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Comment by Applejinx | Hacker News Reader

"Three paychecks is a month and a half of income (rent and two car payments by my fevered calculations, which never stop)"

Pay attention to those last three words. This is very important. I've been on both sides too, and to me those words are like a slap in the face: stark reality.

If you're poor enough (relative to the costs of your life) you are at a constant exhausting deficit because you CANNOT stop calculating and recalculating the mechanisms of your basic survival. Even if you're not juggling bills and having to gauge what will blow up worst, you're projecting worst-case scenarios and trying to plan against adverse situations, which will come up more often for you (example: old car problems)

"which never stop"

Consider those words seriously. You can improve the quality and performance of a person a great deal by allowing them to function as they 'normally' would, rather than in constant emergency mode.

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I noticed where the writer found out they were the lowest paid person.

This is how the wealthy class really keep people from moving up. Your pay is forever tied to what you used to make. It's hard enough to break the circuit in your mind, it's near impossible to do so with your employer.

At my current employer, they offered me a 10% paycut to convert from contract to FTE. I could not afford that, but I also can't afford to be out of work. I pushed back gently and eventually agreed to converting at the same rate. I knew other people in the same job were making at least $10k more.

The next guy to convert, was able to negotiate harder and I believe he ended up with a higher rate, despite making less then me as a contractor. He used the knowledge of my pay (and my name) to negotiate, which I would never do to someone, since I started at the bottom. This impacted my relationship with my boss.

The company did later give me a pay correction of about 5%, after 2 other team members quit for higher paying jobs. One of whom was making more then me and one who was probably making less.

>> Your pay is forever tied to what you used to make.

It's not just a psychological "avoid the subject" kind of trick. They literally refuse to give you raises no matter what. In my last job, I was likely the top developer in the company (the company had hundreds of millions of $ of runway just sitting there) and I was putting constant pressure on my boss for a raise and promotion for years (they even admitted that I was one of their top devs). Instead of trying to give me a good deal, the CTO snapped and threatened me with violence - The next day, I continued the discussion and was still pushing forward with my demands (threatening to quit) and they refused to give me anything at all. I had a nervous breakdown right there (first time ever in my entire career) and I ended up rage-quitting (it got to shouting and personal insults).

The only reason I took things this far was because I thought the system would finally yield some rewards once I showed enough initiative and ambition (backed by years of hard work and delivering great results). It didn't.

The system is completely rigged. It's an illusion that there is any kind of meritocracy. Once you really buy into all the "you control your own destiny" rhetoric and start to push yourself and others beyond the limits you thought you were capable of (when you start to impress people with your skills and ambition), you realize that it achieves nothing. It's all a big show.

"It's all a big club, and you ain't in it" - George Carlin

I only realized a bit later in my career: If you ask for more and they refuse then bail out. You can nearly always get a raise just by moving companies so find one that rewards your efforts. My current employer is the first place I have felt like my achievements were appreciated and the appreciation resulted in financial rewards. I barely had to ask, let alone beg or fight for it.

Yeah, nobody gives raises anymore. The only place ever got raises, they were tied to a union contract that just happened to benefit me (a non-member). Every other place would give bonuses or 1% "raises" that didn't cover the increased insurance costs. Pay scales were only used to hold down salary, "we can't bring you in at the top of the pay scale".

I changed companies 15 times in 15 years (changed countries 4 times) so I'm familiar with this phenomenon. It seems so artificial. Like a scheme. I would definitely have changed companies fewer times and wouldn't have left the country if I could just have been paid what I was worth.

It sounds like you took a particularly closed off and insular view of the ‘you control your own destiny’ meaning.

You left - you took control. You didn’t take control early enough however it sounds like, and started interviewing and looking for better options before losing emotional control and exploding.

You could have done that at any time. We often close off our own options and don’t really look to pursue things due to perceived risk, lack of experience, etc.

If you’d come in with a resignation letter, you might have walked out with a raise - and for sure either way had a better deal. If you’re not willing to walk away, you’re never really properly negotiating - you’re asking for favors.

The more you’re able and willing to walk away, the more of a real negotiation it is.

It can take decades to save up the capital necessary to be in this position. Some people have it by nature of who they were born from. It is what is is.

If you push yourself beyond the bounds of the expected, one good thing happens. Other companies are more willing to hire you.

Pay rises happened to me several times. Promotions within the same company, never. The way to step up, as on a proper stairway, is to also step forward.

Based on what I've heard and my own experience, raises are a pittance anyways. You have to change jobs.

My manager did the opposite, praised me for being the top dev, gave me a 7% raise, said that's the max they could give anyone, asked me not to tell the others.

