Thursday, October 19, 2017
Beat Up But Paid For – What Do You Drive?
Drive a beater if you want to get ahead. Below are three examples of the type of car you could drive instead of having huge monthly car payments.
A huge factor in most working adults’ lives is the tool they use to get to and from work, shopping, or even playing taxi for their kids. This tool I’m talking about is their vehicle. Why do I keep calling it a tool? Well, it is. AND, that’s all it is. It’s a machine made to accomplish work – a tool. Whether brand new off the dealer’s lot or barely running and falling apart, it basically does the same thing. When I was deeper in debt, I had a new Toyota Tundra pickup truck and two motorcycles along with a small credit card balance. Those four items represented
ROADBLOCKS to my financial happiness and my plan to increase my net worth
through a higher savings rate. They were
negative liabilities that kept my net worth in the RED. With the associated monthly payments, I was
living paycheck to paycheck with no chance of bettering my financial self
1) winning the lottery (which I don’t play)
2) getting a significant pay raise (which didn’t happen)
3) making a drastic change in what I spend my money on
This drastic change was to get rid of all my payments and that started with selling the Toyota Tundra and getting rid of my $550 per month payment (I ended up saving another 150-200 per month in insurance and personal property payments also). The motorcycles were sold and paid off soon after as well as the credit card.
In order to make this happen, I needed a paid for beater car for transportation.
I already had a beatup and well used 1991 Toyota Landcruiser that I paid $1050 for a few months prior (less than 2 months Tundra payments). The Landcruiser has around 185k miles on it. Because I like to have a little insurance and have a tool to get to work, I needed a backup vehicle. Along came the Blue Beast pictured above, a 1994 GMC Sierra base model pickup currently with 255k miles on it. Blue was purchased for $500 (less than 1 truck payment) – and yes it ran and drove great and doesn’t ask for much except gas and oil.
I did upgrade this year to a new daily driver and still have the Landcruiser as a backup (my 17 year old son drives Blue). It’s a 2003 BMW 525i wagon with over 230k miles on it. I picked it up for $3000 (less than 6 months truck payments)
All of these reliable, yet high mileage, cars require normal maintenance like any other car and they are way cheaper to operate per month compared to a new “reliable” vehicle with its monthly payment. I work on my own cars, so my repair costs are lower than most folks with used cars, but even if I needed to use a shop for any repairs required, I still bet the overall operation costs would be lower than a new car. I love not having car payments. I love having a positive net worth. I love using my paychecks to invest, save, and build wealth.
What do you drive? How much is your payment? How awesome is it to not have a car payment or how awesome will it be to not have a car payment?
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