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How Cars Affect Your Financial Freedom

How your car dramatically affects your financial freedom

I had a revelation nigh cars that has caused me to non genuinely aid virtually what mine looks similar.

It’s not that I don’t want a really fast car, it is just that there is something I want a bit more: financial freedom.

Is whatever motorcar worth your financial freedom?

The matter I comport concord noticed is that thence many people give up financial liberty for their whole lives alone because of the decisions they construct amongst their cars.

I know it sounds like a bold arguing, but I mean value it is frightening how true it is.

For most people, a auto is the s-largest purchase they ever build. Second entirely to their topographic dot.

The huge difference is that level if they construct a bad topographic point purchase, more than ofttimes than not speaking, it testament give upwardly inwards value over fourth dimension.

Car Depreciation, on the other mitt, is a brute. Regardless of whether yous purchase a novel or used automobile, it is going to acquire downwardly inward value, but the telephone commutation is how fast does it acquire downward in value?

So, if you compare a new car vs. a 6-year-old car, the new car will lose a couplet chiliad dollars in resale value each year. The 6-year-old car, on the other hand, will lose several hundred each solar twelvemonth.

If yous think most it from an investor’s perspective, it is tardily to come across that if yous must select an investment that loses value, you lot testament in all likelihood pick the 1 that loses LESS each yr.

What if your machine selection costs you lot $1 meg?

Years agone a friend of mine illustrated this concept perfectly.

He bought a 10-yr-sometime Ford Taurus for $500 from his grandma. He drove the motorcar for four-v years and together with so sold it for $800.

Not a bad investment at all.

It is an particularly sound investment when during the same menstruum I saw friends purchase brand novel $25,000 cars likewise merchandise them inwards when they got sick of them a dyad years afterwards.

My kickoff friend had a monthly payment of $0 for v years every bit well equally sold his automobile at a plough a profit, earth the other friends were paying $400+ a month on a automobile payment also ended upwards selling their cars for less than they owed.

My first friend had that $400 to invest each month. The amazing thing is that one simple decision very well could convey made my acquire-expire friend $1 meg in retirement.

That is why I am okay with driving an older automobile. The new automobile odour is prissy, but non worth $1 1000000.

Should I never buy a novel motorcar?

Dave Ramsey would say yep. I don’t necessarily experience that strongly most it, but financially speaking it isn’t the best decision. I do realize that at that topographic call for are other “nonfinancial” factors that could alive affecting the determination.

But, I testament say this – IF you do purchase a novel motorcar…

  • Research it (I like consumerreports.com the best) in addition to uncovering a reliable 1
  • Maintain it
  • Take great attending of it
  • Plan on keeping it for a decade

These are the best ways to learn your coin’s worth out of it.

Break the auto-payment bike

The primal is to pause out of the auto payment wheel. Far too many Americans believe that they will ever involve hold a automobile payment.

The goal should be to get the cars paid off as fast as possible, then start saving to purchase the side yesteryear side one with cash.

It is a overnice feeling to bring all your cars paid off inward addition to alive inwards a topographic betoken where you lot give the axe salvage $400 a month to purchase your side past side motorcar with cash, rather than using that $400 to pay off a loan.

We select been fortunate to live able to purchase our in conclusion 2 cars alongside cash, in summation to I tin tell you it is really fun. I hope you lot acquire to do the same earlier long!

Linda also I pop off along this theme inwards the video below, where nosotros combat “novel motorcar scent” as well as why we maintain to avoid buying new cars.

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