Nice. Local. Cheap.
Yes. I hear you. The response was unexpected (at least to that degree) but I am standing firm on this one, and hear me out.
First objection: Are the insurance numbers exaggerated? Not for me. I had a dui a number of years ago so the numbers are accurate for me. Plus depending on the options you take on your policy, deductible, full tort, per person coverage, uninsured, the numbers aren’t exaggerated for anyone with the variance you can get there.
Second Objection: I want a nice car. You can find a nice car fairly cheap. I went to Auto Trader.com and found a Buick Regal, fully loaded for under four grand. This is the picture of the actual car, sitting in a showroom for $3961. I searched for cars between 3 and 5 grand within 25 miles of my house and there were hundreds to chose from.
Third objection, for the people who are worried about an accident and losing your vehicle, I get that. It’s possible. Not statistically likely, but possible. Here’s the thing. If you are banking the differences here, you have money to cover accident repairs and/or replacing the vehicle. Done.
Fourth Objection: That money doesn’t cut it. The amount is too low for a house, etc. I didn’t even get into investing that money and increasing the value of it. That was a static account at ‘zero’ interest. Finding some safe government backed bonds earning 5% interest has been fairly easy over the past 40 years. Not so much today, but in the past it was easy. And the big factor I didn’t include…
The car payment you don’t have. Again, for the sake of argument, let’s make it really low, but reasonable. How about $150. Most car payments are way more than that and even the $99 per month payments assume huge cash down and a trade-in allowance, so I’m going with $150 to be conservative. Over 50 years that adds another $90,000 to the pot. But let’s also play devils advocate and say you have to use five grand to buy another car every five years, we’ll take away 50 grand and still have $40,000 dollars to add to the $105,000, so that is, um, ..$145 thousand to buy a reasonable house.
Done.
