A Paid-Off Car with High Miles, Not a Brand-New Car with Payments, is a New, Unspoken American Status Symbol

I noticed that back a few years ago, when I lived on the edge of Nashville, where income levels were lower than where I live now in my commuter town, that it was the norm to see so many fellow commuters driving luxury cars, on every side of me… which were obviously leased. Compare that to where I live now- people make more money, but drive older cars; not many Mercedes’ to be seen.

Owning a brand-new car is not worth celebrating, unless the person paid cash for it. Otherwise, the person is paying more money for something they couldn’t afford in the first place.

Imagine the irony: A person doesn’t have enough money to buy the product, so they agree to pay even more of the money they don’t have in the first place- in interest.

The Eighties and Nineties are long gone. No longer can we pretend we are doing financially well because of the false status symbols bought with credit. That mentality ended with the Financial Crisis of 2008; which happened to be the year I got married.

I believe our culture is now realizing that the new status symbol is being able to afford more, but choosing to save and invest that money instead.

If anything, the new status symbol is to be able to brag on how little money you paid for a product, not to allow others to believe you spent more. The new status symbol is being able to figure ways to save money and make money on the side, then share that info with everyone else. That has value.

We are living in the aftermath of the Financial Crisis of 2008. My generation is becoming the new version of those who lived through the Great Depression.

Being frugal and in full control of your finances is the ideal; not necessarily making a lot of money, only to continue to struggle to pay the bills and live in debt. Now it’s all about low overhead and living well within your means.

This month makes exactly 13 lucky years that I’ve owned my 2004 Honda Element, with 170,000 miles and a salvaged title; making it worth only about $500. Two years ago, it came within about $25 shy of being totaled, when an albino dear ran into my driver’s side door and wheel. (True story!)

But the way I see it, that car is worth a whole lot more than what I could sell it for.

It’s funny how typically, when a person “buys” a new car, the typical reaction is to be happy for them: “Oh wow! I like your new car! I wish I had something nice and shiny like that!”

When I overhear a conversation like that, I always privately think, “But yeah, now they have to be making monthly payments for the next few years, coupled with the insurance payments that accompany a new car…”

And it’s even worse if the car is leased, because there’s no chance of making any profit when the lease is done; in fact, you may end up having to pay more money if you drove too many miles or caused damage to the car.

So yeah, I am proud to drive my 2004 Honda Element. It’s a bit rusty and my kids complain about having to ride in it because, “It’s so old!”

But hey, it runs and it’s been paid off well over a decade.

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At Age 37, My Wife and I Have Begun Investing Our Money, Thanks to Charles Schwab

At age 37, I am fully aware that I am now at the halfway point of the average American lifespan. I suppose this is literally the most appropriate time to have my midlife crisis.

Finally, I can trade in my old paid-off Honda Element for a brand-new Jeep Wrangler, take a spur of the moment trip to Spain, and start training for American Ninja Warrior…

But instead, I am focusing all that energy into planning for the 2nd half of my life- and my wife’s, as well as our children’s future.

My wife and I got married 10 and a half years ago, right in the middle of the 2008 Financial Crisis.

The first half of our marriage was spent building our careers from entry level positions and trying to manage the tens of thousands of dollars of debt we were in; largely due to college loans and our wedding.

The most recent half of our marriage began with us finally becoming debt-free in 2013, buying the last steal-of-a-deal new home in the Nashville area, and both finding ourselves far enough into our careers and side hustles that we started making a comfortable living.

But as Maslow’s Hierarchy of Needs pyramid explains, your goals and motivations evolve as you overcome your previous more basic needs and desires.

Now the focus is… how to invest our steady stream of income into our future.

I thought it was as simple as just paying off our house, then worrying about retirement afterwards.

However, my wife has been listening to the Moneywise program on Moody Radio on the way home from work each day. She explained to me that based on our interest rate on our home, it would actually be a better investment of our money to start building our retirement now, alongside paying off our mortgage early.

My wife then set us up an appointment with Charles Schwab financial investment company, which she had been hearing endorsed on Moneywise.

Today was the big day.

Our financial advisor helped us rollover my 401K from my previous employer to traditional IRA and select a portfolio for it. She also gave us direction on determining our financial goals so we could better plan our retirement and our kids’ college funds.

This was a major milestone for us. Here’s to the second half of life!

Is Age 37 Too Young for a Midlife Crisis? 1st World Problems and Maslow’s Hierarchy of Needs

I’m pretty sure that at age 37, I’m currently working my way through my midlife crisis. While at first mention, it might seem I’m getting mine out of the way a little early, consider that the average American man in Tennessee lives to be about 74 years old. So actually, I’m actually right on cue:

If I live that long, then my life is already halfway complete at this point.