The problem with being "the top dev" is there's no one to learn from, so I started looking for other opportunities anyways.

Never mentioned my old salary, and new company offered me 50% more.

And when salary comes up in general conversation the new company frequently mentions apologetically that they're a smaller company who can't afford to pay as much as others.

Raises cap out here at 6% if you're absolutely phenomenal.

I worked for at least 15 companies (of all different kinds) over 15 years and the last time I worked with a developer who was smarter than me was 5 years ago. I've been working nights and weekends on open source projects too so I think I must be near the top in terms of skills... But somehow that doesn't translate to even moderate financial success. I find myself more alone and less appreciated than ever in spite of the fact that I've never been more performant, sharper and more knowledgeable.

I can deliver extremely high quality projects (in very complex areas) at an unparalleled speed and can turn a team of junior developers into 10x developers but nobody cares and many less experienced developers disagree with my approach in spite of the fact that I keep proving them wrong over and over.

To give an idea; I've build a blockchain ecosystem in 1 year for $0 (only paid in the new crypto before it had value)... My closest competitor has been working torwards the same thing for 5 years and it cost them at least $20 million.

Companies thrive (or die) off the difference between their costs and the amount they can get paid by customers.

There are many unscrupulous bosses that will use underhanded tricks to convince people to take less pay to help widen that margin. In my experience it is ultimately self defeating and results in lower quality people staying. In the short term, it is amazing what people can be convinced to accept (been there when I was younger). It’s also amazing what people can feel entitled too beyond the economics of a situation.

I’m glad you’ve been making some inroads.

Step 1 is fixing the ‘I can’t afford to be out of work’ part - it puts you in an incredibly disadvantaged negotiating position. You’re holding yourself hostage essentially.

Sometimes this is purely psychological (been there). Everything is so stressful it’s too overwhelming to look. It’s worth figuring out a way to get the emotional space there, or you’ll always be stuck.

Sometimes it’s already insufficient pay, in which case figuring out a way to interview for the higher paying job or get credentials for a better role is the best way forward. Sometimes partnerships with others to help save on costs (a classic traditional reason for marriage and cohabitation) can be really good for everyone.

I've had to change jobs in the past. A sudden job loss would be difficult; but I would have moved on if they hadn't given me the adjustment. I'm still getting offers that are similar to my new pay. Once I spun up my jobs network it takes awhile to spin back down.

I'm not a hard negotiator and I frankly don't want to be. I prefer to give a little when I can, and I'll just move on if I feel I'm being abused. There are too many other opportunities to stick around where you don't feel appreciated.

I’m glad you’re not actually that on the edge - I hope you believe it when push comes to shove and don’t forget.

In many cases, not feeling valued means you’re not getting the value you could be - and that can literally be millions of dollars over a career difference.

> The next guy to convert, was able to negotiate harder and I believe he ended up with a higher rate

This is why salary negotiations are inherently unfair* (and salary info does get around even in companies that try to keep it secret -- if it's fair who cares if it gets around?)

* unfair because of an asymmetry: a hiring manager with any experience will have a higher n in negotiating hires than any employee will have negotiating their own comp. Also unfair because it pays for more for a skill not needed in most jobs (negotiating a feature in or out of a codebase is not the same thing). It is fair when the job calls for it (e.g. CEO or a VP of Business Development)

Don’t ever tell a new company how much you currently make. And if you’re not looking for a new company, you’re selling yourself short. Of course the current company isn’t going to give much; why would they?

Everyone here is talking about it like the company owes you something. They don’t owe you anything. And it goes both ways: you don’t owe them. So get out on the job market and get yourself what you’re worth.

Company doesn't owe me, but needs to meet my expectations of they want me to stick around. I'm always surprised when companies can't understand their high turnover.

I’ve been extremely lucky moving to the Bay Area to be someone who has not failed. I grew up poor. Today, I have enough money for rent and bills, I still think and worry about them. The endless what if’s are a lifetime long curse, and there is no cure.

No, it's that you don't have enough margin (possibly because your lifestyle expanded to keep pace with your resources?)

My parents died. They'd been sitting on property and had never tried to 'featherbed' their kids' experience, so we all grew up THINKING total failure was an option. I survived until I was over 50, very much living constantly with less than $1000 in the bank and a roof over my head (one exception to the latter, but it didn't last long)

I went, at a stroke, from that, to more than $100k in the bank (quite a bit has now been turned into equipment for my work, but not all)

If you have enough money to go for a YEAR with everything else collapsed and gone to zero… as in, however lush or humble your lifestyle, you lose all means of income, but it'll taka a year for you to burn through all your money and have none left… and then you have not lost your normal income after all… that would probably shut off the 'what ifs'.

