Would You Rather Have Money or a New Car?
Posted by M.S. on May 1, 2009
Did you know that the moment a car is driven off the lot, it is worth alot LESS than when it was purchased 5 minutes earlier? One of the very best and easiest things you can do to save money, build wealth and get rich is to ONLY buy USED older model cars.
Remember the rule we have practiced for 32 years–We try to only invest in appreciating assets–NOT depreciating assets. Because our goal has been to save as much as possible, we have NEVER invested in new cars!
Buying used cars has put loads of extra money in our hands which we used to buy stocks, mutual funds and investment real estate. We’d rather gain wealth than try to impress other people and make automobile companies richer!
So, in keeping with that philosophy, 3 years ago we purchased a used company car, as it was about to be sent to the auto auction. The car is a 2002 Ford Taurus, it has 170,000 miles on it and we only paid a couple thousand dollars for it. It’s not super pretty, but it gets us where we want to go!
We figure we have saved $12,600 on that car in the past 3 years, since the average car payment is about $350 per month times 36 months = $12,600. Invest that money for 20 years and you’d have almost $60,000 if you could earn 8% on the money! The car still runs, so we are continuing to save money each month!
We’ll take the money rather than the new car or the admiring glances!
