
The road to riches is this simple: Drive a crappy car (2019) - indigodaddy
https://www.marketwatch.com/story/the-road-to-riches-is-this-simple-drive-a-crappy-car-2019-06-21
======
paulpauper
A story very similar to this involving that same Toronto Raptors basketball
player was submitted just 2 hours ago
[https://news.ycombinator.com/item?id=22210781](https://news.ycombinator.com/item?id=22210781)

~~~
dang
People often post follow-up submissions like this. It's not the greatest
thing, because it splits discussions and adds repetition to the story feed.
It's better to link to a related article from the original discussion.

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morcheeba
This article gives bad advice. It should say "Don't overspend on a car", or,
more generally "live within your means"

The example of the basketball player who makes $100MM driving a 20 year old
car doesn't help. A new car would not alter his financial situation in the
least, and he sure didn't get rich by driving an old car.

I know people that can't afford to maintain and park a car. They got a job
that offers a bus pass for $10/mo - much more affordable than driving their
crappy car.

~~~
ogre_codes
It doesn't give _bad_ advice, it gives advice based on assumptions about who
the reader is. Considering the article is in MarketWatch, I suspect their
normal readers are not having trouble making bus fare.

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.

~~~
seshagiric
Driving a crappy car saves money. Saving money stops you from going broke. So
it is indeed good advice, but saving alone may not make you rich.

~~~
ogre_codes
If you have 2 people who have otherwise identical life choices save car
purchase habits. If one drives an older but reliable car and the other buys a
new car every 4 years, the one in the older car will be much wealthier. Saving
$500-1000/ month in car payments over 10-20 years can make a massive positive
effect on your net wealth over time. Whether that means they end up "rich"
depends largely on their base lively-hood.

For some it might _just_ mean the difference between a modest retirement and
not being able to retire at all. If you make a _good_ living, it could easily
be the difference between being rich and living paycheck to paycheck. I know a
lot of people with great jobs who couldn't be unemployed for 3 months. Just
making money doesn't make you wealthy, at some point you have to accumulate
wealth and eliminate debt or you can easily end up under-water.

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arbuge
> The second part of that statement is crucial. There is nothing better than a
> paid-off car. There is no monthly payment, and most of the depreciation has
> already occurred. You are driving for free.

There is no such animal. As the car ages, repairs and maintenance costs
inevitably mount. Then of course you have constant costs like insurance,
gas/electricity, etc.

~~~
TrueGeek
When my son turned 15 we told him he could get any car that he could afford to
pay half of, was recommended by Consumer Reports, and was a stick shift (so he
can’t text and drive). After working for a summer he got a Toyota Corolla for
$3k with 200k miles. It’s been two years and the car has needed nothing but
oil changes and, soon, tires. It gets incredible gas mileage and it was so
cheap most people only need liability gas mileage.

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.

~~~
bg4
> a stick shift (so he can’t text and drive)

This is genius, thank you. I have been very nervous of my kids texting while
driving.

~~~
hyko
You absolutely can text while driving a stick shift; please don’t rely on this
to prevent the behaviour.

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compiler-guy
Keeping your expenses low is absolutely a wise financial decision and will
leave in you in a better place, all else being equal. But a person making say
$10,000 with $9,000 of expenses is not better off than a person making $20,000
with $15,000 of expenses. You can't take your money with you, so balancing
between long-term and short-term decision making is crucial.

Short-term thinking is common, but blanket statements like this are way too
simplistic.

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.

That doesn't mean you should blow all your money on a car, it just means you
should live within your means, and that you should be sure you are getting
good value out of your car for how you spend.

~~~
ogre_codes
> But a person making say $10,000 with $9,000 of expenses is not better off
> than a person making $20,000 with $15,000 of expenses.

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.

~~~
perl4ever
I like all kinds of cars, but come _on_ , you buy one $40K Camry in your life,
you're not going to need another one. Regardless of how long you keep it.

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reaperducer
I only know one person making a seven-figure salary. And of all the people I
know, he drives the crappiest car.

He's not an executive or a director or a C-level, just an upper-level cog in
the machine. But his skills and reputation are such that he can command that
kind of money. More importantly, he has been with the company he works for
over 25 years, and in his contract he gets a certain percent raise, plus merit
pay. That percent over 25 years adds up. And the company is happy to pay it
because it would rather not compensate him with extra time off like it does
other employees.

He drives an old pickup truck. He lives in a perfectly adequate home in a
perfectly ordinary neighborhood and is a super nice guy. Maybe he tells
stories that are too long, but I've never known anyone to dislike him.

I don't know what he does with his money, other than he bought his parents a
house a few years back. He's single with no children so I wonder what will
happen to all of his money when he dies. Probably go to a charity or
something.

He is easily the happiest man I've ever met.

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himlion
Or no car at all. I live close to the center of a city in the Netherlands with
a family. For the rare case I need a car I can grab any of the umpteen pay by
the hour rental options, they are available within a 30 meter walk from my
front door. I like the freedom of not owning a car.

(I realize this is not really an option for a lot of Americans.)