It's a margin thing. You can continue to keep track, you can continue to fill out your checkbook and all that, but if your margin is roughly a year before you're in serious danger then you will probably not burn extra cycles worrying about your finances. And if you do, the therapy to straighten that out won't be super hard.

I bet you 'enough money for rent and bills' means you can always pay them, not that you've got 12 times that amount socked away. I absolutely wouldn't have ever had that except that my parents literally died and left it to me. I don't design my life to squirrel away 12x more money than I will ever need. I think it's unhealthy, though obviously my folks did something of that nature to create the situation.

Mindfulness, treatment/therapy, etc. can go a really, really long way though. Speaking as someone who’s been there.

Investing in yourself is absolutely key. It’s something most folks from our background have been taught to not even attempt. Not doing it just reinforces the cycle.

That phrase "emergency mode" really hits home the underlying mental mode that drives an understanding of the situation.

It only takes a few trigger words or phrases to take us back to past trauma and difficulties, like the tremors before an earthquake.

I have first-hand experience of the "caste" system that can emerge in tech environments. It was my experience that our colleagues in the lower caste told scare stories (and you see the odd firing/letting go early to feel they are real) and you feel distant from the "upper" caste. But actual factual reality in my specific experience was a basically fair system with strong accountability. I was grateful, and benefitted from the experience overall. It is hard in such environments to "be normal" because the primitive part of the brain is in "fear mode". That part of the brain actually makes the most important decisions in your life.

What is the way through? My opinion is to try and make honest real connection at a human level with your colleagues but that is actually hard to do. That is why the part of the story I found most painful was the comment about "bleached cotton". It was a delicate moment where friendship could have started but was cut off.

Lastly, I thought it was an endearing turn of phrase to first introduce the engineer as someone from Harvard. And then later refer to the person as "Harvard" (instead of the engineer's actual name or some pronoun).

The last sentence struck a cord with me. Emergency-mode doesn't just have to do with money. Asking for constant status updates on projects has the same effect. I don't understand why some companies force this on employees/teams.

Coming from a country in constant economic crisis, thinking of what ifs all the time is the way of living, then moving to a 1st world country life suddenly enters easy mode, as you know problems in a 1st world country won't ever be as bad as what you used to know, and since you are used to having issues, budgeting and saving become easier.

A lot of the things the author mentioned, I would also do, just because I don't see the point of wasting money if they are offered for free, and saying hello to the cleaning crew is just basic human decency, c'mon.

Also, the paycheck stuff, anyone who has ever cared about money would throw a fit if the money is not in their account the next day, from what I gather all the author's coworkers never had an issue in their life.

Tl;dr Poor people (and racial and ethnic minorities, and women, and queer folk) are not dumb. They just have to turn their equal cognitive resources towards things other (and more fundamental to survival) than their magnum opus/business idea/etc. Those who overcome this are HIGHLY effective, but it's not fair that we ask it of them. That's not how an effective or efficient or just society runs, and we leave money on the table and room for any adversaries we might have to maneuver when we doom whole classes of people to constant, pervasive desperation.

Well-said.

Can you blame the author for being overweight and not wanting to put up with feeling self-conscious at the gym? Being poor can push you to your limits even just trying to survive every day, not to mention be an effective worker, and being a good parent/spouse/partner/friend/family/etc to whoever is in your life. Doing 45 minutes of cardio while also feeling like an outsider is just not in the time or energy budget.

And when you worry about the possibility of someday not being able to afford food due to some extend unemployment episode, when you feel vulnerable any time you hear the word "recession" on the news, it is hard to convince your body not to eat as much as possible now, while food is abundant.

I recommend the book Scarcity for anyone interested in learning more about the psychology behind this. It was written Mullainathan and Shafir, both stars in their respective fields.

Women?

You do realize that men are more often victims of violent attacks and murders than women? Many (most?) of us are always vigilant for signs of potential violence, particularly when surrounded by groups of seemingly violent and/or armed people.

People don't give credit to luck enough imo.

Yes .. but.

I had a great education/CV early in my career, and had the opportunity to interview at some of the top most companies prior to their IPO (some when they were tiny companies). Google, Facebook, Stripe and maybe 3 more that went on to be billion dollar exits. I screwed up every single time. Either I did not take the interview seriously, or took a more prestigious academic job compared to the start up opportunity. Talk about being in the right place, at the right time and still missing out. I have barely paid off a small fraction of my starter home (no longer in the Bay area). I really wonder if it is just luck or more complex than that. (Good) Luck got me the right opportunity,but it can't just be (Bad) luck that snatched away all those opportunities from materializing? Clear, I made extremely bad decisions, missed out on the greatest wealth creation event in history, and must live with this till my end.