Perhaps the biggest struggle I am sorting out is that, as of this year, I have officially found myself at the top of Maslow’s Hierarchy of Needs: Self-Actualization.

The way I like to explain how Maslow’s Hierarchy of Needs works is this:

If and when you are able to overcome needs in each stage of your life, they are simply replaced by new ones that you didn’t have the privilege of addressing before.

Things started progressing quickly on my journey up the pyramid, in my mid-30s, when I discovered that it was always my decision whether I allowed other people to emotionally affect me. During that same time in my life, my wife and I had become completely debt-free, other than our mortgage.

Now in our late 30s, we have found ourselves in a new income level bracket; having both progressed our ways up the corporate ladder, in addition to the aforementioned pyramid.

I think the identity crisis I am going through right now is that we both work full-time jobs in offices, in addition to side jobs online. The money simply goes to paying off our mortgage, our kids’ college funds, and our retirement.

It’s just sort of demotivating to consider how much of our time is spent working- and how little time is spent together as a family.

Plus, I really want a Jeep Wrangler. I’ve been dreaming about owning one for years. But having gone years without a car payment, and knowing that buying my dream car would only take away from our savings and our ability to pay extra each month on our mortgage, I just wouldn’t be able to enjoy it anyway.

Clearly, I have first world problems. Yet according to Maslow’s Hierarchy of Needs, they are still legitimate challenges that I am sorting out in my life.

This is my midlife crisis at age 37.

What I’ve Learned from My Dog About My Finances Ahead of Having My First Child (By Guest Blogger, Jacob Evans of Dollar Diligence)

I do not have a child, which you probably inferred from the title of this article.

Do I want one? Yes.

Am I ready for one? I think so.

Whether I really am or not, I can tell you this, my dog has helped me prepare mentally
and financially for my first child when me and my wife are ready for one.

Mentally by helping me learn patience and what it’s like to have a 24/7 responsibility. I
had to stay patient when my dog was a puppy and wasn’t potty-trained (it was very
hard) and I always had to consider how my dog would be fed and walked every day.

Financially by teaching me to consider the future and start preparing for it. For
example, I knew my dog had a predisposition for hip problems and certain diseases. I
knew if I had to pay for these alone that I would have to pay for a big bill so I went
ahead and bought pet insurance.

I have actually already started planning for my first child by starting to save for his or her
education. I know first-hand how bad student loan debt can be, and if graduates today
have over $27,000, then I can’t even imagine how high it will be when my child
graduates. I hope to help my child avoid student loans altogether if possible.

Below, I will talk to you about how my pup has helped me plan for the finances that lie
ahead of having a child because you know, you can never be TOO prepared ahead of
time.

Devoting Attention to the Dog

One of the many things that I learned and that will help me once I do have a child is that
I must devote time to my dog. If I do not, my dog will not thrive and he will eventually
start to destroy my home in an effort to get my attention. It is important that I make sure
I take time to walk my dog and even play with him out in the backyard because if I do
not, he will be hyper and rambunctious the entire night.

While a young child may not be as rambunctious as a dog without play or a child may
not chew up your furniture, you do need to devote time to your child and work on
training them. Your child will only thrive if he or she has one on one time with his or her
parent. You will need to learn to set time aside and so will I. I cannot be consumed in
my work or in myself all day and neglect to provide my baby with the attention that he or
she needs.

Having a dog has opened my eyes to how much I do focus on myself and how much
change will need to occur when I do decide to have a child with my wife. Of course, I will
move mountains to make time for my child, but having a dog has helped me realize just
how short the days can be.

Providing for the Dog in More Ways Than One

When it comes to a dog, you cannot just purchase or adopt one and then be done with
it. They do not take care of themselves and a child will not be ready to take care of
himself or herself for a while either.

Owning a dog comes with a lot of responsibility. For example, you will need to provide
food and water for the dog. I cannot just avoid feeding and hydrating my pup because I
am pressed for time. I NEED to make sure that he has enough food and water to
sustain him while I am away from the house. In addition, when he runs out of food, I
need to be able to go out and purchase him more.

Another thing to think about is insurance. Though it’s hard to tell if it’s worth it or not, I
have purchased insurance for my pet because I do not even want to think about what
could happen if my pup was hit by a car and we could not afford the care needed. I
have made sure to purchase a policy that protects my dog in events like that, so that he
can visit the vet when needed and I do not have to worry about emptying everyone’s
piggy bank to make it happen.

Lastly, entertainment is another expense on the list. While I will need to provide much
more entertainment to a child over the course of their life, a dog is not much different. In
fact, whenever I want to take my dog out to the dog park to play fetch, we have to drive
10 minutes one way, which also means I need to use gas to do so. These entertainment
trips may seem small and inexpensive, but over time they start to add up.