~~~
jppope
This is totally an option for most Americans... they don't give themselves the
option. Walking/ Biking is the best.

~~~
marcinzm
>This is totally an option for most Americans

You mean if they walk half an to the bus which comes once an hour and take
another hour to get to their destination where they have to walk another half
an hour? Public transit in most of the US is really really bad.

~~~
ogre_codes
The person you replied to say Walk/ Bike, not bus. I'm in a small office in a
medium sized city in Oregon and a quarter of the people at my work walk or
ride in to work regularly.

If you live less than 3 miles from where you work, biking is cheap and as fast
as a car in a lot of cases. Even if you are 5 miles from work, it's less than
a half an hour commute (and you are almost completely immune to congestion).
eBikes make it even faster.

Bus/ public transit are highly variable depending on where you live. For me it
saves a trivial amount of time versus riding my bike so I don't bother, but
our bus system is pretty good and if I couldn't pedal 7 miles, it's only 20
minutes on the bus versus 12 driving and I wouldn't have to deal with parking.

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tra3
Get a budgeting system in place where you don't overspend (I like ynab [0]).
Make sure you save for retirement. Thereafter spend anyway you want. If you
wanna buy an expensive car do that. If you'd rather buy a $10 juice every day
for the rest of your life do that. You can't do both though..

[0]: [http://youneedabudget.com](http://youneedabudget.com)

~~~
compiler-guy
Making financially responsible decisions about your housing and transportation
makes up for thousands of mistakes in your daily drinking choices.

~~~
tra3
I guess what I'm trying to say is that if you have a system in place you are
less likely to make a single mistake that will ruin you financially. But your
point is well taken.

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davewritescode
The road to riches is simple: Make more money. Yes, lowering your expenses is
a good thing but blanket statements like this are clickbait at best.

I live in a pretty modest house in an area with relatively low taxes. My two
“excessive” spends are my car and stuff for my kids. Thankfully I make enough
to cover up most financial mistakes.

Nobody is getting rich driving a beater car over a new-ish Toyota

~~~
ogre_codes
> Nobody is getting rich driving a beater car over a new-ish Toyota.

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.

~~~
perl4ever
Trying to make decisions for the next 30 years is pointless. If you signed a
contract that said you'd get a cool million _if and only if_ you had a latte
every day and traded your car every 3 years, I guarantee you wouldn't make it.

In fact, I think that's the best life advice that I don't notice people giving
- try not to make decisions for multiple decades at a time because you _will_
change over time. The way you know you're young is you haven't realized yet
that in "a few" decades you will be _old_.

------
decasia
Just to put a little bit of economic perspective on this, a "gently used
toyota" is easily 15k. A lot of people absolutely cannot afford to pay 15k in
cash for a car.

~~~
crispyporkbites
If you can’t afford it in cash you can’t afford it in credit.

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).

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scottious
> Where else can you take $40,000 and set it on fire in seven years? And pay a
> bunch of interest to the bank in the process? What a disaster.

Where is this $40k number actually coming from? I read the linked articles but
there didn't seem to be any detailed analysis that I saw...

> The takeaway here is that your financial well-being is not the product of a
> million small decisions, but two or three big decisions.

Uhh maybe it's both? I've done a detailed analysis of our finances for many
years. I find that those little things really do add up. Changing my lifestyle
such that I have cheap hobbies, don't eat out, don't drink alcohol (esp. at
restaurants), and make coffee at home has actually saved me a lot of money. On
the order of many thousands per year compared to my prior bad habits.

Lifestyle creep really does happen if you aren't focused on stopping it. Yes,
I can "afford" to eat out 7 days per week and go to Starbucks every single day
and lease high-end cars. My bank account will actually probably still be
growing even if I did this. However, it won't grow nearly as much as if I just
cool my jets and live a modest lifestyle

~~~
asdfasgasdgasdg
> Where is this $40k number actually coming from?

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...](https://www.cnbc.com/2019/10/22/car-prices-are-rapidly-increasing-
heres-why-thats-bad-for-americans.html)

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

------
miguelmota
I once bought a crappy car and ended up spending way more on repairs than
expected that it would of made more sense to have bought a relatively new car
instead. Crappy cars break down and you have to pay tow trucks, miss work, and
spend more on repairs. I'd argue that it's worth spending more for a car that
will be reliable.

~~~
ghaff
I’ve mostly bought new but also belonged to the drive it into the ground
(while maintaining it well) school. But I’ve definitely gone an expensive
repair or two too many once or twice.