Edit. There is a rich-dad, poor-dad point I'd like to make. My parents were extremely bad with investments and not very educated. This made me chase the higher prestige academic jobs as opposed to the lucrative startups. Also, when my white friends (with moderately-rich parents) were buying houses at 5% down, I said they were crazy and I was paying off 5% interest education loans, saving up for a bigger down-payment, buying my car for cash, etc. My parents went through the days of 20% interest and never understood the power of leverage. They passed on risk-aversion to me. Even now, I understand the power of leverage, but am still scared to use it.

I like the phrase "Luck is when preparation meets opportunity". So when you say you made bad decisions, didn't take it seriously, etc. it sounds like you recognize your own culpability in creating bad "luck".

There is something to be said for overcoming the inertia of the (bad) ideas we may have been raised with. Malcolm Gladwell wrote in Outliers how wealthy parent raise their children to be more assertive. One of his examples was a "genius" child with a 195 IQ who couldn't reach his goal of a PhD because of the ingrained passivity his parent taught him, which caused him to accept limitations he was told without questioning. To that extent, if we can't overcome those bad ideas, we're creating bad luck for ourselves.

And please don't take this as me piling on, because it's fairly clear from your post that you are still bothered by this. I imagine it's because you spend a lot of time imagining "what could have been", but to quote Theodore Roosevelt "comparison is the thief of joy". If you can get to a point where you're grateful for what you have rather than mulling over what you missed out on, you'll probably be happier for it. Genuinely wishing you the best of "luck" in the future.

Thanks for your kind words. I took it in a positive light, and appreciate your thoughts.

I usually bottle it in, but wrote the above post as a release. I'm definitely luckier than a good fraction of the planet. I also truly believe that at some point, we really need to stop blaming our parents, and take ownership for our own actions. It is just really hard some days, to face up to the missed opportunities.

Now that I have kids, I imagine advising myself as if I was advising my kids at some point in the future. That has really worked wonders. I'd advise my own kid to say c'est la vie, and move forward in life with optimism and confidence :)

Agreed here. I quite openly will say I’m lucky to have an intense interest in computers and to develop enough skill with them to get a job in the high paying tech industry. I didn’t choose what my passions, talents, or skills are after all.

I’m always surprised that people tend to take exception to this, saying it’s nothing to do with luck, I worked hard.

That’s also true. I did and still do work hard.

But that doesn’t invalidate the fact that I had zero control over the fact I happen to live in a society that relies upon, and therefore places a high value on, the area I happen to be skilled in. There’s people with great talent in other areas that are very hard to make a living from.

Much of where we end up in life is determined by luck and chance. That doesn’t mean we’re not also working for what we have. Just means there’s multiple variables, life is unpredictable and isn’t fully within our control, and if we happen to be highly talented at something society places great value on there’s an element of luck at play.

OP here: more like, if people's resources are NOT equal (and people's abilities are not really fungible: you can have someone who's not that great but has a novel POV, or a helpful trait) then this tilts things harshly against them.

You wind up with people who are not the brightest and greatest, burdened by massive cognitive overhead, hindered rather than groomed for success, and then as a society we turn around and look at the ones who were a bit better at stuff and point to their opulence and go 'look how MUCH better this person is!'

People don't have to be equal for this to be a concern. It's a matter of whether you think society's best served by finding the most exceptional person and then having them rule everything. Even if you were able to do that, even if the person IS quite superior, they will never measure up to the bar society sets for them. They're good, but they're not nearly as good as their wealth would make it appear.

And you look at poor people or people who are flat out failing at life. They're not good, but they're not NEARLY as not-good as their poverty would make it appear. You're seeing them at their worst, and it's a wasted resource on a colossal scale.

So this is basically the argument for 'create UBI under capitalism and dominate the world through the proliferation of cool GDP you create out of all your small business people'. Basically, 'one Elon Musk is useless compared to ten thousand folks a tenth as good as him'. :)

In many places around the world, poor people don't have "old car problems".

I think people wildly over-estimate the costs of driving an older (say 5-15 years old) car and so are prone to over-pay for a new or newer car, believing they're making a good choice based on flawed data. (They remember the time they had to dump $1200 into repairs into some old heap that isn't even shiny anymore. They don't remember that for the last 24 months in a row, they saved $450 in payments, $200 in depreciation, $125 in insurance, and $20 in property/sales taxes each month. They could have a $1200 repair twice a year and still come out way ahead.)

