Debit cards are great but if you travel, unless you have a pretty good balance, hotels and car rentals hold out some fairly large amounts and can run your balance short. Even getting gas they can hold out $100 a time for several days.
As far as the road to wealth is to stay out of debt, I’m not so convinced. I knew a guy fairly high in the food chain at work that would never have any debt. He rented his house for years long past his retirement. He never wanted to spend the money or have housing expenses but he missed out on buying a house in the old days for about $10,000 and having it appreciate to over $250K over the years. Made him feel good which is fine but not sure I would advise it to young people.
Likewise the folks I worked with were largely introverts and fiscal conservatives. It pains me talking to them now after retirement because they would never risk an investment in the market and put all their money in 2% money market accounts. They never lost anything but they could have had double or triple the money for retirement with just a little risk. To each his own though.
Dave Ramsey has good advice for people who have no control on their expenditure, you give them a CC for $20K and they go out and spend it.
I used to like Suzie but got tired of the feminist innuendo in her advice and all the “go girlfriend”. I know some men could be abusive but just to throw all of them under the bus at once is not fair. There are plenty crazy women out there too.
Usually after 5 years the depreciation curve starts to flatten and become more irrelevant. If I was buying a 5 year old car the last thing on my check list would be depreciation.
There’s an old axiom that the difference between being “well off” and being wealthy is that if you’re “well off” you’re working for your money, and if you’re wealthy your money is working for you.
One key to the difference is “residual income”. If you can build up enough income from past efforts that continues to come in, and you can use that to create even more residual income, you can build true wealth.
There’s another old axiom that if you want to build a fortune from scratch, only accept advice from people who’ve built a fortune from scratch. So I guess my advice is useless!
It’s just a theory of how much the car’s value will decline until it’s proven. When you sell the car is when you find out if it’s real.
Hold on to the car long enough and I may even begin to appreciate beyond its original value!
Sometimes a happy accident - the 1957 Chevy Sometimes it should be obvious - '66 Shelby 350H Mustang!
I will agree that the exact amount of depreciation is theoretical but the big first year drop is real for almost all normal cars and trucks. Avoiding that drop for a car you want to own for 5 years will lower your costs overall. Same for 10 years, although the percentage that the first year contributes drops.
But some people - like my brother-in-law - think buying used cars is like buying someone else’s used underwear!
As you may know I have jumped on the 3 year lease bandwagon for my wife, buyout price was 2 grand more than what they were selling similar cars for on the lot, and her’s had been rear ended.
LOL, I love it!
With used cars there seem to be two choices: (1) cars that have seen better days and generally need some work, or (2) late model used cars that are back on the lot because there’s something wrong with them… in some cases a prior wreck.
Option 1 is truly valuable for people buying their first car, those operating on a tight budget, or those who enjoy fixing up their own cars.
Option 2 is often a trap. People think they’re getting a car that must be great because it’s only a year or three old, then find out the tranny is falling out or the rear end was riveted back on after being ripped away by a tractor-trailer. Or it’s a flood victim.
I’ve always been weary of buying a used car. The exception would be a hobby car, like a Spitfire, an MGB, or even a Porsche 914 (now that the stigma has worn off). I always loved those little sportscars, especially in ragtop form.
That’s what my BIL says about used cars - Buying someone else’s problems…
Given the popularity of leasing as well as the greatly improved quality and durability of new cars, I don’t think that 2, 3 or 4 year old used car is always going to be a problem. In fact I’d dare say its rare these days. Sure, ya gotta do your due diligence and check it out carefully - As we always advise on this forum.
Those of us that keep our cars a longtime are more the rarity than the norm. Sure the average age of cars on the road is 11 years but the average buyer keeps a car for 6. Either I’ve done my due diligence or I’ve been lucky (or both!) - the only real stinker car I bought was a brand new one in the 80’s.
