What is the one financial advise nobody follows?
Never buy a new car.
The 2 most expensive things you are likely to buy is a house and a car.
You will probably buy a few houses in your life, but they will tend to go up in value, and since they go up in value you will make money with them. Woo Hoo!
You will likely have many cars in your life, and you will lose every penny you ever spend on a car. If you buy a car for $30,000 you will sell it in 5 years for $12,000. You just lost $18,000.
You will repeat this a lot in your lifetime and you will lose every time you buy a car. The best thing to do is spend as little as you possibly can on a car!
The other side to this is the car loan, many car loans have very long terms these days, sure the rates can be low but if you are broke you will likely pay 12+% on any car loan that you get. So not only are you going to lose money on the car you are paying the bank for the privilege of losing money.
The best thing to do is to buy a car with cash, or make sure you can pay it off very quickly. Keep that car and just repair it.
Most people like to use lots of excuses:
- The paint is bad
- It will need a new timing chain soon
- It needs a lot of work
- I deserve a new car
- I want something safe
- We need more room
- I can’t go on a long trip with this car.
Sure there are times when you may need to change cars, new child, starting a business or whatever. But you can keep repairing cars for a long time.
Don’t let a repair of $3,000 “make” you spend $20,000! Because guess what! By the time that new car needs the same repair the old car will need the same repair! So you are only delaying repairs, constantly.
If you do need to buy a car, it’s best to buy 3–5 year old car with cash, as few times as you can. If you were really smart, you would invest $400 a month, the same as that car payment would have cost you.
By: Randy Pratt - Real-Crypto Investing Educator / Quora (March 29, 2022)