We drive older cars. I can think of 3 times in the last 25 years where we've had car trouble that interrupted or hampered motoring (a failed battery, a failed clutch release bearing, and an electrical short). The battery is a 20 minute swap; the electrical short indeed sucked [because it required a tow home and took me most of a day to find where the short was]; the clutch release bearing left the car limpable and she was able to drive it home with quick instructions on how to start the car and drive it with third gear selected for the whole trip.

On one hand, I'm happy that the market (read: people) wildly underprices used cars, because it makes for cheap motoring for us. On the other hand, it frustrates me that people's third largest expense category is higher than it has to be and many of them could improve their situation by better optimizing this category.

tl;dr: If you want cheap[er] motoring, buy a 4-8 year old Toyota or Honda and drive it until it's 15-20 years old. Drop collision insurance as soon as you've saved enough from this strategy to replace the car. Add that savings to your snowball.

Thank you! The days of those stereotypical used cars that fall apart at 100,000 miles are pretty much over. A 10 year old economy car, maintained basically (not obsessively), will probably outlast your need for it.

Yes, a 1980s turbo Porsche or 1990s M3 will eat $10K+ a year due to constantly breaking. Not nearly the same as a 2010 Toyota Matrix, which you can probably get for $5000 and drive forever.

(Consider also: just not owning a car. Bikes and transit for the day to day and occasional outlays for wknds in the mountains is cheaper than owning any car.)

That requires living in an expensive city, at least in North America.

The savings of not having a car might make up for that. I definitely don't miss having one.

Worth considering in many places (especially due to the additional hassle of having a car in some cities) but not viable in others, at least without considerable hardship.

There are no universal solutions... Car ownership shouldn't be considered as the default option, either. I tend to think people overestimate the 'hardship' by not fully considering options to use money to overcome them. Also, daily cycling - even if not strenuous - has excellent health benefits.

For example, you can get a really nice cargo bike for a fraction of the yearly savings of not owning a car, which will last for decades and solves the 'hardship' of handling groceries. This won't work in every case (recall, no universal solutions), but it significantly shifts the decision boundaries.

My fleet consists of a 'fast' sporty bike, a folding bike (for day to day, connecting with transit, taking on train trips, etc), and an old xtra-cycle cargo bike. The bikes were built/bought 15, 5 and 12 years ago, respectively; basically free once amortized. And since I'm saving ~$5000/year by avoiding car ownership, I just try not to feel shy about using 'expensive' one off transit solutions when it's substantially more convenient.

Your math is off - for TCO you should be counting financing costs, not the payment itself. You don't really get away from financing costs by buying cash, incidentally: then they become the opportunity cost of not having the cash invested.

I think people wildly overestimate how much you can save by driving a used car. Used cars are frequently overpriced due to demand for lower up-front costs and lower payments. Edmunds' five-year TCO for a five-year-old Corolla LE is $27095, for a new one it's $26634.

The cashflow differences between buying an $8K car for cash and a $40K car with 20% down are the entire monthly payment [plus the required collision insurance], not just the interest charge portion.

I'd wager that poor people are generally running their lives on a cashflow basis, not on an accrual basis. When I was a near-broke college student, that's how I thought.

With regard to the savings of paying cash being offset by investment returns foregone, I also agree with that, which is all the more reason to save the $32K as above.

Yes, that difference, as I pointed out, is one reason why sensible used cars are overpriced. (Another is the "market for lemons" effect)

Now you're comparing a $40K new car to a $8K used car, which is not a reasonable comparison. Yes, used cars will save you some money, but they will generally cost you more money than driving a new Corolla or Civic. Poke around on Edmunds' TCO calculator. The problem with your argument is that you can save more and more money by imagining buying an even more expensive car to compare to. I mean, you could have bought an $80K car with 10% down, right? Now you saved $72K!!!

> but they will generally cost you more money than driving a new Corolla or Civic

OK. Sorry. Your comment annoyed me enough to look up my actual expenses which I've been logging since late 2007, as opposed to hypotheticals.

Between then and now, I've spent $6247 on maintenance and repairs of my cars. Note this includes standard stuff like oil changes and tire replacements. That's about $480 a year. If I extrapolate and go back to when I bought the first car, the estimate would be $8649 since 2003.

How much did I pay for those two cars? $11200 total.

They were reliable. I did two cross country trips in them, without worrying a bit. I didn't rent cars for road trips.

So a total cost in the last 18 years of $19849. Had I bought new, and included standard maintenance[1], I surely would have paid a lot more. A new Camry in those days would already be over $20K. A Civic around $14K.

And of course, insurance on old cars is cheaper. You'd think it's the other way round, but it isn't.