A Pet Prepares You for a Child

If you have not realized it by now, a pet can truly prepare you for a child. Just like a dog
needs food, water, insurance, shelter, and entertainment, so does a child. As you take
care of your pet, try to think of ways these actions would apply similarly in a situation
with a child. I know my dog has allowed me to open my mind and see how much work,
time, and devotion it takes to raise a child.

Jacob runs a personal finance blog called Dollar Diligence where he tracks his journey
to financial freedom. For more advice and articles, you can find him on Twitter.

Dear Jack: Why We Didn’t Buy a 2011 Suzuki SX4 This Past Weekend (& Trade in My 2004 Honda Element)

4 years, 10 months.

Dear Jack,

Last Wednesday, as I was driving Mommy’s car back from a work trip in Kentucky, Mommy called me to explain that while she was driving you home from pre-K in my 2004 Honda Element, the passenger side window just rolled down by itself.

Dear Jack: Why We Didn't Buy a 2011 Suzuki SX4 This Past Weekend

And it wouldn’t roll back up.

Knowing that this upcoming January makes 10 years I’ve owned this car, Mommy and I decided we should heavily consider trading in my car for a “new” used car.

So she starting emailing dealerships. Meanwhile, I went to one dealership in person last Thursday on my lunch break.

Because we are Dave Ramsey followers, we are refusing to “finance” a car; despite those natural temptations that we are exposed to. We will only pay cash for a car. If we don’t have enough cash to afford the car we want, we simply can’t afford it. So we walk away.

We found a 2011 Suzuki SX4 with less than 50,000 miles, in our “cash only” price range.

So I spent my Thursday lunch break to check out the car. It was everything I needed. However, I did some research that night and discovered Suzuki stopped production in America back in 2012, and they have no parent company.

In other words, it’s a great deal on a dependable car that ultimately I would have great difficulty trying to maintain, as there are no shops that readily have proper tools or parts available to fix it.

After that, Mommy and I realized it’s best we hold out until January, when we have that many more thousands of dollars (from ongoing monthly savings) to pay in cash.

Dear Jack: Why We Didn't Buy a 2011 Suzuki SX4 This Past Weekend

Here’s the twist on this story: Over the weekend when we picked up my Element after they fixed the window, the guy that evaluates the worth of used Hondas there for trade-ins left me a message.

My 2004 Honda Element is worth $5,850, which is about $3,000 more than I had anticipated; nearly double!

That’s because, according to the elevator, “People aren’t trading in Elements- they’re keeping them. That’s why your Element is worth more than whatever it says online. You’re the first person to ever come back and tell me you’re actually interested in trading yours in.”

So in the end, it was totally worth it in the end to pay a few hundred dollars to fix my window.

Dear Jack: Why We Didn't Buy a 2011 Suzuki SX4 This Past Weekend

It’s like instantly making $3,000! We’re still planning on holding out until January, when we can have that much more money to buy a “barely used” vehicle for our family, when we trade in my Element.

Something else this experience taught Mommy and me is just how boring and unattractive we are to used car salesmen the moment we begin the conversation with, “I’m a Dave Ramsey follower; I will only pay with cash.”

You can literally see the hope in their eyes disappear once you say that. Because most people are willing to “finance” the car. That means there’s virtually no real limit on price, since the focus becomes on the monthly payment, not what person can actually afford.

That’s something I equate with a magician distracting his audience by waving a pink handkerchief with one hand while he hides the “disappearing” object in the other.

I will make sure you always understand the true meaning of the phrase “affording a car.”

It’s this simple: If you can’t buy it on the spot in cash, you can’t truly afford it. That’s why dealerships are so eager to have you finance the “purchase.”

Similarly, an individual or a family is only as financially wealthy as their savings account in addition to having no debt other than their house; that’s because a home is considered an asset growing in value, not a depreciating liability like a vehicle.

So our family will wait. By January 2016, our savings should be that much higher if everything remains on course; meaning we can pay cash for the vehicle that we really want. And as I mentioned, coincidentally, this coming January will be exactly one decade since I purchased my 2004 Honda Element.

Ultimately, I’m not sure if I’m technically going to be downsizing or upsizing…

My Honda Element is a decent sized SUV, but it only has 4 seats. That’s never been a problem, but I think it would be a good idea to have 5 seats for the next car, even if the next vehicle is smaller over all.

Until then, I’ll keep driving my green toaster and saving green cash.

