,606
Over half a milly to keep up with the Jones'!
How about the average market return over the past 10 years at 9.2%...
$1,024,064
One last example for dramatic effect...
The S&P has had an average annual return of 13.6% over the last 140 years. What's the damage over 30 years?
$2,448,056
I can nerd out and run scenarios all day. Don't even @ me with the longer time frames. I KNOW!
The S&P has had an average annual return of 13.6% over the last 140 years. What's the damage over 30 years?
$2,448,056
I can nerd out and run scenarios all day. Don't even @ me with the longer time frames. I KNOW!
What are you going to do with your $570 a month?
I know my plan:
- Ignore others expectations
- Live within my means
- Spend on what gives ME value
- Invest in my family and friendships
- Enjoy #StealthWealth on my terms
I know my plan:
- Ignore others expectations
- Live within my means
- Spend on what gives ME value
- Invest in my family and friendships
- Enjoy #StealthWealth on my terms