You can check out a car all you want…but many times an abused vehicle for a year may not show any signs. I know a guy who leases every couple years. He does ZERO maintenance…and I mean ZERO. No oil changes…original tires…never does one thing. Doesn’t even clean it. Dealers will take this vehicle in trade and then spend some time cleaning it and getting it ready for the unsuspecting buyer. I’d never buy one.
Maintenance is one thing. Shouldn’t need tires in two years but certainly a couple oil changes. Another concern of mine is something I have witnessed first hand. If you really have no vested interest in the car and have no mechanical pity, they don’t bother to slow down or swerve for bumps/holes/gravel/water etc. Just plow on through. Most cars will hold together OK for a couple years of such abuse but the toll has been taken.
I suppose part of the issue is I hate looking for a car, and finding a used car in the right color, shape, etc. is even worse. The last thing I want to do is track down a used car and do my due diligence to figure out if its any good. I would much rather figure out what I want and go pick it up at the dealer. I can’t do that though for both of our cars so just tend to keep what I’ve got longer than I would prefer.
Good point. If the dealer doesn’t discount it on trade-in, then he has no incentive to do any preventative maintenance. (except increased risk of a highway breakdown, and that is minimal )
I’m not that picky. Before I buy I actually create a list of possible vehicles. When I bought my 05 4runner I could easily have bought another pathfinder…but I got a better deal with the 4runner. As for color - I don’t like White or Black. Pretty much everything else is fine.
Tom McCahill in his book “What You Should Know About Cars” published in the early 1960s claimed that the best transportation values could be found in used cars that were unpopular as new cars. Back in 1954 when my mother took a job and we needed two cars, the common wisdom was to buy a used Ford or Chevy. Unfortunately, the used Fords or Chevys which were any good were out of my Dad’s price range and the used Fords or Chevys he could afford were pretty well worn out. He wound up buying a 1947 DeSoto that proved to be an excellent.car. Back then, a DeSoto wasn’t a popular make and the maroon paint on the car was really faded. I was put to work with rubbing compound, polish and wax and really had the car looking great after 2 days of labor.
Some years later, I needed a pickup truck. I bought a 1950 one ton Chevrolet for $115. I really thought I wanted a half ton pickup, but a somewhat decent half ton of about the same vintage had prices starting at $500 and going up from there. This was.back in 1972. I did lose money on depreciation when I sold the truck in 1975 as I only got $110 for the truck, so I lost $5 over three years
Now if I were looking for transportation today, a Pontiac Aztek might be a good buy. The engine and driveline parts probably interchange with other GM models. Many people on this board think the Aztek is ugly. I agree, but a good well maintained Aztek might be a good transportation value. A used Chevrolet Malibu probably sells less than a Toyota Camry of the same vintage. Yet, a well maintained Malibu might be the better buy. One of the worst buys would be my wife’s 2003 Toyota 4Runner. She keeps it looking like it just came out of the showroom. When we had it in for servicing, a couple of the service personnel offered to buy it for way over the book value. However, my wife said she wouldn’t take less than a million dollars for her 4Runner.
I think I could make a lot of money if I came up with a different name plate that would overlay the Chevrolet name plate. I still think, with the demise of Olds and Pontiac, that a lot of people would buy a Chevy if it didn’t have the Chevy name plate on it. Same thing with Caddy. Too bad I think they have ruined their brands with mediocrity. I’m probably too old to start a new venture anyway so its just a thought. Just thinking though that Olds used to hide its identity so you almost had to check the VIN to see what it was. Now they’ve got the bow tie plastered all over advertising to all the neighbors that you bought a run of the mill Chevy. Just Sunday afternoon musings of an old guy.
Back to restaurants after my breakfast experience. Good ones always have an owner or high level manager on site. Everyone in the kitchen wears clean whites and the staff never comes out to the public area without a clean apron on. Sweatshirts and jeans are out and you generally get your coffee before the bill. No?