Obligatory disclaimer: Research your used car models before you buy. If you don't, it will cost a lot more.

[1] As a reference, my wife's almost new car has cost $3500 in repairs/maintenance in only 4 years. Yes - even new cars can end up being costly to maintain in just a few years.

Please don't apologize and please don't be annoyed. Like I told "sokoloff", I was you. I get it. "In this house we buy used cars for cash and drive them until the wheels come off." So of course I enjoy this topic.

Let's look at your numbers. Say you bought two new Civics around 2003 for $28K total. Your maintenance & repairs should not be any higher for a new Civic than for any used car I can imagine. Let's assume gas is the same, and neglect transaction costs, finance costs, etc for now. So you have a difference over eighteen years for two cars of $16800 or $933/year. Per car, you saved $467/year or $39/month. Note we are also not considering that you could have kept the new cars on the road a few years longer. Also the insurance savings is minimal - figure you save $500/year for the first five years and then it's about the same when you go to liability only. That's another $139/year over 18 years or $12/month. Yeah, that's not nothing, but it's not the TONS OF MONEY that always gets mentioned in these discussions.

Your wife's repair and maintenance costs look more in line with average than yours. Does she put a lot more miles on her car than you put on yours? I do agree that if you put a lot fewer miles per year on a car than average, a used car starts looking like a much better deal (see below).

> Per car, you saved $467/year or $39/month.

> That's another $139/year over 18 years or $12/month

> Yeah, that's not nothing, but it's not the TONS OF MONEY that always gets mentioned in these discussions.

It's not tons of money, but as you said, it's not nothing. Saving over $50/mo is definitely very significant for me (I must have grown up poor). As I do keep track of all my finances, I know that most of my savings come from saving $50/mo here and $50/mo there.

And I was poor for many of those years - I was a grad student.

A few other points:

You quoted 28K for 2 baseline Corollas/Civic. It's a bit more than that since the $14K is 2003 prices. I bought my second car in 2011. The lowest Civic was $16.6K then. And if you get the LX (which I did get, albeit an older model), it would be $18.5K

> Note we are also not considering that you could have kept the new cars on the road a few years longer.

The counterpoint is that with used cars, you can change them every 7 or so years and still be cheaper. This way you have more variety.

Finally, there is a bit of cherry picking: You used new Corollas and Civics as your benchmark. As someone who has owned both a 2003 Civic and a 2003 Accord, there's a world of a difference when it comes to comfort - I always needed extra back support in the Civic and it still caused back pain. I never needed it in an Accord.

With older cars, the price difference between a Civic and an Accord is $1.5K max (similar for Corolla vs Camry). So if you add $3K to my total, your equivalent would be about $10K new, as 2003 Camrys/Accords sold for $20K vs $15K. That's another $32/mo.

> Your wife's repair and maintenance costs look more in line with average than yours. Does she put a lot more miles on her car than you put on yours? I do agree that if you put a lot fewer miles per year on a car than average, a used car starts looking like a much better deal (see below).

I think it's just that newer cars are costlier to repair/maintain.

Well, you brought up the Civic cost in 2003. A new Corolla is a benchmark for frugality: few cars, new or used, beat it for total cost of ownership. (with some assumptions: 15,000 miles/year etc). Note I don't own one and probably never will. The Civic is a little less frugal but similar.

It's fine that you like spending money on cars and prefer to spend more for a larger, more comfortable car. You're not minimizing your costs by buying used - you're just avoiding spending even more money. Also remember, up front cost is not TCO. Let's look at Edmunds' numbers instead of ancecdotes: a five year old base Accord has a five year TCO of $29,110. A new base Corolla has a five year TCO of $25,679. There's your "over $50/month". Fifty bucks is fifty bucks right?

Yes, it does seem we're responding to different points.

As for Edmund's TCO vs anecdotal data from my side: I can understand your viewing it that way, but of course, I'm not going to discard almost 15 years of personal data I've collected :-) I think one of the problems I've always had with the TCO is it simply has no numbers for my use case (buying older cars but with low miles).

The other problem is that whenever I look at the TCO numbers, they seem absurd. I just looked up the numbers for my wife's newer car, which was almost new when bought, and the Edmund's numbers are bordering on absurd. We had $3500 in maintenance + repairs over 4 years (and really it's $3000, as $500 was for an extra set of tires just for snow - not really a repair or maintenance). Edmunds estimate, for that vehicle, for the same span of years is $6200 - over double the reality. I've not had $6200 of repairs in a 4 year period even for my very old, used cars. We're not stingy on repairs and maintenance - we follow the recommended schedule. In fact, her car had two expensive repairs that are probably not common for her model, and I would think the amount we spent on it is above the norm.