~~~
clarry
What kind of repairs were these? How much were they?

~~~
ghaff
The worst case was power steering line leaked and had that fixed. Then brake
lines went out and had that fixed. It was basically all rust related. Should
have just ditched the vehicle at the first rust-related problem. We’re talking
at least a couple $K total.

As I recall I had a prior vehicle that I also spent too much on near the end
of its life.

Recently donated an old car that started to have some sort of ABS brake
weirdness. I had pretty much made the decision to not put any more money into
it—and I didn’t drive it a lot anyway.

------
speedgoose
You don't get rich by saving at maximum a few hundred euros/dollars per month.

~~~
retrac
Well, you won't get rich. But it's also not chump change and can radically
alter a person's quality of life.

$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.

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rusk
I drive a 25 year old VW Golf Cabriolet, and as much as I love it it really is
a labour of love. The extra costs in terms of insurance, tax and making sure
she passes the annual car test probably cancel out any savings but I hope that
in the sense of developing technical skills and forbearance maybe it will make
me wealthy in the future? If not monetarily then perhaps spiritually? It’s
really not for everyone though. I don’t drive for work and mainly use public
transport so it is in a sense an indulgence. If I was dependent on having a
reliable car I’m not sure it would be so wise, but she is sweet and I always
get complements on it, so I’ll be driving it for a while to come ...

------
ajflores1604
This advice really should be tempered with considerations of how safety
features have improved over the years. Something I always see lacking in this
conversation.

------
stanski
Those kinds of articles are always written by people who don't care much about
cars in general. Sure, buy within your means, and sure, some people only buy
expensive cars as a status symbol. There are however some somewhat pricey cars
that are a blast to drive (mostly legally) and totally worth the money if that
brings you joy.

Meanwhile if you're fine with putting around in your Toyota, then just do so.
And write articles about how it's the same thing as driving a Porsche but
cheaper. Puke.

~~~
RickJWagner
I'm somewhere in the middle. I'm a car fanatic, but also somewhat 'frugal'.

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.

------
fullshark
I don't see a problem with splurging on the moving box that many people spend
hours every week/day stuck inside.

~~~
scottious
The problem is the opportunity cost. That money you used to splurge on a car
is NOT being invested. Having a nice car now could literally cost you hundreds
of thousands of dollars of compounded retirement money in missed stock/bond
gains.

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.

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languagehacker
Warranties have value. Included maintenance has value. Modern safety features
have a crapload of value.

------
thedance
There are tens of millions of American families with dilapidated cars and
without riches. This is a stupid article. The road to a rich society is to
build cities where nobody, rich or poor, ever needs a car of any quality.

------
donatj
I've actually mentioned it on here before but I have had several cars cost me
less than $1000 and last me for several years. I really don't understand the
desire to own a new car.

~~~
rebuilder
Can't get zero or low-emission cars very cheap, unfortunately.

~~~
crispyporkbites
A £1000 car will have net lower emissions than a new zero emissions car.
Buying a new car is definitely worse for the environment

~~~
rebuilder
What calculation goes into that?

~~~
crispyporkbites
for every new car you buy a car has to go to scrap. It's unlikely that the
emissions in creating the new car are less than the difference in emissions
from running the old car vs the new car. So if you really want to save the
environment stick with your old car until it falls apart and buy cars that
would otherwise go to scrap.

[https://www.theguardian.com/environment/green-living-
blog/20...](https://www.theguardian.com/environment/green-living-
blog/2010/sep/23/carbon-footprint-new-car)

~~~
rebuilder
I meant what numbers are you using.

Googling around, I got 9-17 tons of CO2 to produce a new car. Let's assume 17.
For a mid sized gas-powered car, I found an estimate of 0.133 kg CO2/km
driven, and for an EV, 0.043 kg.

Let's not count the CO2 the beater car's production put out, that's old news.
Let's assume a new car gets driven 200 000 km before it is scrapped. For 200
000 km driven, we get these CO2 footprints:

Beater: 26.6 tons CO2 EV: 25.6 tons CO2.

So for those values, it's really pretty similar! The devil is in the details
though - 17 tons of CO2 is a pretty rough estimate for production, one would
hope to get more than 200 000 km out of a new car, and the means of
electricity production has an effect on the EV's footprint per KM.

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purplezooey
Once most of them get above 120k miles or so they start needing very costly
repairs and suffer in reliability. Sure there are exceptions, and some people
are OK with that.

------
dba7dba
How about

 _The road to "staying just barely afloat financially" is this simple: Drive a
crappy car_

Vast majority of people who drive crappy cars are doing so because they have
no other option...