Love,

Daddy

Dear Jack: Why We Didn't Buy a 2011 Suzuki SX4 This Past Weekend

5 Reasons Our Townhouse Sold In Just 3 Days

5 Reasons Our Townhouse Sold In Just 3 Days

Last week I revealed that my wife and I sold our townhouse after it was on the market for just 3 days; for more than our asking price. See Dear Jack: We Sold Our Townhouse… It’s Official! Thank The Lord!

And yes, we made a profit. Today, I would like to highlight what enabled that to happen.

I have to start off with what is, for me, the most obvious part of it: God orchestrated all the events I’m about to talk about.

5 Reasons Our Townhouse Sold In Just 3 Days

#1: We prayed for the right people to find our house. More important than focusing our prayers on our house selling for our personal benefit in our time, we focused on the future buyers being blessed by finding it. That way, they would know our home was the right one once they found it. Here’s an email excerpt from the buyer of our townhouse:

“As for selling points these are the things that really sold us: Open concept, large bedrooms, more bang for your buck with a townhouse versus detached home, safe neighborhood close to entertainment and work, reasonable HOA fees. The extra half bath was also huge; huge garden tub and double vanity in the bathroom.

We looked at 2 others. One was unimpressive and we actually put in an offer on another one that was an end unit. It was a blessing in disguise that we missed out on it because this home really is so much more perfect for us.”

5 Reasons Our Townhouse Sold In Just 3 Days

#2: We had an excellent real estate agent. I have known Dave Stanley with Reliant Reality for most of the time I have lived here in Nashville, since 2005. He is assertive and calculated. He went through the process of figuring out exactly the perfect price point for our model in our neighborhood. We actually received more than our asking price for our townhouse which set a new record for that model in our neighborhood.

5 Reasons Our Townhouse Sold In Just 3 Days

#3: We had kept our house immaculately clean. I mean this as a compliment to my wife: She is obsessed with cleaning to the same degree as Monica from Friends. We don’t smoke, we don’t have pets, and we clean everything weekly. Here is another excerpt from the buyer:

“The fact that [your home] came from what looked like a good family who kept it very clean and up to date was huge. At least 50% of our decision if not more.”

5 Reasons Our Townhouse Sold In Just 3 Days

#4: We staged our home well. It went on the market in October, so we made sure we set out a pumpkin, as well as seasonal flowers, in our staged home. As for the bigger stuff, my dad and I put in a backsplash in the kitchen (seen in the picture above, where I had my smoothie station set up). Not to mention, we painted some of the rooms to bring them to life, but not that same dark red color that most people in the neighborhood used: Another email excerpt from the buyer:

“YES! I totally forgot to mention the backsplash. This was the only house we saw that had a backsplash. That really set the house apart from the rest. I can’t believe I forgot that! It’s one of my favorite features!… We [also] really liked the paint y’all had which made the transition easy.”

5 Reasons Our Townhouse Sold In Just 3 Days

#5: We were debt-free when we put the house on the market. Like most “normal” young couples, we were tens of thousands of dollars in debt for the first several years of our marriage. Thanks to following Dave Ramsey, on our 5th wedding anniversary we official paid off our final debt (as seen when I originally posted about it on my corporately sponsored blog, The Dadabase on Parents.com). That enabled us to be better prepared financially for when we found our new home. Had we not been debt-free, the time would not have been right for us to be able to afford a bigger home when we did; taking advantage of a good deal when we saw it. Additionally, we were able to put our townhouse on the market when the market was ready; not simply just when we were ready.

Hopefully our experience in selling our home in just 3 days for more than the asking price can help you. Individual results may vary.

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Understanding The Psychology Behind Gambling: New Infograph Included

Last week I published, Lottery Commercials Don’t Target People Who Are Good Money Managersin which I explained how I ultimately am not a target for those who advertise lottery tickets.

While I’m not personally opposed to a lottery, I feel I’m good enough at math and good enough at responsibly managing my money than to buy a lottery ticket on a regular basis.

I know that my chances of maintaining an overall better cash flow, for a permanent basis, depend on me having paid off my debts, saving and investing my money afterwards, and not playing the game of trying to impress people with faux status symbols, like leased vehicles; as I explained in A True “Status Symbol” Is A Paid Off One, Including Our New House (Which Is Not).

So I couldn’t help but notice that this infographic below, Psychology of Gambling, seems to back up why I avoid that particular mindset in my everyday life.

The infographic points out the illusion of control, the sense of reward, the excitement of chance, and our natural sense on optimism when gambling…

Or in my opinion, choosing to play the “American lifestyle game” in which we try to impress people we don’t care about with that things we bought with money we don’t have. (I sort of style that line from Dave Ramsey!)

Enjoy.

Infographic, courtesy of VegasSlotsOnline.com.

Psychology-of-gambling-870