And she drives her car more than 15K/year.

This is why for me, having actual, real data vs some weird aggregate from a web site is more meaningful. Edmunds may be good at the depreciation amount, but I question where they get the maintenance/repairs estimate.

I agree you should take Edmunds' numbers with a grain of salt - they tend to be extremely pessimistic about European cars, for example. They probably also figure on your replacing tires, batteries, etc with OEM. They don't say but they might be taking repair costs somewhere else off the distribution than the mean or median to produce a budgetary number.

Also, are you going by age or by model year? Understand that the TCO they give is for the next five years, as if you bought that model year used now.

You could just have a car whose repair costs vary a lot.

The problem with your data, given your use case, is that you can't really compare it to anything but more of your data. I'm sure if we could see how the sausage gets made there'd be plenty to criticize on Edmunds' TCO calculator but it at least provides a way to compare different new and used cars, and it breaks down the numbers in ways that allow you to work with them a little - or compare them to experience - if you are skeptical. It's also not too hard to do a similar model for comparision for different use cases (driving only 5k miles per year brings your TCO on a reliable older car way down, for example) - you'll have your own estimates for each line item instead of their data - if you want to compare against their numbers as a benchmark.

I took the average cost of a new car in 2020 or 2021. Make it a $28K new car instead of an $8K used car and you're still saving a ton of money even with a few repairs along the way.

I know plenty of people who owe money other than a mortgage who are driving $50K+ cars/trucks and sometimes have more cars than drivers in the household (and both of those blow my mind for people with non-mortgage debt).

Why not compare it to a car you scrounged for free? I mean, I'm not just arguing with you to win points. I was you.

By the way. there are other problems with your math: you're double-booking the cost of the payment and the depreciation of the car. Really, play around with a total cost of ownership calculator like Edmunds'. It will be enlightening.

Let's look at the F-150, the most popular vehicle in America. For the regular cab XL 4WD trim level, a 2020 model is $38K (close to your $40k) with a five-year TCO of about $44K. A 2015 model is $24K... with a five-year TCO of $41K. That's a difference in TCO of $50/month. Hey, if you can save $50/month, do it, but don't tell me you're saving thousands every year.

One problem with that calculator is that it "rings up" the depreciation after 5 years, in effect assuming you'd sell the car at that point. Much of the savings here are driven by keeping the functional car for 10+ years, not having to carry collision insurance on a car that's too expensive to write off, paying less in transaction costs and taxes, etc.

It's not the calculator is "wrong" in answering the question it asks, but that it's asking the wrong thing. Very few people want to buy an 11 year old car, so buying a 6 year old car and selling it 5 years later and doing the same thing again is overly penalized vs buying a 6-year old and selling it 10-15 years later (for much less), but only doing that once instead of two or three times.

> Why not compare it to a car you scrounged for free?

Because I can't repeatably find a reliable car for free. I can repeatably find many reliable cars for $8K in any city in the US. We paid $7500 for our 2005 CR-V in 2011. It was in overall great condition with high miles (165K-ish). It now has 220K miles on it and rust will kill it long before miles do (New England road salt).

Edit to add: I agree that my method above was double-counting depreciation. I should have stuck to cash items rather than including a non-cash item.

Yeah, if you want to take it out past 5 years, you can make your own estimates. You just won't have the benefit of Edmunds' data. You are right that you will save on transaction costs if you do not buy a newer car every five years. You're also a bit of a special case in that it seems you only put about 5,000 miles per year on a car. I'd estimate your TCO on that car to be about $2K/year, which is pretty frugal. It wouldn't make sense for you to buy a new car, because you'd be losing depreciation to age faster than you'd be wearing the car out. At 20 years, you'd have only 100,000 miles on a car that would be essentially fully depreciated.

It is pretty tough, though, to get the cost of ownership on a car driven 15,000 miles/year below about $3,500/year. By comparison a new compact will be $5k to $6K per year in total cost of ownership. So if you are wondering why gold doubloons are not accumulating in the chests in your basement that much faster than they are for the guy who drives a new Honda Civic, that's why!

> You don't really get away from financing costs by buying cash, incidentally: then they become the opportunity cost of not having the cash invested.

I will never understand this logic. You do realize that this is investing on margin just with better conditions? At this point we are assuming that you already have an emergency buffer and no financial difficulty whatsoever.

The reason why you should always finance your car even if your income is low is that you can build an emergency buffer that you can use on anything. If you have $30k in your bank account and buy a $27k car then you are only left with 3k. Any potential financial problems will force you to find a loan that very day. If your monthly payment is $500 your emergency buffer will last for years. If you invest that money you will have to compensate for any losses during that time frame by having enough income, it's as if you had $0 savings to begin with.

