I teach you how to master your money in less than 5 minutes per week. I am the host of The Personal Finance Podcast with 400K downloads monthly and the Founder of Master Money.
You Paid What?!
Published 11 months agoΒ β’Β 3 min read
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Whatβs Poppinβ,
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This is the Master Money Newsletter. The Newsletter melts away money stress faster than butter in a microwave.
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Hereβs what we have on deck today:
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π Read: Why Cars will Destroy Your Wealth β
ποΈ Listen: Should you Pay Cash or Finance a Car?
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The New Jeep Wagoneer is $122,480.
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All for a Vehicle to Help Push Your Kids Around. The sad part is, I see them EVERYWHERE.
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Let me show you why making this mistake in your 30's could cost you MILLIONS. β
First, we need to understand that this is just MSRP. You will pay way more for this car. Letβs look at the numbersβ¦.
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MSRP: $122,480
Down: $10,000
Sales Tax: $10,455.00
Registration + License + Dealer Fees: $3,300 β
Not to mention the financing costs associated with the SUV: β
It doesn't end there. We have to look at financing costs as well.
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Monthly Payment: $2,122.64
Total Loan Amount: $112,480.00
Total Loan Interest:$14,878.18
Total Cost (price, interest, tax, fees):$151,068.98
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Yes, you read that right. Over $150,000 over the term of the loan!
This does not factor in additional costs.
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-Your insurance will go up: $150 a month
-Gas at 18 MPG: $200 a month.
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We have not even touched on maintenance and depreciation.
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All of this to look "good" in front of other people. β
Here's the sad part. β
Those who are financially uneducated will congratulate you. β
Those who know a few things about personal finance will think this purchase is absolutely insane.
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The biggest reason is because they understand opportunity cost.
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$150,000 invested in the S&P 500 over 30 years without adding another dollar would be $2,617,410.34 (based on historic returns).
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The trade-off is MILLIONS.
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There's nothing wrong with having a nice car if you are hitting your investment goals and have a high income.
But if you are whipping a car that costs almost the same as a house 7 years ago, and you make $100K a year, you are making a big mistake.
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Do not put your net worth in depreciating assets that go down to 0. β
Don't act rich until you actually are.
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Life's a lot less stressful if you follow those rules. β
Todayβs newsletter is brought to you by Empower.
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βEmpower is a really helpful free tool for keeping track of your money. It's easy to use, and it helps you see how much money you have and owe. With Empower, you can make smart choices about your finances and reach your money goals.
βCollaborative Fund explores personal and philosophical approaches to debt, offering insights into how different types of debt can be both beneficial and detrimental depending on context and usage.
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Investing $250,000 π°π
βFinancial Samurai discusses strategies for investing a significant sum of cash, presenting a detailed plan based on current market conditions and personal financial goals.
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Jobs Offering Pensions π’π
βLifehacker examines the increasingly rare benefit of pension plans in the modern job market.
High-Performance Book Club π
I get a ton of questions from listeners and readers as to what I am reading. So we decided to let you know via the newsletter. The High-Performance Book Club will be a way to share this. If you want to be Elite in your career, business, or with your wealth, then welcome to the club. If you would like to see our previous picks, you can find them here.
I teach you how to master your money in less than 5 minutes per week. I am the host of The Personal Finance Podcast with 400K downloads monthly and the Founder of Master Money.
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