The road to riches is this simple: Drive a crappy car (2019)

As for the basketball player making millions driving a beater, he's a hell of a lot smarter than the pro athletes who spend 20 years driving Lambo's and living in $20 million homes then retire broke.

There is obviously a point between those extremes where you are making good money and enjoying (reasonably) good things but erring on the side of driving the paid off car is almost always better.

And this isn’t just a anecdotal. The Corolla has been a well rated reliable car by many sources for years. It’s just boring as hell.

I drive a 19 year old Toyota truck I bought used a couple years ago for $8500. If I'd bought new I would have paid nearly twice that much in payments over the 2 years I've owned it and be looking at another 5 years of payments ahead of me.

Even if I have $8000 in repairs every year for the next 5 years I'm way ahead. But most likely this truck will last me another 10 years or more.

This fear that "maintenance cost" ramp up ridiculously is a fiction dreamed up by car dealers.

Definitions of crappy vary as do things like whether to go with the relative predictability of a new car or the probable better value of a used one. But it’s certainly true that, for a lot of people, car costs that aren’t really required for functional transportation can be a big chunk of discretionary spend.

Unfortunately, certain countries, such as Canada, are very hostile to cars. The weather and road salt take a toll.

The article doesn't suggest that. The article is in MarketWatch, most people in their target audience are able to make ends meet and are looking towards their future. The idea here is if the reader is earning $100k/ year, drives a paid off Honda Civic for 10 years, they are going to be significantly better off in 10 years than if they buy a $40,000 Camry every 5 years.

> The author also misses the major point that buying a car is not lighting money on fire. Yes, it does depreciate, but you also get value of out it in the form of transportation, pleasure, and other utility.

It's not just about depreciation, you are also paying a ton of interest, increased insurance, and increased taxes/ fees in most states. Yes, there is a ton of utility, but you can get that same utility for 1/8th as much buying a solid used car or just keeping your existing car nice for another 5 years.

The example of the guy making millions driving a beater is extreme, but the number of people needlessly paying 10-20% of their income on car payments is quite high and that's the people this article is targeting.

I second this, my work is 10 minutes away cycling, city centre is also about 10 walking.

I know that not everyone has this privilege but it really puzzles me how most of my neighbors own (and use) cars to perform pretty much the same commute.

Taking money out of context for a bit, when I used to own cars they also took a significant amount of time and attention from me. I know it may not be for everybody but switching to bike+bus+walk has been a liberating experience for me as well.

Driving a beater won't make you rich, but buying new cars every 3 years makes you a lot less rich. When you have a $600+/ month car payment and you get laid off, it's a lot more stressful than when you own your car free and clear.

I don't buy beaters, but I do buy cars, pay them off quickly, and enjoy them for 8-10+ years. When you don't have a car payment you have a lot more discretionary money to enjoy on nice things and it's a lot easier to save for retirement.

- Spend less than you earn. The less, the better.

- Invest in equities, preferably low cost index funds.

- Follow this pattern for at least 25 years.

Many people have followed this formula with great success. Read more at Bogleheads.org

Seriously, don’t spend money you don’t have on depreciating assets. Only borrow to buy appreciating assets (housing, education, sometimes business expenses for most people).

Average new car in the U.S. is $36k. Maybe he was just rounding to the nearest $10k?

https://www.cnbc.com/2019/10/22/car-prices-are-rapidly-incre...

Of course, that's according to Edmunds, so it might not be correct, and, moreover, the median would be less sensational.

So for instance driving a Corolla when you are making 500k a year and you are passionate about cars doesn’t make much sense. Living in a nice 500k house might make sense because it is adequate and leaves your money available for investment in higher performing things.

I know what numbers I want to hit in 10 years. Anything beyond that is available for use living My best life.

The good part about buying older cars is that there's information out there about which parts are likely to fail and when (and you can probably assess the cost of repairs too, which you can then factor in to the price). And if you can take it for a test drive, take a peek under the hood, and check for stamps in the service book, you have a decent chance of weeding out the worst pieces.

I can't think of many things that would cost several thousand dollars to repair, except for some of the biggest jobs like gearbox or engine replacement. Good thing that modern engines and gearboxes are quite reliable and it's not common for them to just fail without any signs. Bad clutch can be expensive but I think you should be able to tell when it's about to go.

So when you buy an old car for, say, $7k, you're taking some chances and might end up needing to spend a few extra thousand on repairs, but chances are it'll be just fine with routine repairs. That's almost always going to be more cost effective than dropping $15k - $20k on a relatively new Toyota, let alone some more expensive car.

Pay cash if you can, maintain it well, and drive it into the ground.

$200 a month tossed in a decent investment over a typical working life will yield something like $200,000 by late middle age. That can be the difference between near-destitution and reasonable comfort in retirement.

I had out-of-control spending until I did a detailed audit of my finances 5-ish years ago and I changed my lifestyle in lots of ways: cheaper car, very few restaurants, cheap vacations, cheap hobby, cheap mortgage... it literally has saved me about $1700 per month (yes, literally... I earn a good amount so I had lifestyle creep!). This savings promptly goes into an investment account. That amount over 20 years could become $775,000 if invested!

My last car was a 2004 STi, I bought it new and drove it over 14 years. Good car. I sold it for a 10-year old (2008) Lexus IS F. Both good enthusiast cars, the Lexus had low miles, so I'm hoping to get quite a few good years out of it, too.

Let's say for sake of simplicity you spend $500/month on a nice car instead of $200/month on a basic car. The difference of $300/month invested for 30 years at a 6% return is a whopping $292,353.89

IMO a better strategy is to change your values. Becoming the kind of person who doesn't value a nice car could be a very valuable asset.