No, you are taking out a mortgage on a depreciating asset and investing cash at your level of risk tolerance. If your level of risk tolerance is a savings account at 0.5% so you can always have an emergency buffer, that's fine.

The argument is that to make an apples-to-apples comparison of total cost of ownership of one car and another, you should always include financing costs. They are basically your lowest cost of capital. Think of it this way: even if you're going to pay cash, leaving the finance cost in allows you some basis of comparision between the cost to you of putting say, $30K cash into a car versus putting $20K cash in. It's not exact but it's a useful simplification.

They also don't necessarily find themselves in places that are entirely car-dependent. You can't really get by without a car in most of the US, and it's by design. Even in big cities.

Could you explain what point you're trying to make?

I guess they mean that in many places around the world, public transportation is more usable, so people don't need cars.

That's true too, the point I wanted to make is that in many places, poor people can't afford any cars.

That's what you literally said, but why bring it up?

I'm just trying to put into perspective "poor people around the world" vs "poor people in the US". From my pov, if one can afford a car, it's a little rich to call oneself poor when compared to all the people who can't afford basic necessities. And no, a car isn't a basic necessity, not even in the US.

In most places in the US, if you don't have a car, you can't get to your job. Or you can, but it involves a fragile set of bus transfers that take you 2 hours (when driving would take 30 minutes) each way, and if you miss a transfer (because the transfers don't actually line up with any reasonable schedule), you're late and risk getting fired. So instead you add a 30 minute buffer in the morning and waste even more of your time.

Or you can walk 5 miles each way. Maybe it's good for your health (though the winters might be brutal where you live, and your route might not have sidewalks, and walking into work covered in sweat in the summer might not be allowed where you work), but that's pushing 2 hours each way as well. Getting a bicycle would reduce the time requirement, but most streets in the US are pretty bike-hostile, and you still have the weather issues to contend with.

Sure, technically a car is not "required" in that scenario, but people who are poor essentially have their time as one of their few precious assets. Saving 3-4 hours a day on a commute could mean picking up another job[0] that helps reduce financial insecurity just a little bit, or allowing a parent to spend a little more time with their kids.

I think people just really don't understand what it means to be poor. I have (fortunately) never experienced it, but have heard enough first-hand accounts to get the gist of it. Everything is harder when you don't have money. Everything.

[0] And that's a whole other issue, that so many jobs don't pay a living wage, requiring someone to hold down more than one just to make ends meet.

Agreed that everything is harder when one doesn't have money. Agreed that with kids, time is a lot more precious.

But in general... walking 5 miles each way doesn't sound impossible? Back before the pandemic, I walked 6km each way to a social gathering every week. I often walk errands up to ~8km each way.

Cycling... I used to cycle to work 12km each way year round, in temperatures as low as -10°C. Challenging? Yes (I didn't have especially fancy clothes and my hands were freezing). Impossible? No.

Why aren't scooters more popular in the US? Does it have to do only with the weather?

> And no, a car isn't a basic necessity, not even in the US.

This varies considerably. There are many places in the US that are entirely car dependent (nothing within walking distance, and little to no public transportation).

or someone that's considered poor, can't afford one.

Easier to do in some places than others.

Public transport is nonexistent in several places here in Texas for example - you have to have a car (or know someone who does) to get to your job in the first place. But commuting puts wear and tear on the car, especially if you can't find work particularly close to where you live.

I read a book once on extreme early retirement that advised to pick your place of work and house so that they were within walking distance of each other and also walking distance to a grocery store. The quality of the work and even your income weren't as critical as this. The idea being the goal was to finish work as soon as possible in your life when investment income could take over. Live in a one room rental, have one plate, a pot and a fork. Be a Spartan. That was the gist of it. Retire in five to ten years. Was compelling on some levels but orders of magnitude more difficult when you consider trying to bring a spouse and family into this.

That's rich people advice. Poor people know that wages can vary so much from place to place.

I would find that kind of Spartan life to be pretty bleak and depressing. Sure, some people would like it, but I expect most people would not.

Or since this is tech we’re talking about, just work from home then live where you want, no need to be stuck in a tiny apartment in a big city.

Those have "no car problems" that are objectively worse than "old car problems", since the (often disastrous) consequence of the later is throwing some of the former at you.

Yes, there are some places where public transportation both exists, doesn't take most of your day, and is cheaper than cars. Those places must be great, but as a 3rd worlder I barely know them (it's not a huge problem for me, personally, it's just enraging).

The really poor people can't afford cars.

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