Yikes!!!
This new truck costs around $50,000 to purchase and it’s not even the most expensive truck on the lot. This price is actually fairly average for most of the trucks on this new-car-lot.
Now, it’s a nice truck! I’m not really a huge fan of trucks because of their terrible gas mileage and general impracticality for the typical person, but it is still very nice.
However, $50,000 is way too much money to spend on any vehicle that will be worth around $15,000 in 5 years.
Just for fun, I used a calculator to determine the monthly payments if I decided to buy this truck. I assumed that I would get a six year loan at a 5% interest rate and found that my monthly payments would be $805.25!
It costs $805.25 per month to drive this vehicle around for six years!
For me, this is way too much money to spend on a vehicle. If I invested that money and earned a 7% annual rate of return, I would have approximately $71,000 after six years.
So that $50,000 truck really cost me $71,000!
That seems pretty scary, but the scary part of this financial disaster hasn’t even happened yet. The scary part is what happens after 30 years of investing this money. After 30 years, this investment would be worth approximately $362,000.
This $50,000 truck costs Future Me $362,000!
Future Me is really sad.
Present Me tries to make Future Me happy by buying a cheaper new vehicle, but a $25,000 car still costs Future Me $181,000.
Future Me is still really sad.
Unfortunately, most people, including me, have designed their lives so that a car or truck is a necessary evil. We need to drive to work five days per week and we need to bring our kids to soccer practice or piano lessons. So … we still “need to” have a car. For me, that’s where a site such as Craigslist comes into play.
My wife and I have purchased our four most recent cars from people that we found using Craigslist and we have been completely satisfied with every purchase. I think that using this site has saved us $2000-$5000 (in Present Me dollars) on each car purchase and it only takes about 8-12 hours of total time.
In my next article, I talk about how I buy cars using Craigslist and share all of my used car buying experiences. What are some ways that you save on transportation? Let us know in the comments.
And thanks for reading!
~Nathan
Let’s keep living a great life … with the help of money. So what’s next?
- You can travel for free by using rewards credit cards.
- You can get motivated and get out of debt.
- You can check out the next post or the previous post and continue to learn.
But no matter what you decide to do, let’s leave the ordinary behind and take action today!
