Who would you admire more?

8 Apr

Recently, I borrowed “Millionaire Teacher” by Andrew Hallam from the library.  I literally read the first few pages.  I have a very short expansion span, but I will try to finish this book by the due date!

Andrew Hallam made a very good point on perception about owning a car which is a depreciating asset.  In his findings, most people who buy luxury cars are not actually millionaires.  Most millionaires buy a Toyata!

Who would you admire more?

Hypothetical Scenario:

Mr. Hotshot and Mr. Frugal both makes the same amount each year.  Both of them needs to buy a car to travel to work.

1.  Mr. Hotshot buys a brand new Lexus IS 350 for $45,000.

2.  Mr. Frugal buys a brand new Toyota Matrix for $20,000.

Both of them show up to work with their new cars.  Their coworkers goes out to the parking lot to check the two cars out.  Everyone is admiring the Lexus IS 350 over the Matrix and Mr. Hotshot gets excited from all the attention and questions from his coworkers.  Mr. Frugal steps back and smiles to himself.

But who do you think will have more money down the road?

Of course, Mr. Frugal.  Right off the bat, he saved $25,000 of his own money by not buying a more expensive car.  He has bigger plans for his money down the road that will eventually multiply over time.

Personally, I do admire nice cars myself.  Who doesn’t?  Does that mean I can afford one?  Right now, I can if I wanted to squander all my savings!  But I choose not to go out on a limb to lease or finance an expensive luxurious car.  I will spend my money wisely elsewhere.

Some of my BF’s friends have brand new BMWs and Mercedes.  Do I admire them…?

Dash Cam Crashes (Accidents can happen in an instant, so why bother with a nice car!)

4 Responses to “Who would you admire more?”

  1. Alex Yang (@yyangalex) April 8, 2013 at 2.33 #

    why not get best of both worlds, buy a used Lexus IS 350 for 25k instead 😛
    i think a lot of people who drive new cars are actually leasing, which is even worse than Mr Hotshot buying a new car for 45k

    • agentfang April 8, 2013 at 2.33 #

      That’s actually not a bad idea!! Best to buy a used car in my books! Therefore the first owner has taken most of the burden off your hands. Personally, I would never buy a luxury car unless I am filthy rich. Warren Buffet bought his first most expensive car: Cadillac for $55,000.

      • Alex Yang (@yyangalex) April 8, 2013 at 2.33 #

        Cadillac is decently reliable too. i never quite understand the folks buying Audis for 50k. poor reliability, expensive, and depreciates so fast! my used car was around 29k all in incl 1st year insurance, and it already made me feel poor enough! i refuse to spend 40k on a car lol

      • agentfang April 10, 2013 at 2.33 #

        It’s all about aesthetics. We are generally drawn to pretty things as humans… but those pretty things aren’t usually the best….

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